Tesla shared updates on its custom AI chip development this week. CEO Elon Musk revealed the company is close to finishing its AI5 chip design. Early planning has also begun for AI6.
Musk posted the information on X. He said Tesla aims to complete a new chip design each year. The current generation in vehicles is AI4.
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
AI5 is approaching tape-out, the final design stage before manufacturing. AI6 has entered initial planning. The company has already deployed several million AI chips across its fleet and data centers.
Samsung Electronics won a contract in July worth $16.5 billion to build these chips. A new Texas facility will handle AI6 production. Musk stated Tesla plans to manufacture more AI chips than all other companies in the field combined.
TSLA shares fell 1.05% on Friday. The stock closed at $391.09. For the year, shares are down just over 3%.
Last week showed the kind of swings Tesla investors have grown used to. The price jumped about 4% to reach $428.94 before losing momentum. It finished the day at $395.04, down roughly 2%.
Retail traders have purchased shares during each pullback this year. JPMorgan noted these rapid price movements have increased volatility. The firm said Tesla remains one of the most actively traded stocks among retail investors.
Other major tech companies have shown stronger performance. Amazon, Microsoft, and Meta Platforms have maintained growth through heavy AI spending. Tesla’s modest decline shows mixed sentiment about when chip development and autonomous driving will translate to earnings.
The stock trades at approximately 180 times projected 2026 earnings. This valuation reflects investor belief in future gains from AI and self-driving technology. The timeline for those gains remains uncertain.
Some analysts worry increased chip production could outpace demand in coming years. That could pressure margins if supply exceeds market needs.
Tesla has opened direct hiring for AI silicon engineers. The company asked candidates to submit proof of exceptional ability to a dedicated email address. Musk said Tesla seeks talent that can apply advanced AI techniques to chip design.
The chip development competes with GPU-focused architectures that companies like Nvidia dominate. Automakers and tech firms are racing to build custom silicon for autonomous driving and robotics.
Analysts remain split on Tesla. Out of 34 ratings, 14 recommend buying the stock. Ten rate it a hold, and ten rate it a sell. The average price target sits at $383.37, about 2% below current levels.
The post Tesla (TSLA) Stock: Company Advances AI5 and AI6 Chip Development Plans appeared first on CoinCentral.
