Tesla teases AI5 chip to challenge Blackwell, costs cut by 90%

Tesla’s new AI5 chip may soon shake up the self-driving and robotics chip market. Elon Musk says the chip will offer the same performance as NVIDIA’s leading Blackwell chip at less than 10% of the cost. High volume will come in 2027, as the company fine-tunes the chip for its own software and products.

AI5 will power Tesla cars, the Optimus robot, data centers, and planned robotaxis. Here’s a breakdown of how Tesla is building and using the chip.

AI5 design focuses on efficiency

AI5 stands out because it runs on custom hardware. It’s made just for Tesla’s needs. The chip is optimized for self-driving and robotics tasks, built to work only with Tesla’s software stack. With this focus, Tesla cut out graphics and signal processing blocks it doesn’t need. AI5 is made for AI inference, it processes AI tasks quickly and with less energy.

Musk says AI5 will offer about a third of the power consumption of Blackwell chips. The chip is primarily integer-based, making it use less energy than floating point chips. Tesla’s AI team has trained their models to work this way, and that saves even more power.

Performance and specs

2,000–2,500 TOPS (trillion operations/second), or about 5 times faster than Tesla’s last chip, AI4.
40 times the overall speed of current Tesla hardware in some scenarios.
8 times the raw compute and 9 times the memory capacity of AI4.
5 times the memory bandwidth versus previous chips.
Efficiency is up to 3 times higher per watt than before.
Maximum 24GB LPDDR5X DRAM at 8Gbps per pin.

The chip uses a modular and tileable approach. Clusters of compute units can be resized depending on where the chip will be used either in a car, a robot, or a data center. AI5 relies on tensor accelerators and vector DSPs that handle different types of AI workloads. On-chip calibration saves time and boosts consistency when deploying models to new cars or robots.

Production details and roadmap

Samsung and TSMC will produce slightly different versions of AI5 in Texas and Arizona. Tesla is splitting production to secure supply and speed up manufacturing. Low-volume chips will arrive in 2026 for early use and testing, while larger batches come in 2027.

If Tesla ends up making too many, they will use the extra chips in their own data centers. Musk also talked about building a “terafab,” a chip factory that could make over 100,000 wafers a month. He even suggested Intel could become a partner for this effort, though no deal has happened yet.

Furthermore, Tesla is already planning AI6, which will use the same factories and double the performance of AI5 with a similar design. AI7 is farther away and may require an upgrade to more advanced factories.

Tesla’s vertical integration advantage

Because Tesla controls its software, hardware, and data, it can design chips that work just for its own systems. AI5 is optimized for Tesla’s real-world driving data and tasks. This is different from NVIDIA, which must serve a wide range of customers and software needs.

Musk’s plan is for “excess” chips to help run Tesla’s data centers and boost AI research at xAI, his AI startup. The move cuts dependence on external suppliers and helps Tesla scale its self-driving and robotic systems faster.

AI5’s approach is about focus and cost savings. Still, it is shaped for Tesla’s self-driving and robotics workloads. Chips like NVIDIA Blackwell cover a broader range of uses, including large-scale AI training tasks. But for making cars and robots smart enough to handle real-world work on their own, Tesla’s strategy could pay off.

Musk speaks directly about his priorities: “I have chips on the brain. I dream about chips, literally!” He is betting on custom hardware to push Tesla’s advantage in self-driving, robotics, and AI at a scale few can match.

Video: Elon Musk’s Full Speech on AI5

ELON MUSK: We believe the AI5 chip will be roughly comparable performance to an NVIDIA Blackwell, and at much less than 10% of the cost

Transcription:
I'm super hardcore on chips right now as you may be able to tell. I have chips on the brain. I dream about chips, Literally!… pic.twitter.com/O2yrmHOhN9
— X Freeze (@XFreeze) November 7, 2025

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