Tesla's CEO, Elon Musk, discloses a significant $16.5 billion agreement with Samsung for acquiring AI chips for Tesla's operations.
In a significant move, Tesla and Samsung have announced a partnership for the manufacturing of Tesla's next-generation AI chip, AI6, at Samsung's upcoming semiconductor plant in Texas.
The AI6 chip is designed to unify Tesla's AI ecosystem, integrating the Dojo supercomputer architecture directly into vehicle and robot hardware. This chip will power Tesla's Full Self-Driving systems, Optimus humanoid robots, and AI training infrastructure, creating a single hardware pipeline that simplifies development and accelerates innovation.
Samsung's Texas plant, initially scheduled to begin operations in 2024, has been delayed until 2026. However, the Tesla deal for the manufacturing of AI6 chips could prevent further delays in the completion of Samsung's Texas plant.
This collaboration goes beyond a typical fab-client relationship. Tesla is not only designing the AI6 chip but is actively collaborating with Samsung at the Texas fab to maximize manufacturing efficiency and optimize production processes. Elon Musk intends to personally oversee these efforts, ensuring tight integration between Tesla’s chip design expertise and Samsung’s semiconductor fabrication capabilities within the same facility.
The manufacturing contract between Tesla and Samsung will run from now till the end of 2033. The value of the deal is $16.5 billion, making it a significant step in Tesla's vertical integration strategy.
Samsung, on the other hand, benefits from Tesla’s hands-on collaboration to enhance fab performance and secure a high-value client. The AI6 chips will be the sole customers for Samsung's Texas plant initially. Samsung has announced plans to invest over $37 billion in the Texas plant to manufacture 2-nanometer chips. Additionally, the company has received $4.74 billion in federal government funding under the Biden administration's CHIPS Act.
Tesla's current AI chip, AI4, is being manufactured by Samsung and is internally designed by Tesla. The AI5 chips will be initially manufactured in Taiwan and later at TSMC's Arizona plant. Initial AI6 chip production may prioritize Optimus robots and Dojo supercomputing clusters before rolling out in Tesla vehicles, with mass production anticipated around 2028–2032.
The partnership between Tesla and Samsung is expected to have far-reaching implications for both companies. For Tesla, the AI6 chip is a key component of Elon Musk's plan for the company's future, as Tesla faces flagging sales numbers. For Samsung, the deal provides a much-needed customer for its Texas plant, which had been struggling to find customers earlier this month, according to Nikkei Asia.
The value of Samsung Electronics' Seoul-traded shares surged 6.83% to $50.8 (KRW 70,400) after the announcement. The Tesla Robotaxis are a key component of Musk's plan for the company's future, as Tesla faces flagging sales numbers. The partnership between Tesla and Samsung is set to revolutionize the automotive and AI industries, promising exciting developments in the years to come.
- This partnership between Tesla and Samsung, involving the manufacturing of Tesla's next-generation AI chip, AI6, is a significant step in Tesla's financial strategy as they strive to optimize their AI ecosystem and accelerate innovation in business, technology, and transportation.
- With the AI6 chips being the sole customers for Samsung's Texas plant initially, this collaboration not only assists Samsung in advancing the performance of their fabrication facility but also secures a valuable client in the competitive technology and business arena.
