Tesla, the electric vehicle giant, is set to receive the next generation of semiconductor chips from South Korean powerhouse Samsung in a deal reportedly worth an estimated $16 billion over the span of the next eight years. The agreement was outed in a filing disclosed by Samsung on Sunday. The document mentioned a new supply contract with a confidential "large global company," valued at approximately 22.76 trillion Korean won ($16.5 billion).
Major news outlet Bloomberg, later confirmed by Tesla CEO Elon Musk, identified the masked "large global company" as Tesla. According to Musk's social media updates, Samsung's upcoming, expansive Texas fab shall be focused on the production of Tesla's future AI6 chip. Stressing the strategic significance of the deal, Musk further stated that Samsung is already responsible for the manufacture of Tesla's AI4 chip and that the Taiwan Semiconductor Manufacturing Co. (TSMC) is set to produce the recently finalized design of the AI5 chip.
The agreement allows Tesla to aid in increasing manufacturing efficiency at Samsung. Musk referred to the deal's estimation of $16.5 billion as the lowest offer, suggesting that the actual production is projected to be manifold.
The AI6 chip has been designated for use in a broad spectrum of Tesla's line, including its autonomous driving software in cars, its Optimus humanoid robots, as well as to run data centers for the same. The Wall Street Journal reported this development.
The deal has sent Tesla shares up by 1.5% in Monday's pre-market trade, coinciding with an overall favourable atmosphere brought about by hopeful U.S.-European Union trade news. Samsung also enjoyed a stock surge of 6.8% in the Korean Stock Exchange, reaching its highest point since September 2021.