Tesla, Inc. has announced the completion of the design review for its next-generation AI chip, AI5, marking a significant step in the company’s artificial intelligence ambitions. The automaker also revealed plans to explore a large-scale chip manufacturing facility and hinted at a possible partnership with Intel Corporation to support production.
Next-Generation AI5 Chip
The AI5 chip is expected to power Tesla’s full self-driving (FSD) software, in-car AI applications, and potentially new generative AI systems. Insiders report that the design incorporates next-generation transistor technology, advanced neural network acceleration, and improved energy efficiency, aiming to outperform Tesla’s current AI chips used in vehicles and data centers.
Mega Fab Plans
Tesla’s consideration of a mega fab reflects a move toward vertical integration in semiconductor manufacturing, reducing reliance on third-party suppliers and giving the company greater control over AI hardware development. Discussions with Intel suggest Tesla may leverage Intel’s fabrication expertise to accelerate large-scale production.
Elon Musk, CEO of Tesla, emphasized the strategic significance of the AI5 chip: “Our goal is to build the most powerful AI silicon for autonomous driving and beyond. Completing the AI5 design review is just the beginning; manufacturing at scale will be a game-changer for Tesla and the AI ecosystem.”
Competing in the AI Hardware Space
Tesla joins a growing list of tech companies investing in custom AI chips. Google recently unveiled its Ironwood TPU, while Nvidia continues to dominate with H100 and Blackwell GPUs. Analysts note that AI5 could position Tesla not only as a leader in automotive AI but also as a competitor in the broader AI infrastructure market.
“Tesla has always pushed the envelope in integrating hardware and software,” said analyst Priya Malhotra. “AI5 could redefine the landscape for automotive AI and position Tesla as a competitor in the broader AI infrastructure space.”
Next Steps
Tesla has not yet disclosed a production timeline for AI5 or the final location for its mega fab. Nonetheless, the company’s commitment to chip design and manufacturing underscores its long-term vision to lead in autonomous driving and AI hardware innovation.
