AI Chip Deal between Samsung and Tesla

Published: 28 Jul 2025

Author: Precedence Research

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Leading tech giants Samsung and Tesla have signed a $16.5 billion chip supply agreement today, marking a new realm of integration between the semiconductor and autonomous driving industries. Elon Musk, the renowned owner of Tesla, confirms the news. This multilayer and highly ambitious program includes the production of next-generation AI6 chips, which Samsung will manufacture at its new facility in Texas, which has production set to operate through 2033. 

About this move, Elon Musk stated, “This Texas Fab will be dedicated to Tesla’s AI6 chips, emphasizing the strategic importance of the project. The impact on our full self-driving program and Artificial Intelligence infrastructure is hard to overstate.” 

This deal is marked as one of the largest chip supply agreements in the market to date, and it will offer significant momentum and a boost to Samsung's struggling foundry business, which Samsung itself confirmed by posting operating losses of nearly 5 trillion in the first half of the current year, 2025. Therefore, it can be no exaggeration to state that Samsung will be the biggest rival to TSMC, and its dominance in the global semiconductor market will enable it to offer cutting-edge AI and automotive chips. It also gives momentum and a sense of urgency to Samsung’s delayed plan for a manufacturing plant in Texas, which was initiated in 2021. Hence, this deal is a strategic win for both companies. 

Despite the disclosed architecture of the AI6 chips, industry analysts expect them to be a center of attraction for Tesla’s FSD v13 platform, while also propelling advancements in AI computing and strategies. However, a contradictory view also speculated that chips are not expected to be built by Samsung’s bleeding-edge 2nm node owing to its yield limitations. Therefore, Tesla may go for a mature process node with higher stability and 
output. 

As soon as the news was confirmed, Samsung shares rose nearly 4% on Monday morning, showcasing investor confidence and the stability of the contract's long-term revenue-generating effects. This deal could further solidify and strengthen the bond between semiconductor manufacturers and automakers, which will revolutionize future market calculations. On a geopolitical level, this partnership also aligns with market trends, as South Korea and the United States are strengthening their technology partnership amid growing global chip supply constraints.