Tesla has signed a $16.5 billion agreement with Samsung Electronics to source chips in a move expected to boost the South Korean tech giant's loss-making contract manufacturing business.
The electric vehicle maker's chief executive Elon Musk confirmed a deal, saying that 'the strategic importance of this is hard to overstate'.
The chips will be manufactured at Samsung's upcoming fabrication plant in Taylor, Texas, with the facility likely dedicated to producing the electric vehicle maker's next-generation AI6 chip.
Mr Musk added that Tesla would assist Samsung in improving manufacturing efficiency and plans to “walk the line personally” to accelerate progress at the fab, located near his Texas residence.
Samsung had previously announced the deal without naming the client, citing confidentiality.
However, three sources confirmed to Reuters that Tesla is the customer. The deal will run through the end of 2033.
Samsung shares jumped more than 4 per cent after the news broke, amid hopes the partnership could revive its foundry division, which Reuters reports has posted losses of more than $3.63 billion in the first half of this year.
Analysts say Samsung has struggled to keep pace with rivals like TSMC and SK Hynix in producing advanced AI chips, and the Tesla deal could help restore credibility and competitiveness to its semiconductor operations.
The agreement also signals a shift in global chip dynamics, as the US works to reduce its reliance on Taiwan and China by investing in domestic semiconductor production.
For consumers, the tie-up could accelerate the rollout of smarter, AI-powered Tesla vehicles, potentially with greater onboard computing and autonomy.
Economically, the deal strengthens both Tesla's supply chain resilience and Samsung's role in the race to power next-generation AI infrastructure.
Wider supply chains
For Gulf countries that are investing heavily in semiconductors and artificial intelligence, the move underscores the importance of establishing strategic partnerships within the global chip supply chain.
In May, the UAE and US launched the AI Acceleration Partnership, which includes plans for a 5-gigawatt AI campus in Abu Dhabi, known as Stargate UAE.
The agreement enables the UAE to obtain advanced CPUs and GPUs from US companies, which are essential for building up domestic AI infrastructure.
UAE officials said the deal as part of a trusted strategic partnership.
“The UAE welcomes President Trump's AI Action Plan and is ready to fast-track our strategic AI partnership with the US,” Yousef Al Otaiba, UAE Minister of State and ambassador to the US, said last Wednesday.
He added that the UAE is “working closely with leading US companies to adopt and scale American technology in the UAE and beyond.”
World Cup warm-up fixtures
Friday, May 24:
- Pakistan v Afghanistan (Bristol)
- Sri Lanka v South Africa (Cardiff)
Saturday, May 25
- England v Australia (Southampton)
- India v New Zealand (The Oval, London)
Sunday, May 26
- South Africa v West Indies (Bristol)
- Pakistan v Bangladesh (Cardiff)
Monday, May 27
- Australia v Sri Lanka (Southampton)
- England v Afghanistan (The Oval, London)
Tuesday, May 28
- West Indies v New Zealand (Bristol)
- Bangladesh v India (Cardiff)
THE LOWDOWN
Photograph
Rating: 4/5
Produced by: Poetic License Motion Pictures; RSVP Movies
Director: Ritesh Batra
Cast: Nawazuddin Siddiqui, Sanya Malhotra, Farrukh Jaffar, Deepak Chauhan, Vijay Raaz
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
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