07 Nov 2025, 03:27 PM IST i Summary is AI Generated. Newsroom Reviewed Elon Musk on Friday has stoked fresh speculation that Tesla could wade into chip manufacturing, telling investors that the company will "probably" need to build a "gigantic chip fab" to meet its ambitions in autonomous driving, robotics, and AI. Speaking at Tesla’s annual meeting on Nov. 7, 2025, Musk told shareholders that even under the "best-case scenario" with current external suppliers, the volume of custom AI chips required for Tesla’s autonomous driving programs and its flourishing robotics division, Optimus, would not be met. Musk suggested the electric vehicle giant may need to construct its own, massive semiconductor fabrication plant, a "Tesla terafab," to meet its rapidly expanding demands for artificial intelligence chips. The company is developing its fifth-generation AI chip, AI5, which Musk confirmed will be produced by industry leaders Samsung and TSMC, with high-volume production expected around 2027. Future generations, including AI6 and AI7, are already planned. Musk reiterated that Tesla will lean on established foundries and that he was open to talks with Intel about foundry services. On Tesla entering the foundry business, Musk’s comments suggested a conditional "maybe." "One thing I’m trying to figure out is how to make enough chips, maybe we’ll work with Intel, but even when we extrapolate the best case scenario for chip production form our suppliers. It is still not enough. I can't see any other way to get to the volume of chips we are looking for, so I think we will have to build a gigantic chip fab," said the Tesla CEO.