Tesla has signed a $16.5 billion deal with Samsung to produce its new AI6 chip at the South Korean company’s semiconductor plant in Taylor, Texas. The facility, which is under construction, is expected to begin operations in 2026.

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The Taylor plant is located close to Austin, where Tesla’s headquarters moved in 2021 after Elon Musk relocated there the previous year. In a post on X, Musk said he would personally visit the Samsung facility to oversee production.

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“This is a critical point, as I will walk the line personally to accelerate the pace of progress,” Musk wrote. “And the fab is conveniently located not far from my house.”

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Musk also said Samsung has agreed to allow Tesla to assist in maximising manufacturing efficiency, reflecting the hands-on approach he has become known for in managing his companies.

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The AI6 chip is expected to play a key role in Tesla’s next generation of vehicles and autonomous driving systems. By partnering with Samsung, Tesla aims to secure a reliable supply of advanced semiconductors as competition intensifies in the electric vehicle market.

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Samsung’s deal with Tesla marks a significant win for its foundry business, which has been competing with Taiwan Semiconductor Manufacturing Company (TSMC) for global market share. Shares in Samsung Electronics rose by nearly 7% in New York trading following news of the deal.

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Musk’s decision to personally monitor the chip production echoes his previous “founder mode” approach at Tesla, where he has been closely involved in manufacturing operations during key periods. He famously spent nights on the factory floor during Tesla’s Model 3 production ramp-up in 2018.

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While neither Tesla nor Samsung commented further on the terms of the agreement, the move highlights the strategic importance of semiconductor production to Tesla’s growth plans.

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The partnership also underscores broader industry shifts as companies look to diversify supply chains and secure domestic production capabilities for critical components.

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