Samsung and Tesla Announce $16.5 Billion AI Chip Partnership
ByAinvest
Monday, Aug 4, 2025 9:16 am ET1min read
RACE--
Samsung Electronics Co. has signed a $16.5 billion agreement with Tesla Inc. to manufacture AI chips at a new fabrication plant in Texas. This partnership marks one of the largest semiconductor deals in recent history and aligns with recent U.S. government initiatives to bolster domestic semiconductor manufacturing capabilities [1].
The agreement, announced by Tesla CEO Elon Musk on X, involves the production of an advanced AI chip, the AI6, which will power Tesla's next-gen autonomous systems, including its upcoming robotaxi fleet and Optimus humanoid bot [1]. Samsung is currently constructing a $17 billion fab in Taylor, Texas, which is expected to start producing chips in small volumes by the second half of 2027 [2].
The AI6 chip will be preceded by the AI5, which is set to enter mass production next year. The AI5 will be manufactured by Taiwan Semiconductor Manufacturing Co. using an unspecified manufacturing node. The AI6, however, is expected to leverage Samsung's 2-nanometer node, significantly more advanced than the 7-nanometer node currently used for the AI4 chips [2].
Elon Musk emphasized the importance of this deal for Tesla's autonomous vehicle technology ambitions. He noted that the partnership will provide valuable foundry experience and potentially accelerate the pace of progress in manufacturing efficiency [1]. The deal also validates Samsung's strategy to establish a significant manufacturing footprint in the United States, which is critical given the ongoing efforts to reduce reliance on foreign semiconductor production [2].
This partnership underscores the growing importance of AI and autonomous vehicle technology in the global economy. Cathie Wood, CEO of ARK Invest, has described Tesla as "the largest AI project on earth," predicting that its autonomous vehicle efforts could generate trillions in revenue within the next 5-10 years [1]. While Tesla's second-quarter revenue dropped 12% year-over-year, analysts remain optimistic about the company's long-term AI bets [1].
References:
[1] https://www.benzinga.com/markets/tech/25/08/46819258/elon-musk-agrees-with-cathie-wood-tesla-is-largest-ai-project-on-earth-amid-robotaxi-vision-samsung-chip-deal-buzz
[2] https://siliconangle.com/2025/07/28/tesla-signs-16-5b-chip-manufacturing-contract-samsung/
TSLA--
Samsung has secured a $16.5bn agreement with Tesla to manufacture AI chips at a new fabrication plant in Texas. The deal marks one of the largest semiconductor partnerships today and aligns with recent US government initiatives to enhance domestic semiconductor manufacturing capabilities. Tesla's CEO Elon Musk highlighted the deal's value for the company's autonomous vehicle technology ambitions. The partnership also validates Samsung's strategy to establish a significant manufacturing footprint in the US.
Title: Samsung Secures $16.5 Billion Contract with Tesla to Manufacture AI ChipsSamsung Electronics Co. has signed a $16.5 billion agreement with Tesla Inc. to manufacture AI chips at a new fabrication plant in Texas. This partnership marks one of the largest semiconductor deals in recent history and aligns with recent U.S. government initiatives to bolster domestic semiconductor manufacturing capabilities [1].
The agreement, announced by Tesla CEO Elon Musk on X, involves the production of an advanced AI chip, the AI6, which will power Tesla's next-gen autonomous systems, including its upcoming robotaxi fleet and Optimus humanoid bot [1]. Samsung is currently constructing a $17 billion fab in Taylor, Texas, which is expected to start producing chips in small volumes by the second half of 2027 [2].
The AI6 chip will be preceded by the AI5, which is set to enter mass production next year. The AI5 will be manufactured by Taiwan Semiconductor Manufacturing Co. using an unspecified manufacturing node. The AI6, however, is expected to leverage Samsung's 2-nanometer node, significantly more advanced than the 7-nanometer node currently used for the AI4 chips [2].
Elon Musk emphasized the importance of this deal for Tesla's autonomous vehicle technology ambitions. He noted that the partnership will provide valuable foundry experience and potentially accelerate the pace of progress in manufacturing efficiency [1]. The deal also validates Samsung's strategy to establish a significant manufacturing footprint in the United States, which is critical given the ongoing efforts to reduce reliance on foreign semiconductor production [2].
This partnership underscores the growing importance of AI and autonomous vehicle technology in the global economy. Cathie Wood, CEO of ARK Invest, has described Tesla as "the largest AI project on earth," predicting that its autonomous vehicle efforts could generate trillions in revenue within the next 5-10 years [1]. While Tesla's second-quarter revenue dropped 12% year-over-year, analysts remain optimistic about the company's long-term AI bets [1].
References:
[1] https://www.benzinga.com/markets/tech/25/08/46819258/elon-musk-agrees-with-cathie-wood-tesla-is-largest-ai-project-on-earth-amid-robotaxi-vision-samsung-chip-deal-buzz
[2] https://siliconangle.com/2025/07/28/tesla-signs-16-5b-chip-manufacturing-contract-samsung/
Stay ahead of the market.
Get curated U.S. market news, insights and key dates delivered to your inbox.
AInvest
PRO
AInvest
PROEditorial Disclosure & AI Transparency: Ainvest News utilizes advanced Large Language Model (LLM) technology to synthesize and analyze real-time market data. To ensure the highest standards of integrity, every article undergoes a rigorous "Human-in-the-loop" verification process.
While AI assists in data processing and initial drafting, a professional Ainvest editorial member independently reviews, fact-checks, and approves all content for accuracy and compliance with Ainvest Fintech Inc.’s editorial standards. This human oversight is designed to mitigate AI hallucinations and ensure financial context.
Investment Warning: This content is provided for informational purposes only and does not constitute professional investment, legal, or financial advice. Markets involve inherent risks. Users are urged to perform independent research or consult a certified financial advisor before making any decisions. Ainvest Fintech Inc. disclaims all liability for actions taken based on this information. Found an error?Report an Issue
Comments
No comments yet