Key Takeaways
- Tesla CEO Elon Musk announced potential collaboration with Intel on AI chips
- Shareholders approved Musk’s $1 trillion pay package with 75% support
- Tesla developing fifth-generation AI5 chip for self-driving systems
- Intel shares rose 4% following Musk’s comments
Elon Musk has revealed Tesla is exploring a potential partnership with Intel for manufacturing its next-generation AI chips, while shareholders overwhelmingly approved his massive $1 trillion compensation package.
Speaking at Tesla’s annual shareholder meeting, Musk confirmed discussions about collaborating with the US chipmaker. “Maybe we’ll do something with Intel,” he told cheering shareholders. “We haven’t signed any deal, but it’s probably worth having discussions with Intel.”
Tesla’s Ambitious Chip Manufacturing Plans
The electric vehicle maker is developing its fifth-generation AI chip, known as AI5, to power its autonomous driving systems. Musk indicated Tesla might need to build a “gigantic chip fab” to produce its own artificial intelligence processors.
Limited production of the AI5 chip is expected in 2026, with mass production targeted for 2027. The next-generation AI6 chip could double performance using the same facilities, with high-volume output planned for mid-2028.
Addressing Chip Supply Challenges
Despite currently using chips from Taiwan Semiconductor Manufacturing Co (TSMC) and Samsung Electronics, Tesla continues facing supply constraints. “Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” Musk acknowledged.
He proposed building a “Tesla terafab” that would produce at least 100,000 wafer starts monthly. Tesla’s custom AI chips would use about one-third of the power of Nvidia’s top-tier Blackwell chips while costing roughly 10% as much to manufacture.
Shareholder Support and Market Impact
The announcement came as Tesla shareholders approved Musk’s nearly $1 trillion pay package with 75% support, reinforcing confidence in his vision to transform Tesla into an AI and robotics leader.
Following Musk’s remarks, Intel shares climbed approximately 4% in after-hours trading. The company has been seeking major customers for its latest manufacturing technology while competing with Nvidia in the AI chip market.
The potential partnership aligns with broader US efforts to strengthen domestic semiconductor production, including the government’s acquisition of a 10% stake in Intel earlier this year.
