Tesla Inc. is scaling up its in-house chip-building efforts, known as “TeraFab”, amid an AI push and geopolitical uncertainty. According to Elon Musk, the company’s CEO, the AI5 Chip design is currently the number one most critical thing to get done.
Chips Are The ‘Limiting Factor’ For Tesla’s Growth
Musk stated that chip production remains a “limiting factor for Tesla’s growth” in the next three to four years. He emphasized the need for Tesla to build a TeraFab, citing geopolitical risks as a major factor in the near future. Musk warned that if Tesla doesn’t build its own TeraFab, the company will be limited by supplier output of chips.
Tesla’s 2nm Chip Ambitions
Tesla is developing its own 2nm chip amid a push towards in-house chip-making efforts. Musk has announced that Tesla will manufacture more chips than any of its competitors. The company’s fabrication process will enable a unique “wafer isolation” feature, which allows for a cleaner environment in the chip foundry.
Key Features of Tesla’s Chip Production
- 2nm chip design
- In-house chip-making efforts
- Wafer isolation feature for a cleaner environment
- Geopolitical risks driving the need for self-sufficiency
Elon Musk Touts AI4, FSD Subscriptions
Musk has also shared that the company’s AI4 (HW4) chip will be capable of running unsupervised autonomous driving technology. Additionally, Tesla has revealed that there are currently 1.1 million active FSD subscriptions, with 70% paid upfront. However, the company expects margins to be initially negatively impacted as it moves to a subscription-only model.
Tesla’s Autonomous Driving Technology
- AI4 (HW4) chip capable of unsupervised autonomous driving
- 1.1 million active FSD subscriptions
- Subscription-only model expected to impact margins
Investment and Future Plans
Tesla has announced a $2 billion investment in Musk’s artificial intelligence startup, xAI. The company is expected to make a bigger announcement on TeraFab in the future. With its accelerated chip production and AI push, Tesla is poised to remain a leader in the electric vehicle and autonomous driving industries.