Saad Ullah
● Sawyer Merritt recently shared some fascinating updates from Elon Musk about Tesla's upcoming AI5 chip—the brain behind the company's next Hardware 5 (HW5) platform for self-driving and AI systems. According to Musk, this isn't just an incremental upgrade. It's a complete ground-up redesign that combines GPU and AI processor functions into one unified architecture.
We are actually going to focus TSMC and Samsung on AI5. The chip design is an amazing design. By some metrics, it will be 40x better than AI4. With AI5, we deleted the legacy GPU. It basically is a GPU. We also deleted the image signal processor. This is a beautiful chip. I've poured so much life energy into this personally. It will be a real winner. Here's what Musk had to say
● He went on to reveal that he's been personally involved, working on it almost every weekend for the past few months.
● So what's the play here? Tesla is doubling down on vertical integration for AI computing. By designing their own chip and having it manufactured by TSMC and Samsung, they're cutting ties with external GPU suppliers like NVIDIA. That's a bold move, but it comes with risks. If there are manufacturing hiccups or supply chain issues at the fabs, Tesla could face delays getting HW5 vehicles out the door.
● From a money perspective, owning their own AI hardware could save Tesla a fortune in the long run and give them a serious edge in Full Self-Driving (FSD) performance. But if production yields don't pan out, they could hit some short-term budget headaches. Some analysts think Tesla might balance this out by charging more for premium FSD subscriptions or exploring AI licensing deals.
Saad Ullah
