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Tesla Sign 16B Dollars Agreement with Samsung: Tesla has finalized a $16.5 billion contract with Samsung to supply its next-generation AI chips. “Samsung’s massive new Texas plant will be primarily used to manufacture Tesla’s upcoming AI6 chips,” Elon Musk shared on X late Sunday. “The strategic significance of this development cannot be overstated.”
Introducing the AI6 Chip Architecture
The AI6, also referred to as Hardware 6, represents Tesla’s move toward a unified chip architecture capable of handling everything from its Full Self‑Driving (Supervised) driver assist suite and Optimus humanoid robots to intensive AI training within data centers.
Strengthening Collaborations: Samsung and TSMC Partnerships
Musk added that Tesla continues to collaborate with TSMC for its AI5 chip, which has recently completed its design process. Developed mainly for Full Self‑Driving, the AI5 will initially be fabricated at TSMC’s facility in Taiwan before production moves to its site in Arizona. According to Musk, Samsung is already responsible for manufacturing the AI4 chip.
This major agreement marks a significant win for Samsung, which has previously struggled to establish a foothold in chip production due to challenges in securing major partners. Musk mentioned in another update that Tesla’s total expenditure on Samsung chips could surpass $16.5 billion.
“Actual production may ultimately be several times greater,” he stated.
In a subsequent post, Musk revealed that Samsung is permitting Tesla to be directly involved in refining the manufacturing process to maximize efficiency.
“This is crucial, as I plan to personally oversee operations to speed up progress. The facility’s proximity to my home is also a notable advantage,” Musk wrote.
Tesla moved away from Nvidia’s Drive platform in 2019, launching its own custom chip—called the FSD Computer (FSDC) or Hardware 3—in all of its electric vehicles that year. Built by Samsung, the FSDC includes two identical systems mounted side by side on a single board, ensuring the redundancy required for automated driving technologies.
Since introducing its custom chips, Tesla has steadily broadened its focus in this area, reflecting its growing ambitions. These AI chips are now central to Tesla’s evolution from a traditional automaker into a leader in AI and robotics.
Frequently Asked Questions (FAQs) About Tesla Sign 16B Dollars Agreement with Samsung
What is the value of Tesla’s new chip manufacturing agreement with Samsung?
Tesla’s contract with Samsung is valued at approximately $16.5 billion, covering production of its next-generation AI6 chips at Samsung’s Texas plant.
What exactly is the AI6 (Hardware 6) chip?
The AI6, also called Hardware 6, is Tesla’s unified chip architecture designed to power Full Self‑Driving features, Optimus humanoid robots, and large‑scale AI training in data centers. Tesla Sign 16B Dollars Agreement with Samsung.
Why is Tesla still working with TSMC on AI5 chips?
Tesla’s AI5 chip, optimized for Full Self‑Driving, was designed in collaboration with TSMC. Initial production will take place at TSMC’s Taiwan facility before shifting to their Arizona site for scaled manufacturing. Tesla Sign 16B Dollars Agreement with Samsung.
How does this deal benefit Samsung?
Securing Tesla’s AI6 contract gives Samsung a high‑profile, multi‑billion‑dollar partner in advanced chip manufacturing, marking a major milestone in Samsung’s efforts to expand its foundry business. Tesla Sign 16B Dollars Agreement with Samsung.
What role does Elon Musk play in the Samsung partnership?
Musk plans to be directly involved in overseeing production refinements at Samsung’s new plant, leveraging its proximity to his residence to expedite ramp‑up and maximize manufacturing efficiency. Tesla Sign 16B Dollars Agreement with Samsung.
How does this agreement fit into Tesla’s broader chip strategy?
Since 2019, Tesla has moved from Nvidia’s Drive platform to its own FSD Computer (Hardware 3), built by Samsung. The AI6 deal represents Tesla’s continued push to control chip design and manufacturing as it transforms into an AI and robotics leader. Tesla Sign 16B Dollars Agreement with Samsung.
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