Yes, it will be processed live in the car. From the article:
> To make sense of all of this data, a new onboard computer
with more than 40 times the computing power of the previous generation runs the new Tesla-developed neural net
for vision, sonar and radar processing software.
In the beginning, it's very likely some data will be uploaded in bulk, for Tesla to analyze, particularly while they are running the passive tests to correct their models.