Tesla Inc. Stock: Musk Strikes $16.5B Samsung AI Chip Deal

Cars Parked In Front Of Company Building

Image Source: Pexels


Tesla Inc. (Nasdaq: TSLA) shares rose 3.9% to $328.40 after CEO Elon Musk confirmed a $16.5 billion chip agreement with Samsung Electronics.

(Click on image to enlarge)

Tesla, Inc. (TSLA)


The deal marks a major step in Tesla’s autonomous vehicle roadmap and gives Samsung’s struggling foundry unit a vital customer and production opportunity. The contract, which runs through 2033, tasks Samsung’s Taylor, Texas plant with building Tesla’s upcoming AI6 chip, critical to future driving systems.

Musk emphasized the strategic weight of this partnership on X (formerly Twitter), suggesting the real output of the deal could far exceed the announced figure. He also revealed that he’ll be directly involved in walking and optimizing the fabrication line.


Implications for Samsung’s Foundry

Samsung’s win follows a rough stretch of underutilization in its semiconductor division. The company has lagged behind TSMC, which held a dominant 67.6% foundry market share in Q1, compared to Samsung’s 7.7%. With this Tesla deal, Samsung stands to gain a 10% annual boost in foundry revenue and may regain footing as a competitive alternative to TSMC.

Analysts view the agreement as more than a revenue source—it’s a long-term validation of Samsung’s next-gen 2-nanometer chip technology. It also aligns with U.S. efforts under the 2022 Chips and Science Act to bring semiconductor production stateside. Samsung’s U.S. expansion is backed by up to $9 billion in incentives.


Tesla’s Full Self-Driving Timeline

For Tesla, the AI6 chip is central to delivering on its Full Self-Driving (FSD) vision. Musk previously forecasted that Tesla could launch true autonomous vehicles by late 2026. However, Tesla’s evolving chip sourcing, moving from Samsung’s AI4 to TSMC’s AI5 and then back to Samsung’s AI6, has sparked skepticism about the clarity of its strategy. Customers have already faced issues with retrofitting older chips, which Musk called too costly.

Tesla has recently launched a driverless taxi service in Austin, but cars still require safety staff. While Musk remains confident, industry observers remain cautious about Tesla’s shifting hardware plans.


Stock Performance and Outlook

Despite recent volatility, TSLA is up 49.4% over the past year and a staggering 233.6% over five years. However, year-to-date, it has declined 18.68%, underperforming the S&P 500’s 8.68% gain. The upcoming quarters may remain turbulent until Tesla delivers autonomous vehicles at scale. The next earnings report will be a crucial checkpoint for investors gauging Tesla’s AI-driven future.


More By This Author:

Busy Week Ahead: All Eyes On The Fed’s Decision & Big Tech Earnings
Meta Under Fire As Facebook, WhatsApp, And Instagram Linked To Activist Abuse
Southern Copper Corp. Stock: $2M Fund Buy Signals Confidence Amid Mixed Ratings
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Or Sign in with