Elon Musk Says Tesla's AI5 Self-Driving Chip Will 'Punch Above Its Weight,' Sees Data Center Use

Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk has predicted that the automaker’s upcoming AI5 self-driving chip will match the capabilities of more expensive, powerful AI chipsets amid a push towards artificial intelligence. AI5 Will Punch Far Above Its Weight On Wednesday, user Phil Beisel compared the architecture of Tesla’s AI5 chip with NVIDIA Corp‘s (NASDAQ:NVDA) Blackwell chip, noting that Tesla’s “half reticle” design could give AI fabs a major boost if it can match the latter’s capabilities. “A reticle defines the imaging area of a lithography machine, fitting two chips per shot effectively doubles yield,” Beisel said. Tesla's forthcoming AI5 uses a half-reticle design, which is crucial for yield. A reticle defines the imaging area of a lithography machine, fitting two chips per shot effectively doubles yield.This means the Tesla chip design team had to carefully manage die features, for… https://t.co/vLWkNpPfvS pic.twitter.com/LgFmNJ7dZa— phil beisel (@pbeisel) March 18, 2026 Responding to Beisel, Musk shared his take on the matter. “AI5 will punch far above its weight,” he said, outlining that its capabilities were possible because Tesla aims to “make maximally effective use of every circuit.” Musk also said that while the upcoming chip could see applications in data centers, it’s “primarily optimized for AI edge compute in Optimus and Robotaxi.” Musk then shared that despite the advancements, there was room for improvement. He said that a single AI6 chip could match a dual SoC AI5 within “the same half reticle and same process node.” AI5 will punch far above its weight, because the entire Tesla AI software stack is designed to make maximally effective use of every circuit. We co-signed our AI software and hardware. Bear in mind that AI5, while it can be used for training in data centers, is primarily…— Elon Musk (@elonmusk) March 19, 2026 Huge Admirer Of Jensen Huang In the same thread, Musk also shared that he was a “huge admirer” of both Nvidia and Jensen Huang. He also hailed Nvidia’s current status as the leading company by market capitalization in the world. “That market cap is well-deserved,” he said, adding that both SpaceX and Tesla “expect to continue ordering Nvidia chips at scale.” Nvidia remains the world’s largest company by market capitalization, boasting a total market cap of over $4.3 trillion, followed by Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Apple Inc. (NASDAQ:AAPL) with $3.7 trillion and $3.6 trillion, respectively. I am a huge admirer of Nvidia and Jensen btw. That market cap is well-deserved.SpaceX AI and Tesla expect to continue ordering Nvidia chips at scale.— Elon Musk (@elonmusk) March 19, 2026 Tesla’s Terafab, Nvidia’s GTC 2026 Tesla has been ramping up its AI chip efforts, with Musk earlier announcing that the company’s Terafab AI chip project was scheduled to kick off operations soon. The project would focus on producing the automaker’s AI5 chip, a crucial element of Tesla’s self-driving efforts. Meanwhile, Nvidia, at the GTC 2026 event earlier this week, unveiled an updated iteration of its Alpamayo self-driving suite, as well as announced that companies like BYD Co. Ltd. (OTC:BYDDY) (OTC:BYDDF) and Geely Automobile Holdings Ltd. (OTC:GELHY) (OTC:GELYF) would be incorporating Nvidia tech into their self-driving stacks. Doubts Remain About Tesla FSD However, experts like Ross Gerber of investment firm Gerber Kawasaki remain skeptical of Tesla’s self-driving efforts, with the investor sharing that Tesla’s current lineup of vehicles wouldn’t be able to achieve unsupervised self-driving capabilities without hardware upgrades. Tesla was also recently sued by a Texas-based Cybertruck owner after the vehicle’s autopilot system allegedly failed to make a turn, resulting in the car crashing into the wall of an overpass above the freeway. The plaintiff, Justine Saint Amour, has also questioned Musk’s appointment as CEO. Logs show driver disengaged Autopilot four seconds before crashing— Elon Musk (@elonmusk) March 18, 2026 Musk, on the other hand, has claimed that the internal logs of the vehicle showcased that Tesla’s Autopilot was disengaged four seconds before the crash, sharing that the driver was in control of the vehicle instead. According to Benzinga Edge Rankings, Tesla scores well on the Momentum metric and also offers a favorable price trend in the Long term. Price Action: TSLA declined 1.63% to $392.78 at market close on Wednesday, but gained 0.11% to $393.22 during overnight trading. Check out more of Benzinga's Future Of Mobility coverage by following this link. Photo courtesy: Frederic Legrand – COMEO from Shutterstock