Key Takeaways
- Tesla shares jumped Monday after Elon Musk posted on social media over the weekend that the company plans to grow its AI chips business.
- The gains helped bring Tesla’s stock back into positive territory for the year after a hit in recent weeks as worries about an AI bubble weighed on tech stocks.
Elon Musk wants investors to know Tesla is an AI chip company, too.
“Most people don’t know that Tesla has had an advanced AI chip and board engineering team for many years,” the CEO posted on his social media site X Sunday, continuing that Tesla (TSLA) “has already designed and deployed several million AI chips” in its vehicles and data centers.
Tesla’s stock surged over 6% in recent trading following the post, making it one of the biggest gainers in the S&P 500. Rising expectations of a Federal Reserve rate cut next month—which could also benefit the electric vehicle maker by stimulating demand for big-ticket purchases—likely also helped boost sentiment for the stock Monday, along with broader markets.
Why This Matters for Tesla Investors
At a time when Tesla’s electric vehicle business faces a number of challenges including growing competition, its CEO has been pushing investors to see it as more than just a car company, emphasizing its developments in self-driving technology, artificial intelligence, and robotics. Elon Musk’s post over the weekend underscores how AI chips are part of its plans.
“These chips are what enable Tesla to be the leader in real-world AI,” Musk said in his post over the weekend. The company is close to upgrading the current version of its chip, called AI4, to AI5, he said, and is starting work on a newer model AI6.
Musk said Tesla now plans to get a new AI chip design into production every 12 months, and that it expects “to build chips at higher volumes ultimately 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.
With Monday’s gains, shares of Tesla are back in positive territory for the year. Still, they’ve lost more than 10% from their highs at the start of the month, having taken a big hit during the broader pullback in tech stocks in recent weeks amid worries about an AI bubble.
