Tesla Accelerates Chip Production as Elon Musk Affirms Dojo3 Progress; AI5 Chip to Compete with NVIDIA’s Blackwell Offering Superior Performance per Dollar

Tesla is ramping up its commitment to custom silicon, with CEO Elon Musk announcing the company’s ambitious plans to rival NVIDIA’s market leadership in chip manufacturing.

Elon Musk Aims for Tesla to Lead in Global Chip Production

Musk has been vocal about Tesla’s chip development goals, particularly after receiving a significant pay package. His vision includes the creation of a ‘TeraFab’ to meet the surging demand for chips that existing suppliers like Samsung and TSMC cannot satisfy. Recently, in a post on X, Elon discussed the plans to advance four generations of Tesla’s custom chips. Additionally, with the Dojo3 supercomputer back on schedule, notable developments concerning AI5 silicon performance were revealed.

Now that the AI5 chip design is in good shape, Tesla will restart work on Dojo3. If you’re interested in working on what will be the highest volume chips in the world, send a note to [email protected] with 3 bullet points on the toughest technical problems you’ve solved.

— Elon Musk (@elonmusk) January 18, 2026

A few months earlier, Tesla had announced the shutdown of its Dojo supercomputer project due to a heavy reliance on external hardware, particularly from NVIDIA. Reports indicated that changes in key personnel related to the Dojo project played a significant role in this decision. However, recent updates from Musk suggest that the Dojo3 project is being revived, emphasizing Tesla’s urgent need for advanced computing capability and solidifying their commitment to developing in-house silicon.

Although details about the construction of the Dojo3 supercomputer remain sparse, Musk’s insights imply it may utilize AI5-based clusters. This indicates a strategic shift towards a uniform silicon platform for both automotive applications and the Tesla Optimus project. By labeling AI5 as the “highest volume” chip, Musk is signaling that production scale will significantly exceed Tesla’s prior chip endeavors.

Moreover, Musk has elaborated on the future roadmap for Tesla’s custom silicon, revealing plans to develop AI9 chips with a rapid “nine-month”product release cycle parallel to NVIDIA’s approach. This pivot toward in-house chip production is rooted in Tesla’s objective to achieve a competitive pricing advantage as Full Self-Driving (FSD) technology becomes commonplace. By controlling the silicon supply chain, Tesla can optimize chip performance to fit its unique specifications, potentially outpacing competitors.

Solving AI5 was existential to Tesla, which is why I had to focus both the teams on that chip and I’ve personally spent every Saturday for several months working on it. This will be a very capable chip. Roughly Hopper class as single SoC and Blackwell as dual, but it costs…

— Elon Musk (@elonmusk) January 19, 2026

Regarding the AI5 chip’s performance, Musk indicated that it is expected to match the capabilities of Hopper-class chips in single configurations and approach Blackwell performance with dual dies. He noted that the cost of the AI5 chip is “peanuts, ”reinforcing Tesla’s strategy to develop an economically viable silicon ecosystem. While Musk’s optimism about the venture is evident, the semiconductor industry is notoriously challenging, typically requiring decades of expertise to master every facet, from design through to production.

Could Tesla emerge as a formidable player in the chip manufacturing sector? Musk’s recent declarations suggest a clear intent to reach this goal. However, successful execution across all phases of chip development—ranging from design to yield stability—will be crucial for Tesla’s ambitions.

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