Musk plans 'terafab' for Tesla AI chips, explores Intel partnership
What's the story
Tesla CEO Elon Musk has hinted that the company might need to build a huge chip fabrication plant. The move is aimed at meeting the growing demand for artificial intelligence (AI) chips. Musk even suggested a possible partnership with Intel to help with this ambitious project. The announcement was made during Tesla's annual meeting on Thursday, where he discussed potential manufacturing plans for their fifth-generation AI chip.
Potential partnership
Potential lifeline for struggling US chipmaker Intel
During the meeting, Musk said, "You know, maybe we'll do something with Intel." His statement was met with cheers from Tesla shareholders. However, he also clarified that no deal has been signed yet. The comment comes as a potential lifeline for struggling US chipmaker Intel, which has its own factories but has fallen behind NVIDIA in the AI chip race.
Tech advancement
Tesla's AI chips crucial for autonomous driving systems
Tesla's AI chips are key to its autonomous driving systems, including the Full Self-Driving software. The company is currently using its fourth-generation chip and plans to produce a small number of units of the fifth-generation (AI5) by 2026. However, high-volume production won't be possible until 2027. Musk also revealed that the sixth generation (AI6) will use the same fabs but deliver nearly double performance with mid-2028 volume production.
Production strategy
Musk proposes building 'Tesla terafab'
Musk said even the best-case scenario for chip production from their suppliers isn't enough. He proposed building a "Tesla terafab," which would be bigger than a giga. The CEO said, "I can't see any other way to get to the volume of chips that we're looking for." He also added that this fab would have a minimum output of 100,000 wafer starts per month.
Chip specifications
New chip to be cheap and power-efficient
Musk said the new chip would be cheap, power-efficient, and tailored for Tesla's software. He claimed it would consume about a third of the power used by NVIDIA's flagship Blackwell chip, at 10% of the production cost. This ambitious plan comes after shareholders approved a $1 trillion pay package over the next decade for Musk, backing his vision of transforming Tesla into an AI and robotics powerhouse.