Tesla’s notorious struggle to ramp up production of the Model 3 sedan in 2018 nearly brought the company to the brink of collapse—a scenario CEO Elon Musk openly acknowledged at the time. That critical moment in Tesla’s history inspired two former supply chain leaders from the automaker, Michael Rossiter and Neal Suidan, to embark on a new venture aimed at preventing similar crises. Their startup—named Atomic—is leveraging artificial intelligence to transform the complexities of managing inventory and supply chains.
Atomic was incubated within DVx Ventures, the investment firm led by former Tesla president Jon McNeill. Rossiter, who is also a partner at DVx, and Suidan have secured backing including a $3 million seed funding round led by DVx alongside participation from Seattle-based Madrona Ventures.
“We experienced these challenges firsthand while at Tesla,” McNeill explained. “The pain of managing supply chains became incredibly clear. I saw the effort Michael and Neal poured into solving it—because they were building these solutions right under my leadership.”
At Atomic, their approach deploys advanced AI-powered systems to simplify inventory planning significantly. The company’s solution is designed to allow rapid scenario simulations, condensing tasks that usually require days of meticulous manual effort into mere hours or even minutes.
In early pilots, Atomic has already demonstrated remarkable results. One customer was able to reduce inventory by half while maintaining a 99% in-stock rate, freeing significant working capital without sacrificing product availability. On average, Atomic claims its clients across sectors such as consumer packaged goods, food and beverage, and apparel have slashed inventory costs between 20% and 50%.
The startup founders propose a compelling business case, especially given current global economic uncertainty, with supply chains feeling intense volatility. Suidan argues traditional inventory planning methods aren’t adequate anymore. “Typically, planning teams lock themselves away, assembling complex spreadsheets over a week, only to be blindsided by a question from executives they hadn’t accounted for,” he explained. “That sends them back to square one. It’s a consuming process—one that’s unsuited to today’s unpredictable landscape.”
The software developed by Atomic aims to break down this inefficiency by ingesting data from existing documents and enabling planners to dynamically model scenarios, providing flexibility and increased control. Suidan and Rossiter emphasize adaptability: rather than bespoke applications for individual clients, they’ve created a generalized yet highly customizable data model which can be swiftly applied across various businesses, empowering planners with unprecedented precision.
Atomic stands apart from the wave of new companies founded by ex-Tesla employees—such as Redwood Materials by former CTO JB Straubel and Heron, recently started by ex-SVP Drew Baglino—in its mission and method. The company is not simply applying knowledge gleaned from Tesla to a different vertical; rather, it aims to fundamentally rethink how all industries approach supply-chain management. Rossiter and Suidan drew inspiration directly from an internal system they developed at Tesla, engineered precisely to overcome the Model 3 bottlenecks.
Suidan described how initially fragmented and chaotic internal processes at Tesla required a painstaking overhaul. Separate teams working with isolated spreadsheets had continually struggled to align supply-chain planning. The system Rossiter and Suidan built overhauled and integrated these scattered planning efforts into an optimized solution, which fundamentally transformed the company’s operations. Rossiter left Tesla soon after the Model 3’s production stabilized, while Suidan stayed until 2022.
In early 2023, both founders came together again with the idea of making their innovative method accessible broadly across industries. They started developing Atomic within the DVx ecosystem shortly thereafter.
Rossiter articulated their vision in clear and ambitious terms: “Ultimately, our goal is to support any and every company selling physical goods.”
