Friday, August 1, 2025

Elon Musk Confirms Tesla’s $16.5 Billion Chip Deal with Samsung Electronics

Samsung Electronics has officially entered into a semiconductor supply contract worth $16.5 billion with Tesla, according to a regulatory filing by the South Korean tech giant and subsequent confirmation by Tesla CEO Elon Musk.

While Samsung initially withheld the name of its client to preserve business confidentiality, Musk later confirmed on social media platform X that Tesla is the counterparty. He revealed that Samsung’s new semiconductor fabrication plant in Texas will be dedicated to producing Tesla’s next-generation AI6 chip.

“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona,” Musk posted.

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The filing states that the agreement became effective on July 26, 2025, with the contract running through December 31, 2033. Samsung emphasized that details, including the customer’s identity, would remain undisclosed until the contract concludes, citing a request to protect trade secrets.

Despite this, Musk also noted that the collaboration would involve close cooperation on operational efficiency.

“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress,” he added on X.

Musk hinted that the scope of the agreement could exceed the announced $16.5 billion, underscoring the strategic importance of the collaboration in advancing Tesla’s AI chip development roadmap.

Samsung issued a caution to investors in its filing, stating: “Since the main contents of the contract have not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully considering the possibility of changes or termination of the contract.”

This deal strengthens the ongoing shift toward advanced AI-driven computing in the automotive industry, highlighting the crucial role of custom semiconductor design and production in Tesla’s next-generation electric vehicles and autonomous systems.

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