Tesla likely to build "gigantic" chips plant, Elon Musk says

Catch up quick: Tesla, which currently sources chips from companies like Nvidia, also designs its own internally.

• It has manufacturing deals with chip fabricators including Samsung and TSMC. And Musk said Thursday that the company may also make a deal with Intel.

Driving the news: "I can't see any other way to get to the volume of chips that we're looking for," Musk said about manufacturing Tesla's own designs, speaking during the company's annual shareholder meeting in Texas.

• "I think we're probably going to have to build a gigantic chip fab," he said.

He did not say when he anticipates needing such a plant or where it might be located.

• "It's like giga but way bigger," he said, referencing the company's current gigafactories, which build vehicles and batteries.

Zoom in: Musk has been spending much of his time recently with Tesla's chip design team as they pursue a specialized chip for internal purposes.

• He said the company is working on a chip that would use "about a third of the power" of Nvidia's Blackwell chip with "roughly comparable performance and much less than 10% of the cost."
• Musk praised Nvidia's chip but said it has the disadvantage of needing to be used for many different purposes, whereas Tesla can design chips specifically for its own needs.

Tesla expects to use the chips in products like the Cybercab, a driverless vehicle without a steering wheel or pedals, and Optimus, a humanoid robot. Musk on Thursday made several bold claims about the future of Optimus, including that it will:

• "Be better than the best human surgeon" at conducting surgery.
• "Eliminate poverty."
• Increase the size of the economy "by a factor of 10 or more."
• Eventually be made for a cost of $20,000.

The Cybercab, he added, will begin production in April.

• Musk also said Tesla's current vehicles would likely give drivers the ability to text and drive within months. Currently, Tesla drivers are required to keep their eyes on the road.

Go deeper

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