Tesla CEO Elon Musk listens to U.S. President Donald Trump speak to reporters in the Oval Office of the White House on May 30, 2025 in Washington, DC.
Kevin Dietch | Getty Images
Tesla’s The upcoming artificial intelligence chip, called AI5, will be manufactured by Samsung in Texas and TSMC in Arizona, CEO Elon Musk told investors on Wednesday.
During the electric car maker’s third-quarter earnings conference, Musk said Tesla is aiming for “overproduction” and that chips not used in cars or robots can be used in the company’s data centers.
“Our clear goal is to have an oversupply of AI5 chips,” Musk said.
Previously used by Tesla Nvidia’s The company’s vehicles used to be equipped with drive chips, but they stopped installing them in 2019 in favor of in-house processors. Musk said Tesla will continue to use Nvidia’s graphics processing equipment, which dominates the AI market, to train its models.
“To be clear, we’re not replacing Nvidia, but we’re using a combination of both,” Musk said. Tesla announced Wednesday that it has the equivalent computing power of 81,000 Nvidia H100 chips.
Musk’s comments offer another glimpse into Tesla’s AI chip strategy.apple Engineer Peter Bannon left the company earlier this year. Mr. Bannon previously led Tesla Inc.’s chip design and led the development of Dojo, a supercomputer aimed at helping the company improve its driverless driving technology.
The AI5 chip was first announced at Tesla’s shareholder meeting in 2024. This is the latest version of the car company’s Autopilot hardware, which processes the signals needed for self-driving functions. In July, Samsung announced it had won a $16.5 billion chip contract with an unnamed customer, which Musk later confirmed was Tesla.
Musk said at the time that the AI5 chip would be made by TSMC, and its successor, the AI6 chip, would be made by Samsung. He said Wednesday that the AI5 chips will be manufactured at both foundries’ U.S. facilities. He said it fits a “half reticle.” That means the chip is half the size of Nvidia’s “full reticle” AI chip design. advanced micro device.
Nvidia CEO Jensen Huang holds a motherboard and speaks at the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles Exhibition Center in Paris, France on June 11, 2025.
Gonzalo Fuentes | Reuters
like a hyperscaler google, Amazon and microsoft Companies are investing in their own AI chips to provide an alternative to Nvidia. That’s because some AI experts argue that custom chips could be more cost-effective and faster for certain tasks.
Aside from Tesla, only Apple currently designs and uses its own silicon both in its own products and in its data centers for AI services.
Musk said that because Tesla is AI5’s only customer, chip designers were able to focus on the company’s needs and eliminate older parts of the chip that slowed it down.
“Tesla only needs to meet the demands of one customer,” Musk said. “This makes the design work much easier and means we can remove a lot of complexity from the chip.”
He said Tesla’s design team removed the chip’s traditional GPU, signal processor and other components, and predicted the chip could deliver “perhaps 10x” the best performance per dollar for AI.
“NVIDIA has done a great job of addressing an almost impossible set of requirements,” he said. “But in our case, we’re looking for radical simplicity.”
Musk’s AI startup, xAI, does business with Tesla and is a major customer of Nvidia. The company is currently building its second large-scale supercomputing facility in the region in Memphis, Tennessee, based on high-end Nvidia Grace Blackwell chips.
—CNBC’s Lora Kolodny contributed to this report.
WATCH: Tesla stock falls as Musk fails to mention robotaxi fleet
