Musk hints at Intel partnership as Tesla plans “gigantic chip fab”
Tesla’s AI push could offer a crucial lifeline to Intel’s struggling foundry business.
Elon Musk on Thursday raised the prospect of building a vast new chip manufacturing facility, and possibly doing so in partnership with Intel, as Tesla ramps up efforts to design and produce its own artificial intelligence chips.
Speaking at Tesla’s annual meeting, Musk said the company is developing its fifth-generation AI processor, known internally as AI5, to power its autonomous driving ambitions. The Tesla chief told shareholders that existing chip suppliers may not be able to meet the company’s demand.
“Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” he said. “So I think we may have to do a Tesla terafab. It’s like giga but way bigger.”
Musk said the company has not signed any agreements but is open to discussions with Intel. “You know, maybe we’ll do something with Intel,” he told a cheering crowd. “We haven’t signed any deal, but it’s probably worth having discussions with Intel.”
Intel, which operates its own chip manufacturing plants and has been seeking new external customers for its latest technology, declined to comment.
The U.S. government recently acquired a 10 percent stake in Intel as part of its broader effort to strengthen domestic semiconductor production.
Tesla currently partners with Taiwan’s TSMC and South Korea’s Samsung for chip fabrication. A small number of AI5 units are expected to be produced in 2026, with full-scale manufacturing targeted for 2027. Musk added that the next generation, AI6, would use the same factories but deliver roughly twice the performance, with volume production starting in mid-2028.
He said the proposed Tesla chip would be inexpensive, power-efficient, and optimized for the company’s own software, consuming about one-third the power of Nvidia’s leading Blackwell chip at one-tenth the cost to make.
“I’m super hardcore on chips right now, as you may be able to tell,” Musk said. “I have chips on the brain.”
While he did not specify where or how Tesla would construct such a “gigantic chip fab,” Musk suggested it could produce at least 100,000 wafer starts per month, a scale that would place Tesla among the world’s largest semiconductor producers.
The comments came on a day of triumph for Musk, as Tesla shareholders approved a $1 trillion pay package spread over the next decade, reaffirming their faith in his vision of transforming the electric carmaker into an AI and robotics powerhouse.
Reuters contributed to this report.
