The deal comes as an important lifeline for Samsung’s struggling contract chipmaking division, which has been losing billions. 

With this agreement, the tech giant now has a clearer path to sustainability and renewed relevance in the global semiconductor space.

The South Korean firm had previously faced challenges in securing major clients for its Texas plant, forcing delays and casting doubts over its viability. Now, the site has found purpose.

Samsung confirmed the agreement last week but had withheld the client’s identity due to a confidentiality clause. Tesla CEO Elon Musk, however, made it public in a pair of posts on X. 

“Samsung agreed to allow Tesla to assist in maximising 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,” he stated. In a follow-up, he added, “The $16.5B number is just the bare minimum. Actual output is likely to be several times higher.”

The chips in question, Tesla’s upcoming AI6 processors, are expected to build on the Dojo supercomputer architecture and will support Tesla’s next-gen Full Self-Driving (FSD) system, humanoid robots (Optimus), and AI data centres. 

Production is slated to begin between 2027 and 2028 using Samsung’s advanced 2nm process, which offers 25% better power efficiency and 12% higher performance compared to its 3nm predecessor.

Musk’s unusual level of involvement shows just how critical the AI6 chip is to Tesla’s vision. It also stresses a rare arrangement: a customer directly involved in the operations of a semiconductor foundry. 

This level of collaboration is almost unheard of in the chipmaking world and represents a major vote of confidence in Samsung’s process capabilities, despite its recent setbacks.

Samsung’s foundry division, which focuses on logic chips designed by external clients, posted a staggering loss of over $3.6 billion in the first half of 2025. The loss was attributed to underutilised capacity and the exodus of key clients, many of whom opted for rival TSMC due to superior process technology. 

Market research firm TrendForce estimates Samsung’s foundry market share has plunged to just 7.7%, while TSMC holds a commanding 67.6%.

“This order is quite meaningful,” said Ryu Young-ho, a senior analyst at NH Investment & Securities, pointing to the fact that Samsung’s Taylor plant had “virtually no customers” until now.

The Tesla contract is now Samsung’s largest foundry deal to date, accounting for roughly 7.6% of its annual revenue. Its importance goes beyond commercial value. 

The deal may bolster South Korea’s negotiations with Washington, as the country pushes for deeper tech alliances and exemption from looming 25% U.S. tariffs. It also aligns with the objectives of the U.S. CHIPS Act, which has helped subsidise the expansion of Samsung’s Texas fab.

Analysts believe the deal could help arrest the bleeding in Samsung’s foundry division. Pak Yuak of Kiwoom Securities noted it could reduce losses and provide much-needed credibility at a time when investors and stakeholders have raised concerns about the company’s future in advanced chip production.

TSMC still holds the upper hand technologically and commercially, supplying giants like Apple, Nvidia, and Qualcomm. But the Tesla-Samsung partnership introduces a new dynamic, one where deep collaboration and physical proximity (Musk lives near the Texas plant) could create an edge in speed, customisation, and oversight.

This is Uber’s first autonomous vehicle initiative outside the United States, driving its expansion into self-driving technology.

The initial phase of the service will operate across locations including Saadiyat Island, Yas Island, and routes to and from Zayed International Airport. 

Plans are already in place for wider coverage in the future. Each vehicle in this pilot stage will have a human safety operator to oversee operations, with a fully driverless rollout expected by late 2025.

With this collaboration, Uber is forming partnerships with autonomous vehicle innovators. The company has previously partnered with organisations such as Wayve, Serve Robotics, Aurora Innovation, and Waabi to enhance its presence in sectors like ride-hailing, delivery, and freight. 

Nonetheless, investors are concerned about Uber’s ability to compete with companies directly developing autonomous technology, such as Waymo and Tesla.

Last week, Uber’s stock dropped to nearly 10% following Waymo’s announcement of its upcoming robotaxi service in Miami. 

Analysts believe that while there are disruptions from autonomous vehicles that remain years away, companies like Uber could act as platforms that connect riders to these services.

The Abu Dhabi project will also involve collaboration with Tawasul Transport, a local operator tasked with managing the robotaxi fleet. Neither Uber nor WeRide disclosed the number of vehicles in the initial rollout, but both companies noted that the partnership is designed for gradual scaling.

WeRide, which was recently listed on the Nasdaq, is scaling fast on autonomous mobility. The partnership with Uber adds momentum to its drive while aligning with Abu Dhabi’s vision of integrating advanced technologies into its transportation infrastructure.

CEO Elon Musk is anticipated to focus on the company’s future in self-driving technology and robotaxi services to differentiate Tesla from its competitors and drive investor enthusiasm.

Over the past two years, Tesla has implemented various discounts, price cuts, and financing incentives to clear inventory and maintain sales momentum. These measures, however, have put pressure on the company’s margins. 

In April, Tesla announced a workforce reduction, cutting 10% of its global staff as part of its cost-management efforts.

The upcoming earnings report is expected to reveal a decline in Tesla’s automotive gross margin, excluding regulatory credits, to approximately 16.27% for the April-June period. 

This would mark the lowest margin since early 2019, continuing a downward trend from 16.36% in the first quarter of this year and 18.14% in the same period last year.

Per Reuters, it’s been suggested that the financial impact of Tesla’s discounted financing offers will be felt over time, gradually affecting margins throughout the loan periods. 

Reports also reveal predictions that margins could stabilise by the end of the year and begin to recover in 2025, coinciding with the production ramp-up of the Cybertruck.

Elon Musk had planned to unveil Tesla’s robotaxi on August 8 but recently disclosed a delay until October to incorporate design changes. 

The robotaxi, a huge innovation, could enhance Tesla’s market position if it succeeds in overcoming technical and regulatory challenges.

Despite competition from companies like BYD in China, Tesla’s extensive fleet of vehicles that can potentially be converted to robotaxis gives it a competitive edge in the U.S. market. 

However, experts caution that fully autonomous vehicles may still be years away from gaining regulatory approval.

Investors are keenly awaiting details on Tesla’s self-driving technology strategy. Some believe Tesla’s Full Self-Driving (FSD) system could eventually be licensed to other manufacturers, although regulatory and technical hurdles remain significant.

In April, Tesla announced its focus on introducing new models by early 2025 using existing platforms and production lines. This aims to facilitate development and reduce costs.

Tesla’s delivery numbers for the second quarter exceeded analyst expectations, although they were 5% lower than the previous year. The company needs to deliver nearly one million vehicles in the second half of the year to match its 2023 record of 1.81 million vehicles. 

Analysts predict modest delivery growth for the full year and anticipate a 15% increase in 2025.