Important points
Elon Musk wants investors to know that Tesla is also an AI chip company.
“Most people don’t know that Tesla has had a sophisticated AI chip and board engineering team for years,” the CEO wrote on his social media site XSunday, adding that Tesla (TSLA) “has already designed and deployed millions of AI chips in our vehicles and data centers.”
Following the post, Tesla’s stock price rose more than 6% in recent trading, making it one of the biggest gainers in the S&P 500 index. Rising expectations for a Federal Reserve rate cut next month – which could also benefit electric car makers by stimulating demand for big-ticket purchases – also likely helped boost sentiment across the market and across markets on Monday.
Why this matters to Tesla investors
As Tesla’s electric vehicle business faces many challenges, including increased competition, the company’s CEO has emphasized developments in self-driving technology, artificial intelligence and robotics, urging investors to see Tesla as more than just a car company. Elon Musk’s post over the weekend highlights that AI chips are part of the company’s plans.
“These chips allow Tesla to become a leader in real-world AI,” Musk said in a post over the weekend. He said the company is close to upgrading from the current version of the chip, called AI4, to AI5, and is starting work on a newer model, AI6.
Musk said Tesla currently plans to bring a new AI chip design into production every 12 months and expects to “ultimately produce more chips than all other AI chips combined,” furthering Tesla’s self-driving and robotics goals.
Musk also used his post to solicit applications from engineers who want to work on Tesla’s AI chip program.
Monday’s gains put Tesla stock back in positive territory for the year. Still, it has been hit hard by a broader selloff in tech stocks in recent weeks amid concerns about an AI bubble, and is down more than 10% from its highs at the start of the month.
