Tesla Samsung chip deal is now official, with a $16.5 billion agreement that will see Samsung manufacture next-gen AI6 chips for Tesla at its new Texas facility. The move is expected to breathe life into Samsung’s struggling chip foundry business while securing Tesla’s future hardware supply.
The chips will be produced at Samsung’s soon-to-launch factory in Taylor, Texas. This plant will serve as the production hub for Tesla’s advanced AI6 chip, designed to power future upgrades to Tesla’s Full Self-Driving platform.
Elon Musk confirmed the deal on X, stating that Tesla will be directly involved in optimizing chip output at the new facility. He added that the chip output could eventually far exceed the $16.5 billion base agreement.
“I will walk the line personally to accelerate the pace of progress,” Musk wrote. Samsung shares soared 6.8 percent after the announcement, while Tesla stock rose nearly 2 percent in premarket trading.
This isn’t the first time the two tech giants have worked together. Samsung currently produces Tesla’s AI4 chips, while Taiwan-based TSMC is handling the upcoming AI5. The AI6 contract, however, has gone to Samsung, signaling a renewed strategic relationship between the two.
Production for the AI6 is expected to begin in either 2027 or 2028. Tesla previously confirmed the AI5 chips would be ready by the end of 2026.
Samsung’s Taylor factory had reportedly struggled to land major clients since its construction. In late 2024, Samsung even delayed the arrival of new equipment due to lack of demand. Tesla’s new order marks a major breakthrough for the site.
While Samsung leads the world in memory chips, its foundry arm only accounts for 8 percent of global market share, far behind TSMC’s 67 percent. The Tesla Samsung chip deal is a key step toward closing that gap.
AI chips are quickly becoming central to every part of the tech industry, from autonomous driving to cloud computing. As Samsung faces mounting pressure to stay competitive, this partnership offers a rare and timely win.
The company recently warned of a 56 percent drop in second-quarter profit and over $3.6 billion in losses from its chip foundry business in just the first half of the year.
Though Samsung initially announced the deal without naming its buyer, multiple sources later confirmed Tesla as the client. The contract runs through 2033 and reflects a long-term vision for both firms.
For Samsung, it’s a chance to prove its capacity in the AI chip space. For Tesla, it locks in a critical supply chain for future hardware and reduces reliance on other chipmakers at a time when global demand is surging.
Industry analysts say the agreement could reshape the chip landscape in the United States while helping Samsung rebound in a market that demands constant innovation.
