Tesla Secures $16.5 Billion Samsung Deal for AI6 Chip Production, Aims for Annual Design Cycle

Tesla is rapidly advancing its artificial intelligence chip development, with CEO Elon Musk announcing plans to produce AI chips at volumes exceeding all other manufacturers combined. The company is nearing completion of its AI5 chip design, has initiated work on AI6, and targets a new chip design for volume production every 12 months. This ambitious roadmap is underpinned by a significant $16.5 billion deal with Samsung to mass-produce the AI6 chips at its new fabrication facility in Taylor, Texas.

The current AI4 chip is already deployed in Tesla vehicles, with AI5 nearing its final design phase, known as tape-out. The upcoming AI6 chip is slated for use in both Tesla vehicles and data centers, forming a critical component of the company's broader AI strategy. Musk emphasized the profound impact these chips are expected to have, stating, > "We expect to build chips at higher volumes ultimately than all other AI chips combined. Read that sentence again, as I’m not kidding."

The strategic partnership with Samsung will see the South Korean tech giant's $16.5 billion Texas fab dedicated to manufacturing Tesla's next-generation AI6 chip. This multi-year contract, extending through 2033, is a significant boost for Samsung's foundry business, which has faced challenges in securing major clients for its new facility. Elon Musk highlighted the strategic importance of this collaboration, noting, "Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency," and confirming his personal involvement in accelerating progress at the plant.

These advanced AI chips are central to Tesla's vision for safer driving and enhanced medical care through its Optimus humanoid robots. Musk further stated, > "These chips will profoundly change the world in positive ways, saving millions of lives due to safer driving and providing advanced medical care to all people via Optimus." While Samsung will handle AI6 production, Taiwan Semiconductor Manufacturing Company (TSMC) is also involved, slated to produce the AI5 chips, initially in Taiwan and later at its Arizona facility.

The rapid development cycle and substantial manufacturing commitment underscore Tesla's aggressive push into custom silicon, aiming to reduce reliance on third-party suppliers and optimize performance for its autonomous driving systems and robotics. Industry analysts suggest that while the deal is a major win for Samsung, the actual output could be several times higher than the initial $16.5 billion figure, reflecting Tesla's long-term demand for these critical components.