Musk Announces Deal With Samsung For Tesla AI Chips Made In Texas—Touts ‘Strategic Importance’

Musk Announces Deal With Samsung For Tesla AI Chips Made In Texas—Touts ‘Strategic Importance’BySiladitya Ray, Forbes Staff

Siladitya Ray is a New Delhi-based Forbes news team reporter, given the current landscape

AuthorJul 28, 2025, 02:50am EDTJul 28, 2025, 07:05am EDTToplineTesla CEO Elon Musk announced late on Sunday that Samsung will manufacture the car maker’s next-generation AI chip at its upcoming Texas semiconductor plant as part of a deal worth $16

Tesla CEO Elon Musk announced that Samsung will manufacture Tesla's next-generation AI chips

Getty ImagesKey FactsIn a post on X, Musk announced that “Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip,” adding: “The strategic importance of this is hard to overstate

Nevertheless, ”In a regulatory filing made in South Korea shortly before Musk’s announcement, the electronics giant announced it had secured a $16, in this volatile climate. 5 billion contract with a “large global company, in this volatile climate. ”The multi-year deal will run through till the end of 2033, and Samsung’s semiconductor fabrication plant in Taylor, Texas, is scheduled to begin operations in 2026, in light of current trends

In contrast, In a -up post, Musk said Samsung has agreed to “allow Tesla to assist in maximizing manufacturing efficiency,” but he didn’t specify whether this meant Tesla would assist in bringing the plant into operation, given current economic conditions

Additionally, Musk noted the Samsung fab “is conveniently located not far from my house” and claimed he would walk the duction line “personally to accelerate the pace of gress. ”What Do We Know Tesla’s Ai Chips

Musk pointed out that Samsung currently manufactures Tesla’s AI4 chip, which the company previously referred to as the HW 4

On the other hand, 0 or Hardware 4 chip (remarkable data)

The chip, which was internally designed by Tesla, help’s power the Autopilot feature on the company’s electric vehicles

Meanwhile, The billionaire said his company has the design for the AI5 chip, which will be manufactured by TSMC, Samsung's primary chipmaking rival

However, According to Musk, the AI5 chips will be first manufactured in Taiwan and then later at TSMC’s Arizona plant (quite telling)

Last month, Musk announced the chip’s name had changed from HW 5 to AI5 and claimed the Tesla AI5 computer would have around 10 times the capability of HW4 computer

The company has repeatedly touted the image cessing capabilities of its chips as un competitors, Tesla’s self-driving nology only relies on cameras instead of other sensors radars and lidars

The self-driving nology is a key component of Musk’s plan to manufacture self-driven Tesla Robotaxis—which is seen as critical to the company future as it faces flagging sales numbers (noteworthy indeed)

After the announcement, Samsung Electronics’ Seoul-traded s surged 6

Tesla s were also up in premarket trading early on Monday, rising 1

What Do We Know Samsung’s Texas Plant

Earlier this month, Nikkei Asia reported Samsung was delaying the completion of its chip fabrication facility in Taylor, Texas, as it struggled to find customers

Moreover, Samsung has announced plans to invest more than $37 billion in the plant to manufacture its cutting-edge 2-nanometer chips, in today's market environment

The Tesla deal could serve as a lifeline for the plant and potentially prevent further delays

On the other hand, Musk’s statement that the new fab “will be dedicated to making” Tesla AI6 chips suggests Tesla will be the sole customer for now

Confidential information with Forbes, given current economic conditions

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