Musk announces Tesla, Samsung Electronics chip supply deal

Tesla CEO Elon Musk said late Sunday the automaker has signed a deal to obtain semiconductor chips from Samsung Electronics.The big picture: Samsung had announced Saturday that it had struck a $16.5 billion supply agreement, but it didn't name the company.The announcement comes after Samsung, one of the world's largest memory chip makers, acknowledged last year that it had fallen behind in the AI chips war.Driving the news: "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," Musk wrote on his platform X."Samsung currently makes AI4. TSMC will make AI5, which just finished design, initially in Taiwan and then Arizona," Musk added."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. And the fab is conveniently located not far from my house."Representatives for Samsung did not immediately respond to Axios' late Sunday request for comment.Editor's note: This is a breaking news story. Please check back for updates.

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