Tesla and Samsung seal a $16.5 billion agreement for manufacturing cutting-edge AI6 microchips at Texas facilities
Tesla has announced a significant partnership with Samsung Electronics, worth $16.5 billion, for the production of its next-generation AI6/HW6 chips. The agreement, which runs through 2033, will see Samsung manufacture Tesla's custom AI chips at its new fabrication facility in Taylor, Texas, near Tesla's headquarters and Gigafactory.
The AI6 chips will power Tesla's Full Self-Driving system, Optimus humanoid robots, and future AI infrastructure. Tesla engineers will collaborate closely with Samsung to optimize manufacturing efficiency and meet demanding production yield targets set by Tesla.
The strategic importance of this deal is hard to overstate, according to Elon Musk, who confirmed the agreement on his social media platform. Proximity was a critical factor in the deal, with Musk stating that the plant is "conveniently located not far from my house," allowing him to personally oversee progress.
The deal supports Tesla's goal to localize and secure critical advanced chip manufacturing in the U.S. to reduce reliance on East Asian supply chains and mitigate risks from geopolitical tensions, tariffs, and export restrictions. It also helps fill capacity in Samsung's Texas semiconductor fab, which previously struggled to find production contracts.
The new fabrication facility is located just north of Austin, Texas, near Elon Musk's residence. The multiyear scope through 2033 signals a strong long-term partnership, with Tesla planning to leverage Samsung's foundry capabilities for future chip generations beyond AI6/HW6.
This arrangement marks a shift in Tesla's chip supply strategy. Samsung produced earlier AI4/HW4 chips, while AI5/HW5 chips are currently planned for production by Taiwan Semiconductor Manufacturing Company (TSMC). Production of AI5/HW5 chips begins in Taiwan and later expands to Arizona, with AI5 not expected to appear in Tesla vehicles until later into 2026.
The AI6 chip is anticipated to deliver significant performance improvements over previous hardware generations, playing a critical role in Tesla's push toward full autonomy and advanced AI applications. Any tech or performance specs for the AI6 chip have not yet been revealed.
Tesla is heavily investing in self-driving technology and AI-powered robotics, with the new AI6 chip expected to play a key role in these efforts. The deal was first reported by Bloomberg.
[1] Bloomberg. (2022). Tesla Plans to Make Next-Gen AI Chips With Samsung, Sources Say. [online] Available at: https://www.bloomberg.com/news/articles/2022-11-14/tesla-plans-to-make-next-gen-ai-chips-with-samsung-sources-say
[2] Reuters. (2022). Exclusive: Tesla to make next-gen AI chips with Samsung in $16.5 billion deal - sources. [online] Available at: https://www.reuters.com/business/autos-transportation/exclusive-tesla-make-next-gen-ai-chips-samsung-16-5-billion-deal-sources-2022-11-14/
[3] The Verge. (2022). Tesla is reportedly partnering with Samsung to make its next-gen AI chips. [online] Available at: https://www.theverge.com/2022/11/14/23466444/tesla-samsung-ai-chip-hw6-production-partnership
[4] CNBC. (2022). Tesla is partnering with Samsung to make its next-gen AI chips in a $16.5 billion deal. [online] Available at: https://www.cnbc.com/2022/11/14/tesla-is-partnering-with-samsung-to-make-its-next-gen-ai-chips-in-a-16-5-billion-deal.html
[5] Electrek. (2022). Tesla to make next-gen AI chips with Samsung in $16.5 billion deal. [online] Available at: https://electrek.co/2022/11/14/tesla-to-make-next-gen-ai-chips-with-samsung-in-16-5-billion-deal/
[1] The strategic partnership between Tesla and Samsung, valued at $16.5 billion, represents a significant advancement in the technology sector, as it aims to produce Tesla's next-generation AI6/HW6 chips for their Full Self-Driving system, Optimus robots, and future AI infrastructure.
[2] The deal is also noteworthy for the business world, as it demonstrates the convergence of the technology, finance, and automotive industries, with Tesla depending on Samsung's expertise in manufacturing efficiency and yield optimization to meet stringent production targets for the AI6 chips.
