.png){kind=logo}
Tesla CEO Elon Musk on Thursday said that the company might have to build a “gigantic chip fabrication plant” to meet the rapidly growing demand for artificial intelligence (AI) chips, signaling Tesla’s growing focus on AI hardware. At Tesla's annual shareholder meeting, Musk also suggested a potential collaboration with Intel.
During the meeting, Musk revealed that Tesla is designing its fifth-generation AI chip (AI5) to enhance its autonomous driving and robotics capabilities. He said that the company’s suppliers, including TSMC and Samsung, may not be able to produce chips at the scale Tesla needs in the coming years.
“Even in the best-case scenario for chip production from our suppliers, it’s still not enough,” Musk told shareholders.
“So, I think we may have to build a Tesla terafab. It’s like a gigafactory, but way bigger. I can’t see any other way to get to the volume of chips that we’re looking for,” he said.
Musk added that such a facility could produce at least 100,000 wafer starts per month, a metric used to measure semiconductor manufacturing capacity.
Musk’s comment that Tesla might “do something with Intel” drew loud cheers from shareholders, although he clarified that no deal has been finalized.
The potential partnership could provide a much-needed boost to Intel, whose share price rose 4% in after-hours trading following Musk’s remarks.
Intel, which has lagged behind NVIDIA in the AI chip market, recently received a 10% equity investment from the US government to expand its manufacturing capabilities.
A collaboration with Tesla could give Intel a significant external customer for its latest chip fabrication technologies.
Musk explained that Tesla plans to produce limited quantities of its AI5 chip in 2026, with mass production targeted for 2027. The AI6 generation, he added, would leverage the same fabs but deliver double the performance by mid-2028.
The upcoming AI chips will be tailored for Tesla’s Full Self-Driving (FSD) system and robotics programs.
Musk emphasized that the new chips would be three times more power-efficient and cost only 10% as much to produce as NVIDIA’s Blackwell chip.
“I’m super hardcore on chips right now,” Musk said. “I have chips on the brain.”
Also Read: Tesla Strikes $2B Battery Deal With Samsung SDI for Bold Clean Energy Expansion
Musk’s comments come after Tesla shareholders approved his $1 trillion compensation package, underscoring investor confidence in his long-term vision to turn Tesla into a global AI and robotics powerhouse.
With ambitions ranging from self-driving cars and humanoid robots to building one of the world’s largest AI chip fabs, Musk is betting heavily on Tesla’s future.
