Elon Musk Wants To Develop AI Chip Maker Giant Factory For Tesla

Elon Musk wants to build an AI chip factory (photo: X @ElonMusk)

JAKARTA Tesla CEO Elon Musk said that his company may need to build a 'giant chip factory'. This plan arose because Tesla wanted to produce an Artificial Intelligence processor (AI).

In addition to imagining the construction of a giant manufacturing factory, Musk is also reflecting on the potential for cooperation with Intel, a popular semiconductor company in the world. These two things were conveyed at the company's annual meeting on Thursday, November 6.

The desire to build this factory is also in line with its newest activities. The company is reportedly designing a fifth-generation AI processor called AI5. This processor will support the full autonomous system of vehicles.

"You know, maybe we'll do something with Intel," Musk said, according to Reuters. Although currently the two companies haven't discussed anything, Musk said that discussions with Intel were a good move.

Musk's statement managed to jump Intel's shares by 4 percent in trading after working hours. As one of the chipmakers in the world, Intel owns its own factory, but the company is still lagging behind NVIDIA.

To pursue AI chip competition, a deal with Tesla might be the right move. The reason is, Intel needs to find external customers to drive its newest manufacturing technology.

Although Tesla has partnered with TSMC from Taiwan and Samsung from South Korea for chip production, Musk said that supply from external suppliers is still not enough. Tesla is considered to need a huge volume of chips.

"I think we may need to build a Tesla terafab," Musk said. The billionaire estimates that the Tesla giant factory will produce at least 100,000 wafer starts per month to reach the required chip volume.

Musk did not provide details on how the factory would be funded or built. However, Musk stressed the importance of efficiency. This AI chip will be designed cheaply, power-efficient, and optimally for Tesla vehicle software.