Tesla has signed a $16.5 billion semiconductor manufacturing agreement with Samsung Electronics. The deal marks a major step forward for American-based chip production and AI innovation.
CEO Elon Musk confirmed the agreement on Sunday. He said Samsung’s new facility in Taylor, Texas, will produce Tesla’s upcoming AI6 chips. These chips are designed for use in self-driving cars, humanoid robots, and advanced AI data centers.
“The strategic importance of this is hard to overstate,” Musk posted on X, formerly Twitter. “Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip.”
Musk explained that the AI6 chip will be compact enough for robotics. At the same time, it will have enough power to run AI infrastructure in data centers. Samsung currently manufactures Tesla’s AI4 chip. The AI5 chip will be built by Taiwan’s TSMC, first in Taiwan and later in Arizona.
Samsung disclosed the $16.5 billion contract in a regulatory filing. However, it did not name the customer, citing trade secrecy. Musk later confirmed that Tesla was the counterparty. The contract starts July 26, 2025, and runs through December 31, 2033.
Musk said the actual value of the deal could be “several times higher” than what was announced. He also confirmed that Tesla will work closely with Samsung to improve chip manufacturing efficiency. “I will walk the line personally to accelerate the pace of progress,” he wrote.
Samsung has struggled to keep up with rivals like TSMC in the chip foundry business. Its division has seen weak performance, especially in meeting AI demand. The Tesla deal is expected to revive Samsung’s U.S. operations and bring fresh momentum to the Taylor, Texas facility.
On Monday, Samsung shares jumped more than 6%. That was their highest trading level since September 2024.
Musk also noted that the Texas factory is close to his home. This will allow him to oversee the process directly. The move reflects a broader trend of reshoring critical technology to the United States.
While production is still years away, the partnership lays the groundwork for domestic chip-making dominance. It also highlights the importance of private-sector leadership in building American self-reliance in tech.