Samsung Scores Massive $16.5 Billion AI Chip Deal With Elon Musk's Tesla
Elon Musk confirmed on X that Tesla is the "large global company" that Samsung referenced in a new regulatory filing that outlines financial details of a major semiconductor manufacturing agreement valued at over $16.5 billion. According to Musk, Samsung's new fab site in Taylor, Texas will supply next-generation AI6 chips for Tesla's electric vehicles.
According to the filing, the multi-year chip deal effectively began on July 26, 2025 and runs through December 31, 2033. It's a huge win for Samsung, which already supplies AI4 chips manufactured on a 7-nanometer node for Tesla's Full Self-Driving platform.
Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate.
— Elon Musk (@elonmusk) July 28, 2025
Samsung currently makes AI4.
TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona.
Musk notes in an X post that Samsung rival TSMC just finished the design of its AI5 chips, which will initially be manufactured in Taiwan and then in Arizona. TSMC is the global leader in semiconductor manufacturing with several big-name clients, including AMD, Apple, MediaTek, Qualcomm, and others.
As to why Musk chose Samsung over TSMC for its AI6 chips, he alluded to a willingness on Samsung's part to let Tesla have more input on how the chips are manufactured. It also helped Musk lives in relative close proximity to Samsung's Texas fab.
"Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency.
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," Musk stated on X.
It's not clear what other factors might have been involved. Regardless, it's a big deal for Samsung. According to the regulatory filing published today, the contract-to-revenue ratio of the deal with Tesla is at 7.6%.
It could be even higher when all is said and done. In a follow-up post on X, Musk stated that the $16.5 billion number "is just a bare minimum" and that "actual output is likely to be several times higher."
News of the deal comes just ahead of Samsung's second-quarter earnings report, which it will release later this week. In a presentation (PDF) related to its most recent earnings report, Samsung highlighted weak earnings for its Foundry business due to sluggish seasonal mobile demand, inventory adjustments, and stagnant fab utilization.
Shares of Samsung are up nearly 7% following news the deal.
Top Image Source: Samsung Media Library
