Tesla Shares Rise as AI5 Chip Hits Production Milestone

Tesla shares rose nearly 8% on Wednesday after CEO Elon Musk announced that the company's AI5 inference chip has reached the tapeout stage. This milestone marks the transition from design to fabrication and occurred 45 days ahead of the original schedule. The AI5 chip will be produced by TSMC and Samsung Electronics, while Tesla continues to design an AI6 chip and a Dojo3 chip for AI supercomputing.

To decrease reliance on third-party suppliers, Tesla is partnering with Space Exploration Technologies Corp. to build two advanced chip factories in Austin, Texas, a project recently joined by Intel. These developments coincided with a UBS rating upgrade from sell to hold, following reports that Tesla is developing a new, smaller SUV.

The announcement also boosted Chinese suppliers. Shares of Shanghai Beite Technology rose as much as 4.6%, while Ningbo Tuopu Group and Zhejiang Sanhua Intelligent Controls saw increases of up to 4.3% and 3.4%, respectively. Both Ningbo Tuopu Group and Zhejiang Sanhua Intelligent Controls are reportedly attempting to expand their partnerships with Tesla by pivoting from electric vehicle parts to robotics components.