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Elon Musk is setting high expectations for Tesla AI5 and AI6 chips

Musk confirmed this week that Tesla had just completed a design review for AI5.

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Image used with permission for Teslarati. (Credit: Tom Cross)

Elon Musk is setting high expectations for Tesla’s in-house silicon program. As per Musk in a set of recent posts on X, Tesla’s AI5 and AI6 will be game-changing. 

Tesla’s AI5 and AI6 are incredibly important for Tesla’s future, which will likely be built on the back of very high-volume products like Optimus and the Cybercab.

Musk sets high expectations

Musk confirmed this week that Tesla had just completed a design review for AI5, which will initially be manufactured by TSMC in Taiwan before production ramps in Arizona. As per Musk, consolidating Tesla’s chip design efforts into one architecture has allowed the company to focus its silicon talent on delivering a single high-performance platform. 

“Just had a great design review today with the Tesla AI5 chip design team! This is going to be an epic chip. And AI6 to follow has a shot at being the best (by) AI chip by far. Switching from doing 2 chip architectures to 1 means all our silicon talent is focused on making 1 incredible chip. No-brainer in retrospect,” Musk wrote in his post.

In a follow-up post, the CEO also stated that the company’s upcoming AI5 chip “will probably be the best inference chip of any kind” for models below ~250 billion parameters, with the “lowest cost silicon and best performance per watt.” Musk added that AI6, which follows AI5, “has a shot at being the best AI chip by far.”

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AI6 as Dojo’s successor

While AI5 is nearing production, Musk has also pointed to AI6 as Tesla’s next major target. The chip will be manufactured at Samsung’s upcoming Texas facility, part of a multibillion-dollar deal to support Tesla’s next-generation products such as the Cybercab and the Optimus humanoid robot. Musk also noted that AI6 could effectively replace Project Dojo as Tesla’s training platform, given its potential for both inference and training workloads.

Industry veterans have echoed this view, with former Apple and Rivian engineer Phil Beisel suggesting that “AI6 is now Dojo.” Musk appeared to agree, responding with a “bullseye” emoji. Musk has also noted on X that he would personally be walking the line in Samsung’s upcoming AI6 factory in Texas, to make sure that the facility’s output is accelerated according to Tesla’s requirements. 

Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Tesla pleads with Trump White House not to bail on crucial climate standards

It suggested that abandoning the standards “would give a pass to engine and vehicle manufacturers for all measurement, control, and reporting of GHG emissions for any highway engine and vehicle.”

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President Donald J. Trump purchases a Tesla on the South Lawn, Tuesday, March 11, 2025. (Official White House Photo by Molly Riley)
Credit: Tesla

Tesla pleaded with the Trump White House not to bail on crucial climate standards that would help keep vehicle emissions in check, warning of human dangers related to greenhouse gases.

Tesla wrote that the Environmental Protection Agency’s (EPA) recent proposal to roll back standards for tailpipe emissions would be a major setback in the fight to limit damage to the climate.

It suggested that abandoning the standards “would give a pass to engine and vehicle manufacturers for all measurement, control, and reporting of GHG emissions for any highway engine and vehicle,” Reuters said in its report.

Trump has been a critic of environmental standards, and earlier this week, during a speech with the U.N., said that climate change was “the greatest con-job ever perpetrated on the world, in my opinion.”

Tesla’s tone on the potential rollback of climate standards was countered by that of General Motors, Toyota, Volkswagen, and “nearly all other major automakers,” who requested the EPA delay the emissions goals.

Tesla stands to gain a lot from the emissions push. Other automakers simply cannot compete with Tesla’s tech, charging infrastructure, or self-driving program, and they have a significant advantage as they started developing EV tech more than a decade ago.

Legacy automakers, on the other hand, have continued to develop EVs, but have not managed to manufacture anything of extreme interest to most car buyers.

Individually, they have not dented Tesla’s market share in the U.S., but collectively, because of more offerings and improvements to their lineups, they have managed to take some of Tesla’s sales away.

It’s taken all of them to truly compete with Tesla in the big picture. However, the other companies still need to rely on combustion engine vehicles, at least in the short term, to generate revenue.

Since these companies are not meeting emissions targets, they are required to pay Tesla for compliance credits, which the company generated $2.8 billion in revenue from last year.

GM to pay $145.8 million fee for excess emissions

Tesla said in its letter that the EPA’s consideration of rolling back standards is destructive to the innovation of the automotive industry:

“[It] undermines the stability of this program, diminishes the value of performance-based incentives that electric vehicle manufacturers accrue under the standards, and creates an uneven playing field – reducing the inducement for investment in vehicle innovation.”

With President Trump’s skepticism on the issue of vehicle emissions, things don’t look like they will go in Tesla’s favor with this particular request.

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Elon Musk trolls Tesla stock skeptics after 23 percent one month boost

“A lot of people thought Tesla stock would collapse as the tax credits came to an end this month,” Musk wrote. “Guess not.”

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Elon Musk spent some time trolling Tesla stock (NASDAQ: TSLA) skeptics following the company’s 23 percent boost over the past month.

Tesla’s rally on Wall Street over the past several weeks has completely erased any losses investors felt since the start of 2025. So far this year, shares have risen by over 13 percent.

Most of this has been evident over the past month, as the company has seen a nearly 25 percent increase in the past thirty days.

With the imminent abolishment of the $7,500 EV tax credit, some analysts and investors expected the stock to take a hit. It is no secret that the tax credit’s expiration will impact demand to some extent. In the short term, it has been strong for the company’s delivery outlook in Q3.

Musk trolled those who thought the stock would respond negatively to the tax credit going away:

The strength of Tesla shares over the past several weeks has prompted several analysts to adjust price targets and their firms’ overall outlook with the company’s automotive division, as well as its other projects.

Mizuho analysts pushed their price target from $375 to $450, mostly due to Tesla’s strength moving forward as a leader in the U.S. EV market.

Vijay Rakesh, managing director at the firm, wrote in a note to investors:

“We see TSLA maintaining key leadership in the U.S. BEV market despite some near-term challenges.”

Mizuho raises Tesla (TSLA) price target on stronger 2026 outlook

Some of this strength relies on the rollout of the lower-cost “Model 2,” which Tesla said it built the first production units of in its Q2 Earnings Shareholder Deck.

Goldman Sachs also increased its Tesla price target from $300 to $395, which is still below the current trading levels.

However, the firm is more bullish on the company’s humanoid robotics and autonomy projects:

“If Tesla can have [an] outsized share in areas such as humanoid robotics and autonomy, then there could be upside to our price target.”

Tesla shares are currently trading at $424.54 at the time of publication.

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Elon Musk’s xAI wins federal AI contract as Grok undercuts ChatGPT

The deal provides access to Grok at $0.42 per organization, because of course it’s $0.42.

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Credit: xAI

The U.S. General Services Administration (GSA) has finalized a major agreement with Elon Musk’s xAI, making its Grok artificial intelligence models available to government agencies nationwide. 

Announced on Thursday, the deal provides access to Grok at $0.42 per organization, one of the lowest pricing structures yet for AI services under GSA’s OneGov initiative. The contract runs until March 2027, marking the longest term for a OneGov AI agreement to date.

Low-cost access

The agreement covers both Grok 4 and Grok 4 Fast, xAI’s advanced reasoning models, and includes dedicated engineering support for agencies adopting the tools, the GSA stated in a press release. Federal offices will also be able to pursue upgrade paths to enterprise subscriptions aligned with FedRAMP and Department of Defense security standards.

To make adoption easier, xAI will deliver training programs and tailored enablement services, helping agencies integrate AI models into existing workflows securely. The GSA emphasized that the contract is designed to accelerate responsible AI use while standardizing pricing and avoiding duplicative procurement deals across the government.

Federal Acquisition Service Commissioner Josh Gruenbaum is optimistic about Grok’s use in the federal government. “Widespread access to advanced AI models is essential to building the efficient, accountable government that taxpayers deserve—and to fulfilling President Trump’s promise that America will win the global AI race. We value xAI for partnering with GSA—and dedicating engineers—to accelerate the adoption of Grok to transform government operations,” he stated.

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Expanding AI access

The Grok agreement is part of the broader OneGov Strategy, which was launched earlier this year to modernize federal technology acquisition. Under the initiative, agencies gain access to AI tools from leading providers at negotiated rates, ensuring consistent pricing and simplified procurement. Companies such as OpenAI, Anthropic, Google, and Meta have signed similar deals, but xAI’s contract is currently the longest in duration and lowest in cost. For context, OpenAI is charging government agencies $1 per year for ChatGPT, as noted in a Bloomberg News report.

Elon Musk, for his part, is grateful for the opportunity to use Grok in the federal government. “xAI has the most powerful AI compute and most capable AI models in the world. Thanks to President Trump and his administration, xAI’s frontier AI is now unlocked for every federal agency empowering the U.S. Government to innovate faster and accomplish its mission more effectively than ever before,” he said.

xAI cofounder Ross Nordeen also shared his thoughts about the matter. “‘Grok for Government’ will deliver transformational AI capabilities at $0.42 per agency for 18 months, with a dedicated engineering team ensuring mission success. We will work hand in glove with the entire government to not only deploy AI, but to deeply understand the needs of our government to make America the world leader in advanced use of AI,” he said.

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