Tesla and Samsung have reached an agreement for the next generation of AI6 chips, according to Elon Musk. The deal is worth $16.5 billion and will last eight years. Samsung said it had secured the contract from a “major global company,” but did not name it at first.
Musk said Samsung will make the AI6 chips at its new Texas plant, which is dedicated exclusively to Tesla. He added that Samsung will allow them to help improve the manufacturing process. “I will personally oversee the process to accelerate progress,” Musk told X (formerly Twitter).
The agreement will start in July and run until 2033. According to Samsung, this is equivalent to 7.6% of its expected annual sales for 2024. Samsung declined to confirm Tesla as a client even after Musk's post, citing confidentiality policies.
This is a big help for Samsung, which is currently lagging behind in the AI chip manufacturing competition against SK hynix and Taiwan’s TSMC. Its semiconductor division, which is the company’s main source of revenue, has recently seen a decline in revenue.
This new deal is seen as a major boost to Samsung's business as demand for advanced AI chips continues to grow, especially in the electric vehicle and technology industries.
