Tesla CEO Elon Musk announced that the upcoming AI5 chip will be produced by Samsung in Texas and TSMC in Arizona. Musk aims for an oversupply of chips, with any extras used in data centers. The chip will replace Nvidia Drive chips, but Tesla will still use Nvidia GPUs for training. The AI5 chip was first revealed in 2024 and will be the latest version of Tesla’s Autopilot hardware. Samsung secured a $16.5 billion chip contract with Tesla, with the AI6 chip to be made by Samsung in the future. Other tech giants like Google, Amazon, and Microsoft are also investing in their own AI chips. Musk emphasized the benefits of Tesla being the only client for the AI5 chip, allowing for greater customization and improved performance. Tesla’s design team removed legacy parts from the chip to optimize performance, aiming for a drastic improvement in AI performance per dollar. Musk’s AI startup xAI is a major Nvidia customer and is building a supercomputing facility with Nvidia Grace Blackwell chips.

Read more at CNBC: Musk says Tesla ‘not about to replace Nvidia’ as EV maker builds chips