Tesla shares rose over 7% on Monday morning after CEO Elon Musk announced on X that the company is close to launching its next-generation AI chip.
As of press time, the shares are trading above $419, after having closed 1% lower on Friday.
Tesla‘s stock is up 3% year to date, however it has dropped nearly 8% in the past thirty days.
On November 3, the company’s shares hit a new year-to-date high of $474.07 — just $14 shy of their all-time high of $488.54 reached in December 2024.
Since then, the stock has lost 17.5% of its value.
According to Musk, the company’s goal “is to bring a new AI chip design to volume production every 12 months,” while expecting “to build chips at higher volumes ultimately than all other AI chips combined.”
“Read that sentence again, as I’m not kidding,” Musk added without mentioning any rival.
Besides its application in vehicles, the CEO highlighted its use in the Optimus humanoid, which is expected to account for a big part of the company’s valuation in the upcoming years, analysts say.
“These chips will profoundly change the world in positive ways, saving millions of lives due to safer driving and providing advanced medical care to all people via Optimus,” Musk wrote.
AI4 + AI5 Chip
On Sunday, Elon Musk praised Tesla‘s AI engineering team’s efforts in a post focused on hiring for chip design.
According to him, “most people don’t know that Tesla has had an advanced AI chip and board engineering team for many years,” which has “already designed and deployed several million AI chips in our cars and data centers.”
While “the current version in cars is AI4, we are close to taping out AI5,” Musk said, noting that they are “starting work on AI6.”
Commenting on the original post by Musk, Tesla‘s VP of AI Software Ashok Elluswamy wrote that the chips are heavily co-designed with the team he supervises.
“For instance, AI4 can process and understand a million pixels of streaming video within ~1 ms,” the engineer said, noting that “this is only achievable because the software AND the hardware are designed together to achieve this performance point.”
In a follow-up post, Musk said he has been closely involved in Tesla‘s chip development recently: “FWIW [for what it’s worth], I’m deeply involved in the chip design and meet with the engineering team every Tuesday and Saturday.”
The CEO added that the Saturday meetings “will no longer be needed in a few months when AI5 is taped out.”
Upcoming AI6
In July, Samsung Electronics announced a $16.5 billion deal to produce AI semiconductors for Tesla.
By then, Musk wrote on X that the company would be developing Tesla‘s upcoming AI6 chip in a new facility in Texas, where his company is based.
“Samsung’s giant new Texas fab will be dedicated to making Tesla‘s next-generation AI6 chip,” he wrote, adding that “the strategic importance of this is hard to overstate.”
The South Korean tech giant is currently responsible for the AI4 production, while Taiwan Semiconductor Manufacturing Co (TSMC) will make AI5, “initially in Taiwan and then Arizona,” the CEO said.
TSMC is also the primary supplier of Nvidia’s chips.
