Elon Musk says Samsung will make AI chips for Tesla

Samsung revealed in a public disclosure on Monday that it had entered into a supply agreement for semiconductor manufacturing. 

The deal was valued at $16.5 billion, and its timeline was defined with a start date of July 24, 2025, and December 31, 2033. For confidentiality purposes, Samsung has opted to keep key details of the contract private, warning investors that the agreement is subject to change and even termination. 

Elon Musk announced deal with Samsung on X

On the same day, business tycoon Elon Musk confirmed a manufacturing arrangement between Tesla and the electronics company in an X post.

“Samsung’s giant new Texas fab will be dedicated to making Tesla’s next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona,” wrote Elon Musk. 

The update comes as Tesla experienced a drop in revenues for its Q2 period, mainly a 16% dip in the automotive segment, information that, at the time, sent its share price tumbling by 5% in after-hours trading to a level of $317.80, as reported earlier by Coinheadlines. 

The previous year, the Biden administration announced $4.75 billion in funds, which were to be used as funds for Samsung’s semiconductor facilities in Texas, a key initiative under the CHIPS Act—legislation aimed at making the U.S. more independent when it comes to the need for a stable supply of chips to be used for AI manufacturing and other purposes, according to The Guardian.  

Source: Google Finance

At the time of reporting, Tesla Shares were up by 2.03%, trading at $322.46.