Elon Musk to cheering Tesla shareholders: May be, we will do something with Intel; it's probably worth ...

Tesla CEO Elon Musk made a huge Intel announcement at the company's shareholders meeting recently. Speaking at Tesla’s annual shareholder meeting, Musk reportedly said that the company is developing its fifth-generation AI chip, known as AI5, which will power its self-driving systems.

“Maybe we’ll do something with Intel,” Musk told an enthusiastic crowd. “We haven’t signed any deal, but it’s probably worth having discussions with Intel,” he added, according to Reuters.Musk started the announcement by saying that the electric vehicle (EV) maker will likely have to build a “gigantic chip fab” to make its own artificial intelligence chips and suggested that Tesla could potentially collaborate with the US chipmaker Intel.Elon Musk’s announcement came as Tesla shareholders approved a $1 trillion pay package for the CEO, reaffirming their support for his plan to transform Tesla into a leader in artificial intelligence and robotics. Tesla shareholders have voted in favor of CEO Elon Musk’s almost $1 trillion pay plan, with 75% support among voting shares. Board members recommended shareholders approve the pay plan, which they introduced in September.

Tesla depends on TSMC and Samsung, but still faces chip shortages

Tesla currently uses chips from Taiwan Semiconductor Manufacturing Co (TSMC) and South Korea’s Samsung Electronics for its self-driving hardware. Musk said that limited production of the AI5 chip is expected in 2026, with mass production possible in 2027. He added that a next-generation AI6 chip could double performance using the same fabrication facilities, with high-volume output targeted for mid-2028.“Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough,” Musk said.

“So I think we may have to do a Tesla terafab — it’s like giga but way bigger.”While Musk offered few details about where or how such a facility would be built, he said it would need to produce at least 100,000 wafer starts per month. He added that Tesla’s AI chip would be optimized for its own software, using about one-third of the power of Nvidia’s top-tier Blackwell chip and costing roughly 10% as much to manufacture.“I’m super hardcore on chips right now, as you may be able to tell,” Musk said.

“I have chips on the brain.”Post Elon Musk's remarks, Intel shares rose about 4% in after-hours trading. The company, which has lagged behind Nvidia in the AI chip market, has been seeking major customers for its latest manufacturing technology. Earlier this year, the US government acquired a 10% stake in Intel to bolster domestic semiconductor production.