Tesla, Samsung Ink $16.5 Billion Chip Deal for AI6 Production at Texas Plant

Tesla has signed a landmark $16.5 billion chip supply agreement with Samsung Electronics to manufacture its advanced AI6 chips through 2033, marking one of the largest such deals in the automotive tech space. The chips will be produced at Samsung’s upcoming foundry in Taylor, Texas, a facility that has struggled to secure major clients since its launch was announced.

Tesla CEO Elon Musk confirmed the agreement on social media, stating that the electric vehicle giant will collaborate closely with Samsung to improve manufacturing efficiency. He also suggested that actual orders may exceed the $16.5 billion estimate, underlining Tesla’s growing demand for AI hardware as it ramps up autonomous vehicle development and AI-driven innovations.

The deal gave a major boost to Samsung’s stock, which surged nearly 7%, reflecting renewed investor confidence in the company’s foundry business. The foundry arm has been facing losses amid fierce competition from Taiwan’s TSMC and domestic rival SK Hynix. Analysts estimate that Samsung’s foundry division incurred losses exceeding 5 trillion won (around $3.6 billion) in the first half of 2025.

Although Samsung initially kept the client’s identity confidential, it later confirmed Tesla as the customer. This deal represents the first significant commitment for the Taylor facility, which had previously delayed operations due to weak demand. The plant is now expected to begin production in 2026.

The agreement also aligns with broader South Korea-U.S. industrial cooperation goals, particularly in semiconductor technology, at a time when both nations are negotiating to avoid additional U.S. tariffs.

While the AI6 chips won’t use Samsung’s latest 2-nanometer node, industry experts believe this deal marks a turning point for Samsung’s logic chip ambitions and gives Tesla a reliable partner for long-term chip supply as it deepens its AI footprint.