Tesla CEO Elon Musk stated on Thursday (November 6) that the company may need to “build a giant chip factory” to produce artificial intelligence (AI) chips. He also revealed that Tesla is interested in collaborating with Intel.
Tesla is designing its fifth-generation AI chip to advance its self-driving goals. Musk outlined this potential manufacturing plan at the company’s annual shareholder meeting.
“You know, maybe we’ll do some things with Intel,” Musk said amidst cheers from Tesla shareholders. “We haven’t signed any agreements yet, but it seems worthwhile to engage in discussions with Intel.”
Intel has its own chip manufacturing plants but has been lagging far behind Nvidia in the race for AI chips.
Recently, the US government acquired a stake in Intel, holding around 10% of the shares, becoming a major shareholder. This is undoubtedly significant support for the struggling US chipmaker. However, Intel still needs to find external customers for its latest process technology.
Following Musk’s remarks, Intel’s stock price rose by 4% in after-hours trading, although Intel has yet to comment on the potential collaboration with Tesla.
On the same day, Musk also secured another major victory – shareholders approved a $1 trillion compensation package over the next 10 years, demonstrating confidence in his efforts to transform Tesla into an AI and robotics giant.
Musk had previously teased the “AI5” chip multiple times and reiterated that Tesla is currently collaborating with TSMC and Samsung Electronics from South Korea. These AI chips will provide computational power for Tesla’s autonomous driving system, including the “Full Self-Driving” software.
Tesla currently uses fourth-generation chips.
Musk announced on Tuesday on the X platform that the AI5 chip will begin small-scale production in 2026 and achieve large-scale production in 2027. He also added that the AI6 chip will be manufactured in the same chip plant but with performance approximately doubled, expected to enter mass production by mid-2028.
“Even with the best capacity estimates from suppliers, it’s still far from enough,” he stated on Thursday.
“So, I think we might have to build a Tesla Terafab chip plant, like a super factory, but bigger. It seems like there is no other way to achieve the chip production we need, so I think we might really have to build a gigantic chip fab ourselves. It’s a must.”
He did not provide details on how the chip plant would be built, only mentioning that the initial production capacity would be at least 100,000 wafers per month, eventually ramping up to 1 million wafers.
Musk emphasized that Tesla’s in-house chips will feature low cost, energy efficiency, and deep optimization for Tesla software, with power consumption only about one-third of Nvidia’s Blackwell chip and manufacturing cost just 10%.
“As you may have noticed, I’m currently extremely fascinated by chips,” Musk joked. “All I can think about is chips.”
(This article is based on relevant reports from Reuters)