• Tesla's AI chief said the AI4 chip can process a million video pixels in about a millisecond, thanks to integrated hardware-software design.
• Musk detailed progress on AI5 and AI6 and reaffirmed plans for annual chip updates.
• He said Tesla may need a“gigantic” chip fab to meet future demand for AI and robotics.

Tesla Inc.'s push into custom AI chips drew fresh attention over the weekend after the company's AI chief said its current AI4 processor can analyze a million video pixels in about a millisecond, attributing the speed to Tesla's practice of designing its hardware and software together. 

In a post on X, Ashok Elluswamy said the chips' joint development with the Tesla AI software team delivers“perf per Watt and perf per dollar” advantages that stem directly from this integrated approach. His comments followed CEO Elon Musk's latest push to accelerate Tesla's chip roadmap, which includes plans for annual chip refreshes and a future“gigantic” Tesla-built semiconductor fab.

Chip's Next-Generation Designs

The remarks came shortly after Musk detailed Tesla's internal chip program in a separate X post, saying the company has maintained an advanced chip and board engineering team“for many years” and has already deployed“several million AI chips” in its vehicles and data centers.

Musk said Tesla's current in-car chip is AI4, adding that the company is close to taping out AI5 and has already begun work on AI6. His goal is to move to a new AI chip design every 12 months, with volumes he believes could eventually surpass the combined output of all other AI chipmakers. Musk described the chips as central to Tesla's long-term work in autonomous driving and robotics, saying they will“profoundly change the world” and support both safer transportation and advanced medical applications through the company's Optimus robot.

Tesla's 'Gigantic' Semiconductor Fab

The development aligns with comments Musk made at Tesla's annual shareholder meeting on Nov. 6, where he said the company may need to build a“gigantic” chip fabrication plant to meet expected demand for its AI and robotics programs.

Tesla currently uses contract manufacturers, including Taiwan Semiconductor Manufacturing Company and Samsung Electronics, for its chip designs and is also considering working with Intel. Even with the highest projected output from existing partners, Musk said Tesla would still fall short of the chip volume it needs, prompting him to consider what he called a“Tesla terra fab.”

He said such a facility could begin with roughly 100,000 wafer starts per month and eventually scale to 1 million. A wafer start is the measurement of the output of a semiconductor wafer plant.

Musk said Tesla does not yet manufacture its own chips but continues to design them internally. He said the AI5 chip is intended to be cheaper, more power-efficient, and optimized specifically for Tesla's AI software stack.

Stocktwits Traders Call For Sharp Upside Moves

On Stocktwits, retail sentiment for Tesla was 'bearish' amid 'low' message volume.

One user said,“heavy volume will kick in on the buy side tomorrow. Expect this to moon past $430.” Another user said,“this week it will regain $420 close. Let's go $500 EOY.”

Tesla's stock has declined 3% so far in 2025.

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