Musk confirms SpaceX AI, Tesla will continue ordering Nvidia chips at scale

Elon Musk officially announced on Wednesday that SpaceX AI and Tesla will continue to order Nvidia chips at scale to support their operations. Tesla is currently designing its fifth-generation AI chip to advance its autonomous driving goals. While the AI5 chip can handle data center training, it is optimized specifically for edge computing in the Optimus humanoid robot and the upcoming Robotaxi.

The billionaire said that Tesla’s massive in-house semiconductor manufacturing facility, known as the “Terafab project”, will launch in seven days. This marks a significant shift for Tesla as it transitions from a fabless model to an Integrated Device Manufacturer (IDM).

Tesla CEO said last year that it probably would have to build a gigantic chip fab to make artificial intelligence chips. Tesla is working to design a remarkable fifth-generation AI chip to power its autonomous ambitions, and Musk at the company’s annual meeting last year laid out potential manufacturing plans.

A wide release for the latest version of Full Self-Driving software is expected in the coming weeks. These proprietary chips serve as the primary engine for Tesla’s autonomous driving systems and FSD software. Following an all-stock acquisition of xAI by SpaceX last month, Musk has begun referring to the combined entity as SpaceX AI. This restructuring comes ahead of a potential high-profile SpaceX initial public offering (IPO) later this year.