Elon Musk Says Tesla's AI5 Chip Will Crush Competition On Performance-Per-Watt, Says AI6 Will Take That 'Much Further'

Core Insights - Elon Musk emphasized Tesla's in-house chip strategy, highlighting the AI5 chip as the most powerful and efficient inference chip for models under approximately 250 billion parameters, with the AI6 chip expected to enhance performance further [1][2] Group 1: Chip Development - Tesla's AI5 chip is touted as offering the lowest cost silicon and best performance per watt [2] - The company has streamlined its chip development from two architectures to one, indicating a more focused approach [3] Group 2: Partnerships and Manufacturing - Tesla has established a $16.5 billion multiyear partnership with Samsung Electronics for the domestic manufacturing of the AI6 chip, while Taiwan Semiconductor Manufacturing Co. will produce the AI5 chip [4] - This dual-partner strategy is seen as advantageous, providing Tesla with valuable foundry experience compared to competitors reliant on a single supplier [5] Group 3: Market Potential - Analysts view Tesla's AI business as a multi-trillion-dollar opportunity, with estimates suggesting that the AI and autonomous driving unit could be valued at $1 trillion [5] - Cathie Wood from ARK Invest described Tesla as "the largest AI project on earth," projecting that autonomous taxi networks could generate between $8 trillion to $10 trillion in global revenue over the next decade [6]