Episode summary
Dylan Jovine | Tesla’s AI5 Chip Breakthrough Could Reshape the Market
Summary
Dylan Jovine argues that Tesla is being misread as only an EV, rocket, or software story, when a major part of its future may come from semiconductors. He says Tesla is already one of the top seven clients of Taiwan Semiconductor Manufacturing (TSMC), and that Tesla designs chips but relies on TSMC to manufacture them.
The centerpiece of the discussion is Tesla’s new AI5 chip. Jovine says Elon Musk recently said Tesla expects to build chips at higher volumes than all other AI chips combined, and he notes that Tesla shares rose 8% after Musk said the chip had been taped out. He frames AI5 as central to full self-driving, robotaxis, and Optimus robots, which he says are tied to Musk’s compensation package.
Jovine’s broader pitch is that this chip effort creates an overlooked investment opportunity in a supplier he says is positioned to benefit from Tesla’s plans. He says that company built a factory next to the site where the chip will be made in America, and that its CEO recently bought more stock.
Key takeaways
- Jovine says Tesla is one of the top seven clients of TSMC, which he calls the backbone of global chip manufacturing.
- He says Tesla’s AI5 chip is central to full self-driving, robotaxis, and Optimus robots, making it strategically important to the stock.
- Jovine cites Elon Musk’s claim that Tesla expects to build chips at higher volumes than all other AI chips combined.
- He says Tesla shares rose 8% after Musk said the AI5 chip had been taped out.
- Jovine argues a small supplier tied to the AI5 buildout could be a hidden winner, and says its CEO recently bought more shares.
Notable quotes
“Tesla is actually one of the top seven clients of TSMC, Taiwan Semiconductor Manufacturing”
“We expect to build chips at higher volumes, ultimately, than all other AI chips combined”
“this new AI 5 chip is actually central foundational to the full self-driving and to their robot strategy”
“Tesla shares rose 8% as a result”
“We think they are very well positioned, so well positioned that the CEO of this company just bought a bunch more stock”
How the episode opens
Good morning. This is Dylan Jovineaux behind the market. Happy Friday.
Today is Friday, April 17th. And I'll tell you something, in my business, most of our time is spent trying to find opportunities that nobody else is talking about. That's how you find undiscovered stocks or the things before the rest of the crowd.
And you know, it's funny, I push my team to always find stories. We need to find research, do research that is so far ahead of everybody else that no one's even touching it. We have a story that presents a massive opportunity that I wanted to talk to you about.
See, this is way under the radar and you know, really I feel like there's only a handful of people who really know about this. Most people think of Tesla, they think of electric vehicles. Most people think of Elon Musk or SpaceX.
They think of rockets. They think of an XAI. But when you think of Tesla, you think of EVs, you might think of credits, but you don't think of Tesla as a semiconductor company.
Very few people do. Nobody even talks about Tesla as a semiconductor company. Well, get this.
Tesla is actually one of the top seven clients of TSMC, Taiwan Semiconductor Manufacturing. Taiwan Semi is the company that everybody uses to make their chips. Firms like Nvidia or AMD or Tesla, they design chips.
They don't manufacture them. They send them to Taiwan Semiconductor and Taiwan Semiconductor actually manufactures the chips. Okay, then they send them to another company to do other things like testing, etc., before it goes into the public.
So, Tesla is putting out millions, has millions of its own chips in all of its products. In Tesla products, full self-driving, it's based on its own chips.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tesla ai chips
- semiconductor supply chain
- tsmc manufacturing
- autonomous driving valuation
- humanoid robots
Companies and tickers mentioned
- TSLA
- TSM
- Tesla
- Taiwan Semiconductor
- SpaceX
Watch the episode
Watch “Dylan Jovine | Tesla’s AI5 Chip Breakthrough Could Reshape the Market” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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