Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk announced completion of a “great design review” for the company’s AI5 chip via a post on X, signaling Tesla’s push into custom semiconductors as global chip competition intensifies.
Tesla Consolidates Silicon Strategy
Musk revealed Tesla shifted from two chip architectures to one. “All our silicon talent is focused on making 1 incredible chip,” Musk stated via social media, calling it a “no-brainer in retrospect.”
The AI5 will be “an epic chip,” with AI6 having “a shot at being the best AI chip by far.” Tesla seeks silicon talent for chips that “save lives” where “milliseconds matter.”
Industry Trend Toward Custom Chips
Tesla’s strategy is similar to that of other major tech companies working to reduce dependence on outside suppliers. OpenAI plans to start large-scale production of its own computer chip next year, partnering with Broadcom Inc. (NASDAQ:AVGO) — a move that shifts it away from relying on Nvidia Corp. (NASDAQ:NVDA).
Broadcom CEO Hock Tan confirmed the company has secured a fourth big customer with $10 billion in orders, and sources say that customer is OpenAI.
Nvidia Battles Legislative Pressure
Tesla’s development comes as NVIDIA Corp. faces Congressional legislation requiring AI chipmakers to prioritize domestic orders. The Guaranteeing Access and Innovation for National Artificial Intelligence Act (GAIN Act) mandates the Commerce Department’s denial of export licenses for powerful AI chips while U.S. entities await deliveries.
Nvidia disputed the need, stating, “We never deprive American customers.” The company warned restrictions would “limit competition worldwide.”
Market Impact
Tesla’s silicon focus positions the company strategically as AI infrastructure evolves beyond traditional GPU dependence.
Price Action: TSLA closed at $350.84 on Friday, up 3.64% for the day.
Benzinga’s Edge Stock Rankings highlight the AI trailblazer, which shows strong Momentum in the 84th percentile and has a solid Growth score of 75.33, with short, medium and long-term price trends all on the rise. Track the performance of other players in this segment.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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