Tesla signs $16.5 billion Samsung to create AI chips

Tesla has signed a $16.5 billion deal to get the next-generation chips from Samsung.

“Samsung’s huge new Texas Fab will be dedicated to creating Tesla’s next-generation AI6 chip,” says Elon Musk Posted X late Sunday night. “The strategic importance of this is difficult to exaggerate.”

Tesla’s AI6 (aka Hardware 6) chip is based on betting on an all-in-one chip design, from powering a driver assistance system known as fully autonomous driving (supervisor), to Tesla’s Optimus Humanoid robots to high-speed AI training in the data center.

Musk said Tesla is working with TSMC to manufacture AI5 chips. A15, a generation built primarily for FSD. It was originally built at TSMC’s Taiwan factory and then at a facility in Arizona. According to Musk, Samsung already manufactures A14 chips.

The deal is a boost for Samsung, who struggled to pull their chip manufacturing projects off the ground after failing to attract and maintain key clients. Musk said in another post that Tesla could end up spending more than $16.5 billion on Samsung Chips.

“The actual output is likely several times higher,” he said.

In a later post, Musk said Samsung agreed to allow Tesla to help maximize manufacturing efficiency.

“This is an important point. I personally walk along the line to accelerate the pace of progress, and the fab is convenient because it’s not too far from my home,” Musk wrote.