Elon Musk entrusts Samsung with Tesla's future: it will manufacture its smart brain for €14 billion.

Samsung will produce the next generation of artificial intelligence semiconductors for Elon Musk's car company Tesla in a new $16.5 billion deal running from 2025 to 2033.

The tech mogul claims on his profile on the social network X (formerly Twitter) that Samsung's plan is to build a plant in Taylor (Texas, United States) to produce Tesla's next-generation AI6 chip . In addition, the contract award comes at a time when the South Korean manufacturer has been losing ground in chip manufacturing.

On the other hand, according to Musk, Tesla will actively participate in optimizing the manufacturing process and will personally oversee production at the plant. However, production is expected to begin in late 2026, although some analysts point out that it could be delayed until 2027 or 2028 due to challenges in acquiring customers and the goal of achieving optimal throughput rates at the plant.

However, even though the start of the manufacturing process could be delayed, the agreement between Tesla and Samsung represents a key step for the car company in its strategy to consolidate its domestic chip supply , whether to fuel its advances in autonomous driving, Full Self-Driving systems, humanoid robots or artificial intelligence training centers. Meanwhile, Samsung is looking to revive its foundry business , which was hit years ago by competition from TSMC and its efficiency problems.

Samsung shares fall after the Tesla deal

Reuters reports that Samsung Electronics shares fell 1% on Tuesday , July 29, following a sharp rally sparked by the signing of a $16.5 billion deal with Tesla to supply artificial intelligence chips.

Although the contract provides a boost to its third-party manufacturing unit—a business that has so far been unprofitable—analysts warn that Samsung is still struggling to attract major customers in both logic and memory chips, compared to leaders like TSMC and SK Hynix. The Tesla deal nonetheless represents progress, but Samsung still needs to demonstrate its ability to execute and attract new partners to achieve a sustainable recovery in its chip manufacturing business.

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