Tesla Confirms $16.5 Billion Chip Deal with Samsung

Seoul — Tesla CEO Elon Musk has confirmed that the electric carmaker has signed a $16.5 billion chip supply contract with Samsung Electronics. The South Korean tech giant had filed regulatory documents outlining the agreement but initially withheld the name of the client due to confidentiality.

According to the filing, the contract officially began on July 26, 2024, and runs through December 31, 2033. Though the partner remained unnamed, Musk later acknowledged on X that Samsung’s Texas fabrication plant will manufacture Tesla’s upcoming AI6 chip. The post was later deleted.

“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip,” Musk stated in his now-deleted post. He also confirmed that while Samsung currently produces the AI4 chip, TSMC will handle the AI5 version.

Samsung cited trade secret concerns for keeping the partner’s identity under wraps until the contract ends. The company urged investors to exercise caution, as terms may evolve or be terminated.

Samsung shares rose nearly 3% following the filing. Industry analysts, including The Futurum Group’s Ray Wang, had earlier speculated that Tesla was likely the buyer.

This long-term deal is a strategic move for both companies as Tesla pushes forward with AI hardware for autonomous driving, and Samsung works to catch up in high-performance chip manufacturing.

Samsung will release its second-quarter earnings on Thursday and is expected to report a profit drop due to weak semiconductor demand, despite this milestone deal with Tesla.