Elon Musk producing Semiconductors? Yep you heard that on right. Well the race for manufacturing chipsets is heating up. Ever since the arrival of AI there has been increased demand for chipsets capable of handling advanced AGI models and their tasks. Moreover, since the use case scenario for chipsets is very diverse, it poses risks of supply chain issues.
Tesla CEO Elon Musk is strategically investing in chipset manufacturing to support the expansion of Tesla Automobile company. This move is aimed at protecting the supply chain of chipsets for Tesla amidst intense competition from Chinese EV car manufacturers. Moreover, the decision if successful, will reduce the dependence of Tesla on foreign chip suppliers like Samsung with whom it’s in partnership.
Could be wrong, but I think AI5 will probably be the best inference chip of any kind for models below ~250B params. By far lowest cost silicon and best performance/Watt.
— Elon Musk (@elonmusk) September 6, 2025
AI6 will take that much further.
The CEO of Tesla recently posted on ‘X’ about the progress of the new chipset his team is designing. “Just had a great design review today with the Tesla AI5 chip design team! This is going to be an epic chip. And AI6 to follow has a shot at being the best by AI chip by far,” Musk said in a post on X.
Future strategy?
Musk revealed that Tesla’s silicon strategy has been streamlined. The company is moving from developing two separate chip architectures to focusing all of its talent on just one. “Switching from doing 2 chip architectures to 1 means all our silicon talent is focused on making 1 incredible chip. No-brainer in retrospect,” he wrote.
Elon Musk Offering Jobs?
Post the announcement of a successful design review, Elon invited engineers to join his team, offering jobs. In a call for new talent, Musk invited engineers to join the Tesla silicon team, emphasising the critical nature of their work. He noted that they would be working on chips that “save lives” where “milliseconds matter.”
Tesla-Samsung Partnership
Earlier this year, Tesla signed a major chip supply agreement with Samsung Electronics, reportedly valued at $16.5 billion. The deal is set to run through the end of 2033. Musk confirmed the partnership, stating that Samsung has agreed to allow “full customisation of Tesla-designed chips.” He also revealed that Samsung’s newest fabrication plant in Texas will be dedicated to producing Tesla’s next-generation A16 chipset.
This contract is a significant win for Samsung, which has reportedly been facing financial struggles and stiff competition in the chip manufacturing market.
