Tesla CEO Elon Musk announced late on Sunday that Samsung will manufacture the car maker’s next-generation AI chip at its upcoming Texas semiconductor plant as part of a deal worth $16.5 billion, in a significant boost for Samsung’s struggling chipmaking arm.
Read the full story on Forbes: https://www.forbes.com/sites/siladityaray/2025/07/28/musk-announces-deal-with-samsung-for-tesla-ai-chips-made-in-texas-touts-strategic-importance/
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00:00Late on Sunday, Tesla CEO Elon Musk announced a $16.5 billion deal with Samsung to manufacture AI chips for Tesla.
00:09These chips will be made at Samsung's semiconductor plant in Taylor, Texas, which has been struggling to be operational and find customers.
00:17In a post on X, Musk said that Samsung's fabrication plant will be manufacturing the A16 chip.
00:23Currently, Samsung manufactures Tesla's A14 chip, which powers the autopilot feature on Tesla's electronic vehicles.
00:31The EV maker's A15 chips, however, are manufactured by Samsung's chipmaking rival TSMC.
00:38The Tesla-Samsung deal for the A16 chips is supposed to run through the end of 2033, but Samsung's fabrication plant in Texas is not scheduled to be operational until 2026.
00:49The plant received federal funding worth $4.74 billion under the Biden administration's CHIPS Act and Samsung plans to invest more than $37 billion in the plant to manufacture cutting-edge chips.
01:02This project was initially due to be operational in 2024, but was pushed back to 2026.
01:08In a report earlier this month, Nikkei Asia attributed the delay to a lack of customers.
01:12Musk's statement indicates Tesla will be the plant's only customer for now, dedicated to making A16 chips.
01:19Following the announcement, Samsung Electronics' sole-traded shares surged almost 7%, and Tesla shares also rose by 1.58% in pre-market trading on Monday.
01:30This is an improvement for the EV maker, whose stocks declined following its Q2 report, and for Musk as well, whose net worth dropped by $17 billion last week.
01:39For more on this story, check out the article at the link in the description.
