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Musk Hails Samsung-Tesla AI Chips Deal

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 

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