Samsung Closes $16.5B Deal for Tesla’s AI Chip Production in Texas or Tesla and Samsung Partner Up: $16.5B AI Chip Manufacturing Deal Signed for Texas Facility
Samsung has secured a renewed partnership with a significant consumer technology company, valued at approximately $16.5 billion, for the production of advanced artificial intelligence (AI) chips intended for application in Tesla vehicles.
The agreement, initially detected within a regulatory finding on July 27, has since been confirmed by Elon Musk, CEO of Tesla, via his social media platform X. The specifics of the partnership were not disclosed at the time, but Musk subsequently announced that it pertained to Tesla’s automotive sector.
In a post on X, Musk expressed the strategic importance of this collaboration, stating that Samsung’s new Texas fabrication facility would be dedicated to manufacturing Tesla’s next-generation AI6 chip.
Samsung is currently constructing a plant in Texas, initially slated for completion in 2024; however, delays may extend the opening until 2026. Previous reports suggest that Samsung has been facing challenges in securing sufficient customer demand to justify the operation of this new facility.
Musk further confirmed that Tesla will participate in the optimization of production processes at Samsung’s Texas factory and has expressed his intention to personally oversee aspects of the fabrication line. The location is reportedly situated near Musk’s residence.
Currently, Samsung produces the A14 chip for Tesla, while TSMC holds the contract for the A15 chip. For the A16, Samsung will once again be involved in production. This extended agreement spans until 2033, suggesting that Samsung will likely continue manufacturing subsequent generations of chips beyond the A17.
In a post on X, Musk indicated that the $16.5 billion figure represents the minimum investment and that actual output is expected to exceed this amount.
Tesla’s self-driving vehicles made their debut in Austin, Texas last month, with limited trials featuring safety drivers as backup in case of emergencies. Over the weekend, Tesla confirmed that it has also initiated testing of its autonomous vehicles in the United Kingdom, with test sites in London and Swindon. The latter location presents a notable challenge for self-driving cars due to the inclusion of a difficult roundabout.
