Tesla CEO Elon Musk said Thursday the company will likely need to build its own massive chip fabrication plant to support its rapidly expanding artificial intelligence ambitions — and hinted Intel could be a potential partner.
Speaking at Tesla’s annual shareholder meeting, Musk said the company is designing its fifth-generation AI chip — known as AI5 — to power future autonomous driving and robotics capabilities. But even with current manufacturing partners Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung, he warned supply constraints could limit Tesla’s progress.
“Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” Musk told investors. “So I think we may have to do a Tesla terafab. It’s like giga, but way bigger.”
Musk said the facility could support at least 100,000 wafer starts per month — a scale more commonly seen among the largest semiconductor producers. He did not provide timelines, locations, or funding plans.
During the meeting, Musk also publicly floated working with Intel, saying Tesla had not signed any agreement but that discussions would be “worth having.” Intel — which has trailed Nvidia in the AI chip race and needs new foundry customers — saw shares rise 3% in premarket trading following the remark.
The AI5 chip is expected to enter limited production in 2026, with high-volume output in 2027. Musk also reiterated that an AI6 successor is planned, boasting roughly twice the performance while using the same fabrication infrastructure, with volume production targeted for mid-2028.
Musk claimed Tesla’s chips would ultimately be more power-efficient and cost-effective than Nvidia’s flagship Blackwell AI processors — estimating about one-third the energy consumption and 10% of the manufacturing cost.
“I’m super hardcore on chips right now as you may be able to tell,” he said. “I have chips on the brain.”
The remarks came as shareholders approved a compensation package worth up to $1 trillion over the next decade — a strong endorsement of Musk’s push to transform Tesla from an electric-vehicle pioneer into an AI and robotics powerhouse.
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