Samsung and Tesla Strike $16.5B AI Chip Deal to Power Next-Gen Robotics

Samsung, Tesla $16.5B AI Chip Deal Powers Robotics
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Prime Highlights

  • Tesla and Samsung have agreed on a $16.5 billion deal to manufacture AI6 chips at Samsung’s Texas fab.
  • The deal is referred to by Elon Musk as the most significant for Tesla’s robot and autonomous drive plans.

Key Fact

  • The deal will run until 2033, for Samsung’s Texas fab that will be solely manufacturing Tesla’s AI6 chips.
  • Musk mentioned that the worth of the deal can be greater than the quoted $16.5 billion considering increased chip requirements.

Key Background

Samsung Electronics won a record $16.5 billion contract to produce Tesla’s high-end AI6 chips at its brand-new Taylor, Texas-based chip factory. The nine-year contract is Samsung’s biggest foundry deal and represents Tesla’s commitment to furthering its AI-powered innovations, ranging from autonomous cars to robots. Elon Musk referred to the agreement as “strategically critical” in its nature to emphasize its importance to Tesla’s long-term vision.

Its Samsung Texas plant, one of its multi-billion-dollar United States business operations, was originally set to start production in 2024 but was postponed by the absence of equipment and low big orders. The agreement with Tesla gives the factory the drive it needs to be operating by 2026. As described by Musk, he is to lead the manufacturing charge with the close location of the factory to Tesla headquarters in Austin.

Tesla AI6 chips will drive next-generation technologies such as Full Self-Driving, humanoid robots Optimus, and the Dojo AI supercomputer. The chips are a huge upgrade over Tesla’s AI4 processors, also Samsung-made, and the future AI5 chips, which are being designed jointly with Taiwan’s TSMC. The new alliance is said to further cement Tesla as a leader in AI hardware in mobility and robotics.

The news of the Samsung-Tesla deal sparked an increase in Samsung’s stock price, an indicator of investors’ confidence in the rising reputation of Samsung as an AI chip player. Both parties will be the winners here—Samsung gets a high-profile client for its Texas plant, and Tesla has a dependable supplier of best-of-breed chips upon which its future as an AI player hangs.

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