Elon Musk’s Tesla Announces Record $16.5 Billion Deal With Samsung for Self-Driving Chips

Elon Musk has announced that Tesla has entered into a $16.5 billion deal with Samsung Electronics to develop its next-generation AI6 processors for self-driving cars. This multi-year agreement was announced recently by Samsung without revealing Tesla’s name, but Musk confirmed the partnership in a post on X (formerly Twitter), saying “the strategic importance of this is hard to overstate.”

As part of the deal, Samsung will manufacture an AI6 custom silicon platform, which will likely be the foundation for Tesla’s upcoming vehicles, at its new fabrication facility in Texas. According to Musk, Samsung “agreed to allow Tesla to assist in maximising manufacturing efficiency,” but he did not elaborate on how that would happen. Samsung already makes Tesla’s AI4 chip at its fab facility, but whether the production lines will be readjusted to accommodate the manufacturing of the AI6 chip is unclear.

“This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house,” he added. “The $16.5B number is just the bare minimum. Actual output is likely to be several times higher,” he said in another post on X.

Much like Samsung, TSMC will also contribute to Musk’s vision of diversifying supply chains for self-driving chips. Musk said the Taiwanese giant has finished designing the AI5 chip initially in Taiwan and then in Arizona in the US. These chips are expected to undergo production at the end of 2026, suggesting the AI6 chip will follow. However, Musk has not specified a timeline for the production of AI6.

Its deal with Tesla will help Samsung capture more of the global foundry market. The South Korean company currently holds just 8 per cent of the market, trailing behind TSMC, which holds a 67 per cent share.

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