Tesla has inked a massive $16.5 billion deal with Samsung Electronics to source chips from its new factory in Taylor, Texas. This partnership could breathe new life into Samsung’s struggling contract chip manufacturing business, but it’s unlikely to speed up Tesla’s electric vehicle sales or robotaxi rollout anytime soon. Elon Musk, Tesla’s CEO, announced on Sunday that Samsung’s Texas facility will produce Tesla’s next-generation AI6 chip, designed for advanced AI applications. This deal is a lifeline for Samsung, which has faced delays at the Taylor plant due to challenges in securing major clients. On Monday, Samsung’s shares surged 6.8%, reflecting investor optimism about its role in the competitive AI chip race, where it lags behind rivals like TSMC. While the deal strengthens Tesla’s AI capabilities, it won’t directly address its current hurdles. Tesla is grappling with declining EV sales and the complex task of scaling its robotaxi service. Production at Samsung’s Texas plant is still years away, meaning no immediate boost for Tesla’s core businesses. Still, Tesla’s stock climbed 4.2% on Monday, buoyed by the deal’s long-term potential. Musk highlighted that the AI6 chip will power Tesla’s self-driving vehicles and Optimus humanoid robots, with potential for broader AI applications. “The $16.5B number is just the bare minimum. Actual output is likely to be several times higher,” Musk posted on X, signaling ambitious plans for the partnership. Musk emphasized that Samsung has allowed Tesla to help optimize manufacturing efficiency at the Texas facility. “This is a critical point, as I will walk the line personally to accelerate the progress,” Musk noted on X, adding that the factory’s proximity to his home is a convenient bonus. The deal’s announcement comes amid ongoing U.S.-South Korea trade talks, with Seoul pushing for partnerships in chips and shipbuilding to counter potential 25% U.S. tariffs. While it’s unclear if the Tesla-Samsung agreement ties directly to these discussions, it underscores the strategic importance of cross-border tech collaborations. For Samsung, this deal could solidify its position in the AI chip market. For Tesla, it’s a step toward future-proofing its AI-driven innovations, even if EV and robotaxi challenges persist. As Musk put it, the real impact of this partnership may far exceed the initial $16.5 billion figure—time will tell how it reshapes the tech landscape. Jul 28, 2025 Blagojce Krivevski Blagojce Krivevski is physicist and green technology lover. Keep in touch with Blagojce through his email, web site, Twitter, Linkedin, Facebook and Google+. July 28, 2025