According to Musk, the development of the AI5 chip is a crucial project for Tesla's future. He stated that he dedicates his Saturdays and Tuesdays to working on this project. The AI5 is expected to provide a significant performance increase—50 times compared to previous models. It is also anticipated that the computing power will increase by 10 times, memory capacity by 9 times, and the efficiency of quantization and softmax operations by 5 times, which is critically important for the functioning of autonomous vehicles and robots.
The launch of AI5 chip production is scheduled for 2027, and its successor, AI6, may be released a year later if everything goes according to plan. Musk emphasized that Tesla does not intend to sell these chips to other companies, as they are intended solely for internal use.
"We need these chips for ourselves," he noted, adding that the company is confident in the chosen architecture.
Musk also pointed out that the main limiting factor for Tesla's growth in the coming years will be access to chips, rather than vehicle production volumes. Without specialized AI processors needed for autonomous robotaxis and Optimus robots, business expansion will be impossible. Currently, Tesla has guaranteed supplies for three years, but the future situation remains uncertain.
In this context, Musk returned to the idea of creating its own semiconductor factory, TeraFab, which will allow for the vertical integration of the production of logic chips, memory, and packaging. He expressed concerns that without its own production, Tesla would remain vulnerable to disruptions in global supply chains, especially in light of geopolitical tensions in the Taiwan region.
However, CFO Vaibhav Taneja clarified that the TeraFab project is not yet included in the company's investment plans.
At the same time, Tesla continues to invest in AI infrastructure. In the first half of 2026, the company plans to more than double its computing power for AI training at its Texas factory, equivalent to the capabilities of Nvidia H100 GPUs. As part of this project, a new supercomputer, Cortex 2, is being built at Gigafactory. Tesla also announced a $2 billion investment in xAI, a startup owned by Musk.
The conference also discussed robotics and global competition. Musk stated that China will play the role of Tesla's main competitor in the field of humanoid robots. He emphasized that China combines strong AI developments with outstanding manufacturing scalability, as has already happened in the electric vehicle market.
Nevertheless, Musk is confident that the Optimus robot will surpass its Chinese counterparts in terms of "real intelligence" and electrical mechanics, especially in the design of the hand, which is the most complex part of the robot.
At the same conference, Musk announced that Tesla will cease production of the Model S and Model X in the next quarter. The freed-up capacity at the Fremont factory will be redirected to the assembly of humanoid robots Optimus. As a result of the quarter, Tesla reported revenue of $24.9 billion and adjusted earnings per share of $0.50, exceeding some market expectations despite a year-over-year revenue decline.
