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Tesla’s $16.5 Billion AI Chip Order Is Not What You Think It Is.
The company is playing catch-up and failing.
A few days ago, Musk proudly announced that Samsung’s mysterious $16.5 billion AI chip order was commissioned for Tesla and would be used to train their Full Self-Driving (FSD) AI. This self-important bragging might have impressed those deeply invested in the Tesla bubble, but for anyone actually paying attention, this was an admission of just how deranged Tesla’s self-driving push has become. It also proves that Musk isn’t doing anything to address the actual problems at Tesla. Let me explain.
This $16.5 billion deal is to supply AI-optimised chips to Tesla from 2026 to 2033. It doesn’t include construction costs, installation costs, energy costs, AI training costs, or maintenance costs — all of which are several times the cost of the chips themselves.What’s more, AI chips only have a lifespan of one to three years, given that these chips are pushed hard and often break under load.
So this means Tesla is actually planning on spending around $50 billion on AI over the next decade, or roughly $5 billion a year.
That is a gargantuan expenditure, but Tesla desperately needs it.
They have already spent well over $10 billion, possibly close to $20 billion…
