Tesla signs a $16.5 billion chip contract with Samsung Electronics

Deal Highlights - Samsung secured a significant foundry win with Tesla, a $165 billion deal to produce next-generation AI chips [1] - The contract spans 8 years, boosting Samsung's stock [1] - Elon Musk confirmed the deal, naming the chips A16, to be manufactured at Samsung's Taylor, Texas fab [2] - A16 chips will power Tesla's self-driving tech, humanoid robots, and potentially data centers [2] Competitive Landscape - Samsung's chip business has been trailing behind TSMC, the current manufacturer of Tesla's A15 chip [3] - Tesla's choice of Samsung over Intel raises questions [3] - The deal could revitalize Samsung's 2-nanometer ambitions, crucial for AI-powered chips [3] - TSMC and Intel potentially face losses due to this strategic win for Samsung [4] Strategic Implications - The strategic importance of the deal is hard to overstate, according to Elon Musk [2] - Samsung may have offered steep discounts to secure the deal [4]