Tesla and Samsung reach $16.5 billion AI chip deal

Tesla has signed a multi-year, $16.5 billion deal with Samsung . CEO Elon Musk confirmed that the Korean company will manufacture AI6 chips for its electric vehicles at its new factory in Texas.

Samsung to replace TSMC

According to information published on the Korean authority's website (and later also on Samsung 's website ), the contract was signed on July 24, 2025, with a " major global company " for the " contract manufacturing of semiconductors ." The contract expires on December 31, 2033. The deal is valued at 22.76 trillion won, or approximately $16.5 billion .

Elon Musk revealed in a post on X that Tesla is the largest global company. The CEO announced that the upcoming AI6 chip will be produced in a new factory in Texas. Samsung produces the current AI4 chip, while TSMC will produce the AI5 chip in Taiwan and Arizona.

Musk also added that Samsung will allow Tesla to provide assistance to maximize production efficiency. The CEO will be able to directly monitor production, as the factory is close to his home. Samsung had postponed the completion of construction of the plant (located in the town of Taylor) until 2026 due to a lack of customers. The agreement signed with Tesla could now accelerate construction, for which the Korean company has received a subsidy from the U.S. government.

The contract will allow Samsung to increase its market share ( currently 7.7%). TSMC , however, remains untouchable with its 67.6% share, achieved thanks to agreements with Apple, NVIDIA, and Qualcomm. South Korea could benefit from the partnership during tariff negotiations (the tariff rate set for August 1st is 25%).