Elon Musk Dropped the Name of a Possible Chip Partner for Tesla Last Night

Key Takeaways

• Elon Musk said Tesla would need a "gigantic" semiconductor fabrication plant to support its AI ambitions and that he's considering working with Intel to make new chips.
• Such a deal would likely boost Intel's stock and sentiment around its trajectory. It could also buy some political goodwill for Tesla.

After a string of recent high-profile deals for Intel, could one with Tesla be next?

The question became inevitable after Tesla (TSLA) CEO Elon Musk told investors at the electric vehicle maker's shareholder meeting yesterday that the company, which has increasingly shifted its focus on AI and robotics, would need a "gigantic" semiconductor fabrication plant to support its AI ambitions and that he's considering working with Intel (INTC) to make new chips.

For Intel, a deal with Tesla would mark another big step in its turnaround plan, particularly if it came with commitments to its foundry manufacturing business, which has so far struggled to draw new clients. The chipmaker has also reportedly solicited business from Apple (AAPL).

Why This Matters for Intel Investors

A vote of confidence from Tesla in the form of a deal or partnership would likely boost Intel's stock and sentiment around its trajectory, particularly if it included commitments to Intel's foundry or manufacturing business central to maintaining its support from the U.S. government.

Shares of Intel climbed in early trading Friday following the news before paring back those gains. (Read our daily markets coverage here.) They were little changed recently, while Tesla shares were down about 4%. Intel declined to respond to Investopedia's questions about Musk's statement, while Tesla did not respond in time for publication.

The move could also buy some political goodwill for Tesla after a public spat between Elon Musk and President Donald Trump earlier this year. Some analysts suggest that companies may be see deals with Intel as opportunities to make inroads with the Trump administration.

Intel's stock has surged over 85% in 2025 so far, with most of that rise following a series of deals over the last few months—among them a partnership with AI chip leader Nvidia (NVDA), after Trump brokered an agreement giving the U.S. government a 10% stake in the chipmaker in August.

Several analysts have noted those deals have not come with foundry commitments yet, leading most to maintain neutral or bearish ratings. Not one of the analysts with current ratings collected by Visible Alpha recommends buying the stock.

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