Samsung has signed a major $16.5 billion deal to produce AI chips for Tesla. Although Samsung didn’t mention Tesla by name in its official filing, Elon Musk confirmed the news on his platform, X.
According to Musk, Samsung will manufacture Tesla’s upcoming AI6 chips at a newly built facility in Texas. He underscored the significance of the agreement, calling it a critical step forward for both companies. “This is a major milestone,” Musk noted in his post.
While Samsung’s filing didn’t officially identify Tesla, it confirmed the agreement runs through 2033 and that the customer requested anonymity regarding specific terms.
Back in December, the U.S. government pledged $4.75 billion in support of Samsung’s chip operations in Texas. The investment was part of the Chips Act, a federal initiative aimed at boosting domestic chip production and reducing reliance on foreign suppliers. Gina Raimondo, the then-Secretary of Commerce, stated that the funding would help secure a consistent supply of chips critical to national security and AI.
Musk also mentioned that Tesla would be involved in improving the chip manufacturing process and that he personally plans to inspect the production line to help speed things up. He pointed out the Samsung site in Taylor, near Austin, is just a short drive from where he lives.
This partnership could breathe new life into a project that had been struggling. Samsung’s Taylor facility had previously faced challenges in attracting major clients. NH Investment and Securities senior analyst Ryu Young-ho noted that the site had little to no business activity until now, making this deal a turning point.
Alvin Nguyen, an analyst at the research firm Forrester, described the partnership as beneficial for both parties. “Samsung secures a valuable client and makes use of its U.S. production capabilities,” he said. “Tesla, in turn, gains a U.S.-based partner that can simplify their chip supply chain.”
Reports from last year indicated that Samsung had delayed chipmaking equipment orders from Dutch supplier ASML for the Taylor plant due to a lack of confirmed clients. The start of operations at the site had already been pushed to 2026.
Currently, Samsung is responsible for producing Tesla’s AI4 chips, which are used in its self-driving systems. Meanwhile, Taiwan’s TSMC is set to manufacture the AI5 chips, with production starting in Taiwan and eventually shifting to Arizona, according to Musk.
Samsung’s shares jumped 6.8%, while Tesla’s saw a 4.2% gain following the announcement. Such deals pave the way for other tech firms like D-Wave Quantum Inc. (NYSE: QBTS) to take a leaf and nurture similar collaborations in order to deepen their market penetration.
NOTE TO INVESTORS: The latest news and updates relating to D-Wave Quantum Inc. (NYSE: QBTS) are available in the company’s newsroom at https://ibn.fm/QBTS
About AINewsWire
AINewsWire (“AINW”) is a specialized communications platform with a focus on the latest advancements in artificial intelligence (“AI”), including the technologies, trends and trailblazers driving innovation forward. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, AINW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists, and the general public. By cutting through the overload of information in today’s market, AINW brings its clients unparalleled recognition and brand awareness.
AINW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from AINewsWire, text “AI” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit www.AINewsWire.com
Please see full terms of use and disclaimers on the AINewsWire website applicable to all content provided by AINW, wherever published or re-published: https://www.AINewsWire.com/Disclaimer
AINewsWire
Los Angeles, CA
www.AINewsWire.com
310.299.1717 Office
Editor@AINewsWire.com
AINewsWire is powered by IBN
SPAI Ventures is a wholly owned subsidiary of Safe Pro Group Inc., that was established…
As enthusiasm around AI continues to propel share prices to record levels, a growing number of investors…
GridAI Technologies provides exposure to the convergence of artificial intelligence, energy infrastructure modernization, and large-scale…
Recent announcement of a manufacturing expansion plan aimed at onboarding a larger, globally scaled manufacturing…
Few companies have benefited from the surge in AI as visibly as Nvidia. Since generative AI tools entered the mainstream…
Disseminated on behalf of SPARC AI Inc. (CSE: SPAI) (OTCQB: SPAIF) and may include paid…