Elon Musk's Tesla taps Samsung in $16.5B AI chip deal—A game-changer that could rewrite the future of driving; details here
AI6 chips to power Tesla's autonomous tech and robotics
The AI6 chips will be developed to support Tesla's upcoming hardware platforms, including its next-gen Full Self-Driving (FSD) systems, the Optimus humanoid robot, and AI infrastructure like the Dojo supercomputer. Currently, Tesla uses the AI4 chip in its Hardware 4 vehicles. An intermediate AI5 chip, produced by Taiwan-based TSMC, is expected to bridge the gap before AI6 is fully rolled out. Elon Musk also noted that TSMC will begin producing AI5 chips in the United States at its Arizona facility, shifting some of the production away from Taiwan.
Samsung's Texas fab to focus solely on Tesla chips
According to Musk's posts on X, Samsung's Texas fab will be dedicated exclusively to manufacturing Tesla's AI6 chips. 'The strategic importance of this is hard to overstate,' Musk said, adding that Samsung agreed to Tesla playing an active role in maximizing manufacturing efficiency. Musk mentioned he would be directly involved, even 'walking the line personally' at the fab to accelerate progress. He also pointed out that the facility's proximity to his home makes close involvement more feasible.
Samsung's foundry business gets a major boost
Samsung had earlier announced a major contract for chip manufacturing with a global client without naming Tesla, citing business confidentiality. The deal, worth $16.5 billion, accounts for 7.6% of the company's 2024 revenue. The partnership comes at a crucial time for the South Korean company, which has been under pressure in the competitive AI chip space. Despite being the global leader in memory chips, Samsung's foundry division has struggled to retain major clients, many of whom prefer TSMC for advanced chip production. TSMC's client list includes key industry players like Apple, Nvidia, and Qualcomm.
Musk expects output to exceed deal value
Musk emphasized that the $16.5 billion figure is only a baseline. 'The $16.5B number is just the bare minimum. Actual output is likely to be several times higher,' he posted. This suggests Tesla expects demand for AI6-powered systems to grow significantly, which would require ramping up chip production well beyond the initial contract estimate.
This partnership highlights Tesla's long-term strategy to localize chip manufacturing within the United States and reduce reliance on overseas production. It also strengthens Samsung's position in the U.S. semiconductor market, especially as it looks to compete with TSMC and SK Hynix in advanced chip technologies.
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