Tesla’s striking a massive $16.5 billion deal with Samsung to manufacture its next-generation AI6 chip at a new facility in Taylor, Texas. The partnership marks a major shift from Tesla‘s previous chip manufacturing arrangements and gives Samsung an unusual amount of influence over the production process.
The Taylor facility sits near Tesla’s headquarters and Gigafactory, making it easy for teams to work together. This proximity matters because Tesla’s engineers will help Samsung refine the manufacturing process to enhance chip output and quality. Elon Musk plans to personally oversee the project to accelerate development.
Samsung’s new fab replaces the company’s earlier strategy of trying to attract multiple big clients. Instead, they’re betting everything on Tesla’s AI6 chip production. This dedicated approach differs from how TSMC handles Tesla’s current AI5 chip, which they make in Taiwan and Arizona facilities shared with other customers.
Samsung abandons multi-client strategy, betting everything on Tesla’s AI6 chip production exclusively.
The AI6 chip represents a big leap forward from Tesla’s current technology. It’s designed as a unified system that can handle both AI training and real-world tasks. The chip will power advanced Full Self-Driving features, like recognizing hand gestures and guiding through toll booths. It’ll also run Tesla’s Optimus robots and support high-performance AI training systems. Tesla’s current chips include Samsung’s AI4 and TSMC’s AI5, showing the company’s reliance on multiple foundry partners for its semiconductor needs.
Tesla’s deal could exceed the initial $16.5 billion depending on how many chips they need. The long-term contract runs through 2033, giving both companies stability for planning and investment. Samsung gets a guaranteed major customer, while Tesla secures a reliable supply of its most important chips.
This Texas partnership reinforces the state’s growing importance in advanced chip manufacturing. It also shows Tesla’s commitment to controlling more of its supply chain, from chip design to production. By working closely with Samsung on manufacturing processes, Tesla hopes to achieve breakthroughs that traditional chip partnerships can’t deliver.
The AI6 won’t arrive until after 2026, following the AI5’s introduction in Tesla vehicles. The AI6, also known as Hardware 6, represents Tesla’s most ambitious chip design yet. But the groundwork being laid now in Texas could reshape how tech companies approach chip manufacturing partnerships in the future.