TECH NEWS – Tesla’s CEO believes that, to be a leader in the artificial intelligence race, the company will have to surpass Nvidia and AMD in production.

In recent weeks, Elon Musk has made some interesting statements about chip manufacturing, suggesting that the carmaker is eager to increase its production capacity to meet estimated demand. In a tweet, Musk revealed that Tesla has been manufacturing AI chips for years and currently operates on a 12-month product cycle. Musk’s goal is to produce AI chips in greater quantities than any other manufacturer, which would mean reaching unprecedented production levels.

Most people don’t know that Tesla has had an advanced AI chip and board engineering team for many years.

That team has already designed and deployed several million AI chips in our cars and data centers. These chips are what enable Tesla to be the leader in real-world AI.

The…

— Elon Musk (@elonmusk) November 23, 2025

This is not the first time Musk has expressed his desire to manufacture chips on a massive scale. Based on his previous statements, he wants to produce up to 200 billion AI chips per year. This is driven by the introduction of Tesla’s FSD-focused fleet. However, we still don’t know how Tesla could integrate such a staggering number of chips unless Musk has other plans. Tesla is expanding into new areas with Optimus and Cybercab, but such semiconductor demand seems excessive and impossible with existing resources.

Regarding manufacturing constraints, Musk revealed plans to build TeraFab to address this bottleneck and meet Tesla’s projected semiconductor demand. Tesla has diversified its chip sourcing strategy by integrating TSMC and Samsung for its AI5 and next-generation AI6 chips and planning to bring Intel Foundry on board. Musk still believes that chip manufacturers are unable to meet his demand and therefore believes that his plans to build a chip supply chain are reasonable.

Even for a company like Tesla, which has little experience in chip manufacturing, building a chip supply chain is no easy task. Musk has already started building parts of SpaceX’s chip supply chain. However, to meet Tesla’s estimated demand, collaboration is the only solution.

Source: WCCFTech