Musk says Tesla, Samsung Electronics sign $16.5 billion chip supply deal

Tesla CEO Elon Musk said the U.S. automaker had signed a $16.5 billion deal to source chips from Samsung Electronics, a move expected to bolster the South Korean tech giant's loss-making contract manufacturing business, Reuters reported.

Samsung shares rose more than 6% after the news, according to Reuters.

"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 said in a post on X on Monday.

"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," Musk said on his social media platform.