Quick overview

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Elon Musk, CEO of Tesla, announced in an X post on Sunday that the company is nearing completion of its AI5 chip design and has started work on a new AI6 chip, which will be installed in its vehicles and data centers. Musk, the world’s wealthiest individual, said, “Our goal is to bring a new AI chip design to volume production every 12 months.” “AI4 is currently used in automobiles; AI5 is almost finished, and work on AI6 has begun.”

Samsung Electronics Co. declared in July that it reached a $16.5 billion agreement to manufacture AI semiconductors for Tesla. At that time, Musk mentioned that the AI6 chip would be made at a new Samsung facility in Texas. In his Sunday post, Musk stated, “We anticipate building chips at higher volumes ultimately than all other AI chips combined.” “I’m serious.”

Tesla’s stock (NASDAQ: TSLA) has been volatile in 2025, trading between $350 and $400 per share as of late November. Analysts generally see Musk’s AI chip updates as bullish, enhancing Tesla’s edge in robotics and autonomous driving despite competition from Waymo, Cruise, and Chinese electric vehicle manufacturers.

The internal chip approach may reduce costs (e.g., decreasing dependency on Nvidia) and enable proprietary optimizations, potentially accelerating the release of FSD v13+ and Optimus.

The bullish case is centered on AI differentiation: the unveiling of cyber taxis in 2026 (initially using AI4 due to delays) could confirm Tesla’s “robotaxi” vision if the deployment of AI5 and AI6 succeeds.

If FSD reaches Level 4 autonomy, analysts like those at Wedbush predict TSLA could hit $500+ by the end of 2026. The company aims for dual sourcing from the U.S., reducing supply risks through fabs like Samsung and TSMC, with Musk referencing a large “TeraFab”—Tesla’s own $10–$20 billion chip plant—indicating a move toward long-term self-sufficiency.

 

Aiming for $420–$450 by mid-2026 if AI5 samples meet benchmarks, the forecast is moderately optimistic for the next 12–18 months. Assuming 20–30% yearly revenue growth from autonomy, long-term (2027+) AI6 and fab expansions could push TSLA toward $600+.