Tesla and Samsung just shook up the chip world with a game‑changing $16.5 billion pact. Here’s what you need to know—and why it matters to anyone betting on AI and electric vehicles.
Key Takeaways:
- $16.5 Billion Pact: Samsung to build Tesla AI6 chips at a new Texas fab
- Timeline 2025–2033: Long‑term supply deal to power self‑driving tech
- Efficiency Boost: Tesla to help optimize chip manufacturing
- U.S. Win: Strengthens American semiconductor production
In a move that’s sending ripples through the auto and tech worlds, Samsung has agreed to manufacture Tesla’s AI6 chips at a dedicated Texas facility.
First reported by Bloomberg on July 28, 2025, the agreement is valued at a staggering $16.5 billion and runs from 2025 to 2033.
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 😃
According to Elon Musk, this is about more than just volume—it’s about speed and control.
“Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency,” Musk tweeted.
“I will walk the line personally to accelerate the pace of progress.”
That fab? It’s located near Musk’s home.
Why does that matter? Because location = speed. When chips can be tested just down the road, Tesla can iterate faster than ever. And in the world of autonomous vehicles, faster development = safer cars.
The Texas plant will be exclusively dedicated to producing Tesla’s next‑generation AI6 chip—a processor designed to handle vast real-time data from Tesla’s camera and sensor arrays.
Samsung already builds Tesla’s AI4 chips, and TSMC is set to manufacture AI5 in Taiwan and later in Arizona. But this new partnership with Samsung is a strategic pivot, giving Tesla hands-on influence over a key part of its tech stack.
Beyond tech, this deal is a massive win for U.S. manufacturing. As chip nationalism grows and supply chain issues persist, Samsung’s Texas fab helps onshore critical semiconductor production—and bolsters its own image as a key player in American industry.
For Tesla, this isn’t just a chip deal—it’s a flex of innovation and speed. For Samsung, it’s a bold step into the EV future. And for the rest of us? It’s a glimpse into how AI and EVs are converging faster than ever.