Tesla, Samsung seal $16.5b AI chip alliance

By Nnaemeka Wisdom

In a move poised to shape the future of artificial intelligence, AI, and electric vehicles, Tesla has entered into a $16.5 billion partnership with Samsung to produce advanced AI chips.

The collaboration was confirmed by Tesla CEO, Elon Musk, in a post on X (formerly Twitter), shortly after Samsung disclosed the agreement in a regulatory filing. Musk noted that the new “AI6 chips” would be produced at Samsung’s state-of-the-art semiconductor facility in Taylor, Texas, US.

Musk wrote: “The strategic importance of this is hard to overstate. These AI6 chips will power our Full Self-Driving software and broader AI capabilities, including robotics and neural networks.”

The chips are expected to serve as the foundation for Tesla’s next generation of self-driving software and potentially fuel other AI-related innovations within the Musk-led tech ecosystem.

Industry experts have hailed the deal as transformative.

Alvin Nguyen, a senior analyst at Forrest, described the alliance as a “win-win” for both companies.

 Nguyen said: “For Tesla, this deal means they now have a local and reliable partner to manufacture next-gen chips critical for Full Self-Driving and other AI-driven features.

“For Samsung, it finally brings a high-profile customer to its Texas plant, which had previously struggled to gain traction.”

Nguyen added, “This partnership is not just about money, it’s about innovation and the race to dominate AI technology in the EV sector.”

As countries and corporations ramp up efforts to become more self-sufficient in chip production, analysts say this deal may mark a turning point in the global tech supply chain, particularly for the US, where semiconductor sovereignty has become a strategic priority.

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