Tesla shareholders have approved a record-breaking compensation package for CEO Elon Musk that could be worth up to $1 trillion in company stock — provided Tesla meets a series of ambitious production and financial milestones over the next decade.
Alongside this landmark decision, Musk revealed Tesla’s plans to build a massive AI chip “Gigafactory”, which he described as the cornerstone of the company’s next technological revolution.
Shareholders back Musk’s long-term vision
More than 75% of shareholders voted in favor of the new package, a clear show of confidence in Musk’s leadership and long-term vision for Tesla. Surrounded by Optimus robots during the announcement, Musk declared that Tesla was “not just opening a new chapter, but writing an entirely new book.”
Unlike most corporate leaders, Musk does not receive a fixed salary. His earnings depend entirely on Tesla’s market and performance metrics. The new plan divides the reward into 12 tranches, each tied to specific profit, margin, and capitalization goals.
To unlock the full $1 trillion, Tesla’s market capitalization must rise from $1.5 trillion to $8.5 trillion within the next ten years.
This approval comes after a Delaware court earlier nullified Musk’s previous $56 billion plan, citing a lack of transparency in the approval process. The new deal is seen by analysts as both a vote of renewed trust and a step toward consolidating Musk’s influence within the company.
Currently holding around 15% of Tesla’s shares, Musk has openly stated his intention to increase his stake to 25% to maintain strategic independence.
Tesla’s AI “Terafactory” and potential Intel partnership
At the same event, Musk announced plans for a Tesla “Terafactory”, dedicated to manufacturing in-house AI chips. He emphasized that even with suppliers like TSMC and Samsung operating at full capacity, global chip production would remain insufficient to meet Tesla’s needs.
He also hinted at a possible collaboration with Intel, saying that while “no deal has been signed yet, it’s worth discussing the details.”
According to Musk, the upcoming plant will be capable of producing at least 100,000 semiconductor wafers per month, focusing on next-generation energy-efficient AI chips that consume three times less power than Nvidia’s flagship Blackwell processors.
Next-gen AI processors: Tesla AI5 and AI6
Musk confirmed that Tesla is developing its fifth-generation AI chip, known as AI5, which is expected to enter mass production by 2027. The following iteration, AI6, is projected to double performance by mid-2028.
These chips will serve as the backbone for Tesla’s autonomous driving systems and future innovations in robotics and artificial intelligence.
“We’re not just building cars,” Musk said. “We’re building the factory of the future — an ecosystem of intelligent machines that learn, think, and work together. To make that real, we need our own chips, our own energy, and our own production.”
