As a naive example, if in a CPU you are doing some specific 3-step algorithm which would normally require 3 clock cycles, you can instead bake that algorithm into a circuit along with the memory it needs that will run in 1 cycle. In Elon's terminology, the CPU has to "emulate" what the baked-in circuit simply is.

But from the sounds of it this chip goes beyond that. It sounds like some kind of RAM/GPU hybrid with matrix-specific instructions specifically targeting NN inference for Tesla's specific style of NNs, which as a first guess I take to mean "lots and lots of layers."

In the call they mentioned increasing their investment in the chip team and technology, which is a sign that they're confident it's going to pay off.