Samsung Electronics has entered into a $16.5 billion agreement with Tesla to manufacture the next-generation AI6 chip, marking a major strategic shift for both companies. The multiyear partnership gives Samsung’s loss-making chip foundry business a critical boost and deepens Tesla’s investment in AI chip technology for future applications. Elon Musk confirmed the collaboration, stating the AI6 chips will be built at Samsung’s upcoming fab in Texas. The chips are intended for Tesla’s growing AI operations, including humanoid robots, autonomous vehicles, and data centers. The deal has triggered a positive market response, with Samsung and Tesla shares rising significantly.
Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency.
— Elon Musk (@elonmusk) July 28, 2025
This is a critical point, as I will walk the line personally to accelerate the pace of progress. And the fab is conveniently located not far from my house 😃
Tesla Taps Samsung for Next-Gen AI6 Chip
Elon Musk, Tesla’s CEO, announced via X that the AI6 inference chip—tailored for AI data centers, robotics, and self-driving technologies will be manufactured by Samsung. The production is set to begin at Samsung’s advanced facility in Taylor, Texas, by 2026. The chip, described by Musk as strategically vital, is expected to power Tesla’s most ambitious ventures into artificial intelligence and automation. The AI6 chip will form the core of Tesla’s robotics and full self-driving capabilities, emphasizing the EV giant’s long-term AI ambitions.
Before Musk’s statement, Samsung disclosed the $16.5 billion agreement without naming Tesla, citing client confidentiality. However, hours later, the connection was publicly confirmed. The deal will run until the end of 2033, making it one of the largest in Samsung’s foundry history. Analysts suggest that this move could solidify Samsung’s role in the U.S. chip supply chain amid growing demand for localized and resilient semiconductor production.
Samsung Foundry Operations in the US gets a boost
The manufacturing deal is an indication of a possible rebound in the foundry business of Samsung which has failed to get a proper market share to Taiwan Semiconductor Manufacturing Company (TSMC). Based on the TrendForce data, TSMC was leading in the global foundry market with 67 percent, with Samsung slightly behind with 8 percent of the market in Q4 2024. Financial inflows aside, the AI6 chip sales to Samsung could bring other benefits in the form of helping the latter gain new clients who want to move beyond TSMC.
The fact that the Tesla deal has injected fresh life into the Samsung plant in Texas, which was bogged down with operational and workforce problems. Observing industry, this collaboration can enable Samsung to deal with its problem of low yield rate and enhance efficiency. The Taylor plant is part of what Samsung seeks to do by expanding chip-making in the United States and capturing long- term business.
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Responses of Markets and Financial Implications
Investors were optimistic as Samsung shares rose almost 7 per cent on the Korean stock exchange on the news. And the Tesla stock also increased by 4.2 percent, during the Monday trading. The fact that the market was positively received supports the idea that it is a strategically important partnership in the ever-changing environment of AI and chip manufacturing.Samsung lowered the guidance on operating profit in its Q2, with a 56 percent decrease to 4.6 trillion won earlier this month, mostly due to the inventory expenses related to bans on advanced chips exports to China by the U.S.
The foundry department had low utilization and one time losses. Analysts think this Tesla deal could be used to overturn such trends and salvage long-term production volume and factory utilization rates.Samsung anticipates a slow improvement in the demand of foundries later in the year. The company will soon start the mass production of 2-nanometer chips. Future revenues might be stabilized by the Tesla AI6 chip and other potential customers like Qualcomm and Japan based Preferred Networks.
Strategic Positioning in Chip Race around the World
The alliance between Tesla and Samsung comes when geopolitics and technological competition are pushing countries to domesticate chip production. By activating the Texas fab, Samsung not only gains a stronger position on the U.S. market but also removes itself far away from where the export ban applies to manufacturers located in China. This is also closest to how Washington is working on ensuring semiconductor supply chains are within the U.S. borders.
By deciding to go with Samsung as opposed to other foundries, Tesla also seems to have confidence in the next-gen chip capacity of the South Korean giant. Although it is unlikely to lead to the immediate increase in speed of rolling out EV or robotaxi by Tesla, the deal in regards to chip production supports long-term AI infrastructure by the car company. According to Musk, the strategic significance of the deal can hardly be overestimated, which implies that the AI6 chip may be an essential precondition to support the development of a new product cadence at Tesla.
AI, Robotics and the Foundry Future
The need to have high-performance chips has been fuelled by the increased development of AI across industries. The AI6 chip follows many other sections of Tesla, including auto, robot, and AI training to be competitive in the new market of technology. Analysts also share the opinion that the collaboration will become an example of other Tesla and giant chipmakers collaborations.With the intention to regain its market share taken away in the foundry segment, Samsung now has a chance to demonstrate its high-tech manufacturing at the large-scale project. The Texas fab that was full of delays can define a strategic point of Samsung in the U.S. operations.The multiyear agreement is an important part of two companies: Tesla gets a committed partner in its AI chip aspirations, and Samsung receives a high-stakes customer that can breathe life into its foundry entity in a globally competitive environment.