Tesla will buy Samsung processors for $16 billion

Tesla CEO and co-founder Elon Musk announced a major contract with South Korean company Samsung Electronics for the production of chips for electric vehicles. The deal is worth $16.5 billion.

According to Musk, the contract is valid until December 31, 2033, and provides for the production of new AI6 chips at a Samsung plant in Texas. Currently, the South Korean company is already supplying Tesla with previous-generation chips, AI4. The development of AI5 chips, in turn, is being carried out by Taiwan’s TSMC.

Samsung does not officially name Tesla as its client, citing commercial secrecy. However, Musk himself revealed the details of the agreement and emphasized that he will personally supervise the production process. He also added that the final contract amount may increase.

The deal strengthens the collaboration between the two tech giants amid growing competition in the field of automotive AI systems and autonomous driving.

Google has changed its plans to use Samsung’s HBM3E chips for its AI servers and, according to recent reports, has switched to products from another manufacturer, most likely Micron. The decision is due to technical difficulties that the South Korean company faced.

The main reason is said to be problems with heat dissipation – a key aspect for obtaining certification from NVIDIA, one of the leading players in the field of AI accelerators. While SK Hynix has already achieved certification and is successfully increasing sales of HBM3E, Samsung is still trying to eliminate the shortcomings. Despite design changes in its chips, the company was unable to pass the test from NVIDIA.

Samsung itself has also spoken out about the problems with its HBM products: at a recent meeting with shareholders, representatives acknowledged technical difficulties and announced a shift in focus to the development of HBM4, the next-generation chips. However, it remains unclear whether Samsung will be able to regain its leadership in a market where competitors have already pulled ahead.