Tesla and Samsung Sign $16.5 Billion AI Chip Deal to Power Next-Gen Technology
Tesla and Samsung have revealed a huge $16.5 billion deal for semiconductors to help make Tesla’s future AI chips. Elon Musk said on X that Samsung’s advanced semiconductor factory in Texas will make Tesla’s next-generation AI6 chips.
Tesla and Samsung Long-Term Deal Launches Major AI Collaboration
Samsung Electronics told the government about the deal in a filing. The agreement will last from July 26, 2025, until December 31, 2033. At first, Samsung didn’t mention Tesla because it wanted to preserve its trade secrets. But Musk later announced the cooperation, putting an end to the rumors.
Musk wrote, “This fab will be all about Tesla’s AI6 chip.” He stressed how important the collaboration was and promised to “personally walk the line” to speed things up. Musk also said that the deal’s final value might be more than the $16.5 billion that has been reported.
Samsung Aims to Challenge TSMC in AI Chip Market
This acquisition is a big step forward for both companies. Samsung already makes Tesla’s AI4 chips. Now, it will go up against TSMC, which makes Tesla’s AI5 series.
The new partnership makes Tesla’s multi-vendor chip strategy stronger and helps Samsung catch up in the global semiconductor race. Samsung didn’t reveal many information because of legal issues, but it did say that the contract might potentially modify or expire early..
Still, the market reacted positively. Samsung’s shares surged more than 6%, hitting their highest level since September 2024.
Samsung Bets on the Future of AI Chips
The deal comes as Samsung works even harder to take over the AI semiconductor market. The company wants to start making a lot more 2-nanometer chips and get more big customers.
But there are still problems. Samsung is behind in making high-bandwidth memory (HBM) chips. SK Hynix, a significant supplier to Nvidia and a competitor, is the leader in the HBM market. Samsung’s newest version of HBM is also running behind schedule and may not be available until after September.
This Thursday, Samsung will announce its earnings for the second quarter. Analysts say that profits will fall sharply because the foundry sector is growing slowly and AI chips are not being used as much.
