Tesla (TSLA) Signs $16.5B AI Chip Deal With Samsung—Musk Calls It “Hard to Overstate”

Tesla, Inc. (NASDAQ:TSLA) is one of the AI Stocks in the Spotlight TodayOn July 28, Tesla announced that it had signed a $16.5 billion deal to source chips from Samsung Electronics. While the move may boost Samsung’s unprofitable contract business, several sources believe that it is unlikely to help Tesla sell more EVs or roll out robotaxis more quickly.

According to Tesla CEO Elon Musk, Samsung’s new chip factory in Taylor, Texas, would be making Tesla’s next-generation AI6 chip for its upcoming cars.

“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.”

-Elon Musk

This could be a big deal for Samsung, which has lost major clients like Google in recent years to competitors due to workflow issues and low production yields.

Tesla (TSLA) Signs $16.5B AI Chip Deal With Samsung—Musk Calls It “Hard to Overstate”

 “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.”

While Samsung already produces the AI4 and has been working with Tesla for several years, South Korea’s tech giant had lost the AI5 deal to TSMC.

The recent deal is said to amount to an estimated $16.5 billion.

“The $16.5B number is just the bare minimum. Actual output is likely to be several times higher.”

-Musk

Tesla, Inc. (NASDAQ:TSLA) is an automotive and clean energy company that leverages advanced artificial intelligence in its autonomous driving technology and robotics initiatives.

While we acknowledge the risk and potential of TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.