Tesla Signs $16.5 Billion Contract With Samsung To Make AI Chips 48
An anonymous reader quotes a report from CNBC: Samsung Electronics has entered into a $16.5 billion contract for supplying semiconductors to Tesla, based on a regulatory filing by the South Korean firm and Tesla CEO Elon Musk's posts on X. The memory chipmaker, which had not named the counterparty, mentioned in its filing that the effective start date of the contract was July 26, 2025 -- receipt of orders -- and its end date was Dec. 31, 2033. However, Musk later confirmed in a reply to a post on social media platform X that Tesla was the counterparty.
He also posted: "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4.TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona. Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress," Musk said on X, and suggested that the deal with Samsung could likely be even larger than the announced $16.5 billion.
Samsung earlier said that details of the deal, including the name of the counterparty, will not be disclosed until the end of 2033, citing a request from the second party "to protect trade secrets," according to a Google translation of the filing in Korean on Monday. "Since the main contents of the contract have not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully considering the possibility of changes or termination of the contract," the company said.
He also posted: "Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip. The strategic importance of this is hard to overstate. Samsung currently makes AI4.TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona. Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress," Musk said on X, and suggested that the deal with Samsung could likely be even larger than the announced $16.5 billion.
Samsung earlier said that details of the deal, including the name of the counterparty, will not be disclosed until the end of 2033, citing a request from the second party "to protect trade secrets," according to a Google translation of the filing in Korean on Monday. "Since the main contents of the contract have not been disclosed due to the need to maintain business confidentiality, investors are advised to invest carefully considering the possibility of changes or termination of the contract," the company said.
Say what? (Score:1, Troll)
Is he going to hand solder the pins on the chips? This sounds like something Kim Jong Un would say. As if he knows more than a multi-billon dollar international company whose had decades of experience making chips.
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Is he going to hand solder the pins on the chips?
It would be fun to watch for a bit...
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Yep, that does not inspire confidence. If these chips were going to be sold to many different buyers, that line right there would make me question Samsung's prospects. But since they're just for Tesla, go ahead, let Elon mess it up. If the contract language is tight with respect for protection for Samsung, it won't be any skin off of Samsung's back. However, if Samsung has too much skin in the game, that's a big risk. Elon
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Tesla has had its own custom-designed AI chips running in cars since HW3 in 2019, replacing an earlier setup based on NVidia GPUs in order to get better performance at a lower unit cost and lower power consumption, with onboard redundancy, by optimizing the hardware to their tasks. They don't build the chips - they don't have a fab - they just design them.
Since 2021 (officially) they've also been working on the much more architecturally ambitious Dojo training supercomputer project, but I'm not sure if this
Did Samsung demand that up front? (Score:4, Insightful)
Because they should really make sure they get paid the $16.5bil up front.
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I'm not going to bother looking for links including previous stories here on /. that you can find on your own easily, but just a reminder that Samsung Electronics and Foundry ops are in a huge hole financially as so most previous customers have bailed for TSMC, so basically Elon is likely getting fab & ASIC engineering for a lot cheaper than competitors in exchange for the "investment". This also keeps the Texas fab afloat so the Chips Act money keeps coming.
Elon: The $16.5B number is just the bare minimum (Score:2)
Just found this on Reddit so replying to myself; seems to confirm my hunch:
The $16.5B number is just the bare minimum. Actual output is likely to be several times higher.
https://xcancel.com/elonmusk/s... [xcancel.com]
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Space Karen does not have reputation of his mate Pumpkin.
He just sells snake oil to idiots and Samsung will get part of his profits.
More pump and dump (Score:1, Troll)
Tesla has never been profitable without those subsidies except for a brief period of time during covid when supply chain problems drove up the value of their cars because they had overbought components and they were the only company that
Furthermore one thing for sure with (Score:1)
Musk is that he should be banned everywhere because he's a nazi and he manipulated the election with the help of AI and gerrymandering maps preventing 7 millions democrat voters to vote. Somebody ran the numbers to figure out how much voters suppression there was. In 2024 7 million democrat people tried to vote and couldn't.
The Democrats could run Jesus fucking Christ and it wouldn't do any good if the Republicans just stop 7 million people from voting.. it literally doesn't matter how good a candidate they
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Well, pumping and dumping is most of what the US has "produced" in the last few years.
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Although the scale of how much Tesla is overvalued is terrifying.
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The EV credit is going away, but that's not necessarily bad for Tesla; they're well established (despite being a new company going up against Big Auto's huge head-start), so they don't need the corporate welfare; they'll probably fare this much better than the competition.
The pay package was ap
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Since Q3 2020, regulatory credits totaled 22.7% of Tesla's cumulative profits. $9.6B of $52.4B.
For 2024, the credits were 43.3% of profits. ~ $3.8B of $8.7B.
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* Since the beginning of 2024, not "for".
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Ordinarily that would be a huge liability but when the supply chains blew up it became an asset. So for a short period of time they could be profitable selling cars cuz they can jack up their prices for people who just had to buy a car.
When that Bonanza was over they immediately went back to the regulatory credits and it's almost
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Next model is the Naught Z
"Grok, are roundabouts woke bullshit?" (Score:2)
So no MAGA (Score:2)
Those tariffs could hurt.
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Aren't only the ramblers made in China? (Score:2)
Buying non-American made stuff doesn't seem an issue with MAGA. Look at how much of that overpriced, Chinese-made Yeti stuff they fawn over when buying.
Not disputing your point, but your Yeti comment threw me. I thought you paid more because the Tundra/LoadOuts were made in the USA. I'm far from MAGA, but my almost 10yo yeti mug is used 3-4x daily, hence the prolific slashdot commenting, and looks brand new.
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I've got a steel 1 L bottle about the same age that goes camping and kayaking a lot and mostly rolls around the car the rest of the time. Mine was free swag at a conference, but I've definitely gotten the $65 CAN they apparently cost out of it.
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So not manufactured in the USA ? Those tariffs could hurt.
According to the second paragraph of the summary:
So: yes, manufactured in the USA.
I'm curious about this NDA (Score:2)
Samsung earlier said that details of the deal, including the name of the counterparty, will not be disclosed until the end of 2033, citing a request from the second party "to protect trade secrets,"
So, did Musk just violate his own NDA? Can't help but wonder if there will be any consequences to this.
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Another reason to not buy a tesla (Score:1)
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Re: Another reason to not buy a tesla (Score:1)
All I could think of is that Tesla stuff is known to burst into flames, and Samsung stuff is too... ;)
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Self-driving yet? (Score:2, Flamebait)
Will my six-year old Model 3 with FSD, like fully self-drive because of this?
No wait, I don't care; it goes next month to be replaced by a Porsche EV. That's what having an unstable Nazi as a CEO does to potential repeat buyers. Getting the orange one into power and laughing along as he threatens my country with becoming the 51st "state" made sure I sold it as soon as I could.
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They super pinky swear promise that this time HW5 will feature FSD. Just like they super pinky swore that HW4 will feature FSD, and HW3, and HW2 ... they made no claims about their original computer though.
Um... (Score:2)
Musk: "... I will walk the line personally to accelerate the pace of progress"
Samsung: "...investors are advised to invest carefully considering the possibility of changes or termination of the contract"
I'm sure that Musk striding around the fab in a bunny suit will have a massive effect on production, and I'm certain the investors will have nothing to worry about.
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That is because Samsung is a respectable business, while Musk is a clown with an inferiority complex that uses money as a personality surrogate.
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I'm sure that Musk striding around the fab in a bunny suit will have a massive effect on production, and I'm certain the investors will have nothing to worry about.
I can see Musk requesting that things be sped up like lithography time.
Musk: "It takes 20 minutes for this fancy machine to process a wafer. That's too long. Make it 10 minutes."
Samsung: "That would lead to yield losses."
Musk:"Do it."
[Weeks later] Samsung: "Our yield losses are hitting 80% compared to 5% they were 1 month ago."
Musk:"Why??"
Samsung: "Lithography defects"
Musk:"Why are your processes so bad?"
No more Tesla cars shipped to Hawaii (Score:3)
I'm a bit surprised this isn't making more news.
https://www.hawaiipublicradio.... [hawaiipublicradio.org]
Because of federal and state laws in place the shipping company Matson has an effective monopoly on cars brought to Hawaii. Electric cars have been growing in popularity in the state, as indicated in the article I linked to, but this should make people wonder how long that lasts if the one company that has been bringing EVs to the state decides they won't bring any more to the islands.
If Elon Musk wants to protect his market for electric vehicles then maybe he needs to work out how they are to be shipped over the sea safely.
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I'm a bit surprised this isn't making more news. https://www.hawaiipublicradio.... [hawaiipublicradio.org]
Because of federal and state laws in place the shipping company Matson has an effective monopoly on cars brought to Hawaii. Electric cars have been growing in popularity in the state, as indicated in the article I linked to, but this should make people wonder how long that lasts if the one company that has been bringing EVs to the state decides they won't bring any more to the islands.
If Elon Musk wants to protect his market for electric vehicles then maybe he needs to work out how they are to be shipped over the sea safely.
Just make sure they're sealed adequately and drive them across the ocean. After all, Elon Musk says that a Tesla will float (for a while). :-)
Alternatively, the Boring Company could build a tunnel under the Pacific ocean from the Bay Area and just drive them over there. At one mile per week, they'll be done in only about 47 years. :-)
so... Musk is going to move into chip manufacturin (Score:2)
reading between the line... sounds like Musk is going to move into advanced chip manufacturing in the future.
Usually when a company wants to be this closely integrated, it's not for "efficiency"... but to learn and start doing their own manufacturing down the line
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reading between the line... sounds like Musk is going to move into advanced chip manufacturing in the future.
I say we let him. After all it's so easy, anyone can start a chip fab with pocket money. Incidentally, this may be related to the Tesla prediction that their Dojo supercomputer would do 100 exaflops by now. Well, considering the #1 supercomputer El Capitan cracked 1.7 exaflops recently that estimation seems grossly exaggerated. Of course, it was the chip fabs fault. Elon will fix it.