Tesla, Inc. shares saw a notable increase in trading on Monday, following the announcement of a substantial $16.5 billion deal with Samsung for the production of artificial intelligence (AI) chips.
Key Details of the Deal
- Samsung Electronics has secured an eight-year contract to manufacture Tesla’s next-generation AI6 chip, marking the largest chip order the company has received from a single customer.
- The AI6 chips will be produced at Samsung’s new fabrication plant in Texas, which is part of a broader $40 billion investment supported by subsidies under the U.S. Chips and Science Act.
Applications of the AI6 Chip
The custom AI6 chip is designed to support Tesla’s autonomous driving systems and humanoid robot technology. Additionally, Tesla CEO Elon Musk stated that the AI6 chip could be utilized in Tesla’s data centers to train video-based AI models, potentially reducing the company’s reliance on general-purpose GPUs from Nvidia and AMD.
CEO Elon Musk’s Statement
Musk confirmed the deal, noting that Samsung has agreed to allow Tesla to assist in maximizing manufacturing efficiency. He also expressed his personal commitment to accelerating the pace of progress, stating that he would “walk the line personally” to ensure the project’s success. Musk described the deal as “strategically vital,” highlighting the fabrication plant’s proximity to his residence.
Projected Output and Significance
Musk indicated that the $16.5 billion figure is “just the bare minimum,” suggesting that the actual output is likely to be several times higher. This significant investment and partnership are expected to have a substantial impact on Tesla’s future endeavors.
Current Stock Performance
At the time of writing, Tesla stock is trading 3.88% higher at $328.35. This notable surge reflects the market’s positive response to the announcement of the Samsung deal and its potential implications for Tesla’s growth and innovation.