Tesla Samsung Seal USD 16.5 Billion Chip Deal For AI6 Production At Texas Plant

Tesla, the US-based electric car maker, has signed a USD 16.5 billion deal with Samsung Electronics to source the AI6 chipset. Elon Musk himself confirmed the deal via X post, stating that Samsung's Texas fabrication plant will be dedicated to producing the chipset. Reports also suggest that, as confirmation of the Tesla-Samsung deal came to the public eye, the share prices of the electronics manufacturer skyrocketed by 6.8 percent, which is the highest that the brand has received since September 2024.

Elon Musk shared a thread on X (formerly known as Twitter), stating, "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. And the fab is conveniently located not far from my house."

Replying to the same post, Musk also confirmed that Samsung will dedicate its Texas fabrication plant to work on manufacturing the AI16 chipset. However, it is not the first time that Samsung has joined hands with Tesla. Currently, Jay Y Lee's electronics manufacturing company is making AI4 chips that help Tesla cars to support driver assistance software, enabling the self-driving mode.

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.

— Elon Musk (@elonmusk) July 28, 2025

While the AI4 and AI6 chipsets are on Samsung's list, the AI5 chips are manufactured by Taiwan Semiconductor Manufacturing Company. The deal announcement has come at a crucial time and proves to be beneficial for Samsung, as the brand recorded losses in the contract chipmaking trade. However, the AI6 chipset's production timeline has not yet been confirmed by Tesla or Samsung.