Musk confirms $16.5 bn alliance with Samsung: 'Spoke with Lee via video call'

Elon Musk isn’t leaving any room for doubt when it comes to Tesla’s multibillion-dollar chip deal with Samsung Electronics Co.

The Tesla CEO revealed on Tuesday that he held a video call with Samsung Electronics Chairman Lee Jae-yong and the company’s top brass to hash out the specifics of their deepening partnership — a rare public confirmation of top-level talks behind the $16.5 billion long-term wafer fabrication deal announced a day ago.

In a post on his social media platform X, Musk responded directly to a user who had cast doubt on Samsung’s understanding of the deal, sarcastically suggesting the South Korean tech giant had “no idea what they signed up for.”

“They do,” Musk fired back. “I had a video call with the chairman of Samsung and their senior execs to discuss exactly what the partnership will entail. We’re going to leverage both companies’ strengths to achieve something truly great.”

The comments come just days after Musk stunned the chip industry by disclosing that Samsung will manufacture Tesla’s next-generation AI6 chips at its advanced new foundry in Taylor, Texas — a strategic win for Samsung’s struggling foundry division.

Musk’s remarks follow his earlier post confirming the tie-up, calling Samsung’s Texas facility a “dedicated fab for Tesla’s AI6 chip” and adding that “the strategic importance of this is hard to overstate.”

He also hinted that the $16.5 billion figure — roughly 7.6% of Samsung’s 2024 revenue — could be just the beginning: “That’s just the minimum. Actual production volumes could end up being several times higher.”

The deal is already being seen as a watershed moment for Samsung’s foundry business, giving the company a much-needed credibility boost in its race against market leader TSMC.

Meanwhile, Chairman Lee, also known as Jay Y. Lee, departed for the US on July 29  in what sources say is a trip to propose additional investments in its foundry facility in Texas as part of a government-led package deal aimed at reducing or averting US tariffs ahead of the Washington-set Aug. 1 deadline.

Write to Min-Sung Hong at mshong@hankyung.com

Jennifer Nicholson-Breen edited this article.