Tech billionaire Elon Musk has thrown down the gauntlet, asserting that Tesla could soon eclipse every other manufacturer of AI chips. This is a significant claim that challenges the established giants in the semiconductor space.
Naturally, such a bold declaration from one of the world’s most influential figures has prompted immediate and varied reactions from the investment community.
Building Blocks: Tesla’s Growing Chip Programme
Elon Musk announced that Tesla Inc. aims to produce more AI chips than all other manufacturers combined. This ambitious objective is supported by a large-scale campaign to attract the industry’s best chip design talent.
Writing on X (formerly known as Twitter) over the weekend, Musk confirmed that Tesla has had an advanced, dedicated team for engineering AI chips and boards for a long time. He went on to mention that this group has already created and installed ‘several million’ of chips in the company’s cars and data centres.
Tesla nears final design of AI5 chip
Tesla is moving closer to the next version of its artificial intelligence (AI) hardware, with CEO Elon Musk confirming the company is nearing the tape-out stage for its AI5 chip while at the same time beginning development of its successor,… pic.twitter.com/04qeVHSHhw
— Joe Hansen (@joehansen) November 24, 2025
These components are fundamental to Tesla’s success in practical artificial intelligence and achieving self-driving capability.
Musk disclosed that Tesla is currently shipping the fourth iteration of its AI processor, called AI4, while preparing to finalise AI5 and starting initial work on AI6. He stated the company’s ultimate goal is to move a new chip architecture into full-scale manufacturing every year.
Most people don’t know that Tesla has had an advanced AI chip and board engineering team for many years.
That team has already designed and deployed several million AI chips in our cars and data centers. These chips are what enable Tesla to be the leader in real-world AI.
The…
— Elon Musk (@elonmusk) November 23, 2025
He further stated that Tesla eventually anticipates producing more AI chips than the entire industry combined. To emphasise the point, he wrote: ‘We expect to build chips at higher volumes ultimately than all other AI chips combined. Read that sentence again, as I’m not kidding.’
Investor Reaction: The Market Surge
Following the post, a report from Investopedia indicated that Tesla’s stock jumped by over 6% in recent trading, positioning it among the S&P 500’s top performers. Adding to the positive Monday sentiment was the growing belief that the Federal Reserve will reduce interest rates next month.
This expected rate cut would benefit the electric vehicle manufacturer by encouraging consumers to make major purchases, a factor that also supported the broader market.
Distraction or Diversification? Why Chip Volume is Key
The CEO of Tesla is pressing investors to recognise the firm’s identity beyond being merely a vehicle manufacturer, highlighting its advances in robotics, AI, and self-driving systems. This push comes at a critical time, as the company’s primary electric vehicle division is facing several hurdles, including stiffer market competition.
Musk’s statement on social media this past weekend further highlights the critical importance of AI chips within this long-term business outlook. In his weekend post, Musk declared that ‘These chips are what enable Tesla to be the leader in real-world AI.’
Tesla Inference Chip Roadmap
Elon is outlining a roadmap for Tesla’s AI chips—designed primarily for inference workloads that power vehicle and bot autonomy (FSD and Optimus). These same chips also play a crucial role in Tesla’s cloud infrastructure, accelerating simulation and… https://t.co/7N5RJcmGsj pic.twitter.com/hXNtLTSen9
— phil beisel (@pbeisel) November 2, 2025
He mentioned that the company is on the verge of updating its current processor, AI4, to the new AI5 model and has already begun development of the subsequent chip, AI6.
The Final Target
Musk also stated that the company is now aiming to put a new AI chip design into full production annually, adding that Tesla anticipates producing chips at a capacity greater than the combined output of rivals, thereby advancing its ambitions in self-driving and robotics.
Following Monday’s lift, Tesla’s stock is back in positive territory for the year. Nevertheless, the shares have fallen by more than 10% from their peak at the start of the month, amid the wider decline in technology stocks over recent weeks, driven by concerns about an AI market bubble.
In addition to his product update, Musk also used his post to directly invite applications from engineers interested in working on the Tesla AI chip programme.
