Samsung will produce Tesla’s next-gen AI6 chips in Texas

Samsung has just scored a $16.5 billion deal to build Tesla’s next-generation AI chips. This eight-year contract is a massive shot in the arm for the South Korean tech giant’s contract chipmaking division. In fact, it’s the largest single-customer order in the history of Samsung’s chip business and equals a hefty 7.6 per cent of its 2024 revenue.

Samsung will produce Tesla’s next chips

Elon Musk even announced he will “walk the line personally” at Samsung’s new factory in Taylor, Texas, to accelerate progress. He noted that the plant is conveniently close to his home, according to a Bloomberg report. He also teased that the initial $16.5 billion figure represents “just the bare minimum” and that the final value could be several times higher.

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Moving on to the chip itself, this is the upcoming AI6, which is designed to be the new brain for Tesla’s both autonomous driving systems and the humanoid robot project. Musk also hopes the chip can power Tesla’s own data centres, which would give the company a path to reduce its dependency on GPUs from rivals like Nvidia.

Again, this partnership could signal something of a turnaround for Samsung’s foundry business. The company has been losing ground to TSMC, with its market share slipping to just 7.7 per cent earlier this year. Concerns were mounting over Samsung’s $40 billion Texas facility, with analysts worrying it might become a “big stranded asset” after its operational start was pushed to 2026.

It’s worth mentioning that Samsung currently builds Tesla’s AI4 chip, but Taiwan’s TSMC is already lined up to produce the AI5 later this year. Now with this development, the baton passes back to Samsung for the future AI6.