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Tesla Signs AI Chip Deal With Samsung · Elon Musk Podcast

• 0:01
  Hey everybody. Welcome back to the Elon Musk
• 0:04
  Podcast. This is a show where we discuss
• 0:07
  the critical crossroads that shape SpaceX, Tesla X, The
• 0:11
  Boring Company, and Neurolink. I'm your host, Will Walden.
• 0:18
  Just when you thought that Elon Musk couldn't shock you anymore,
• 0:23
  Tesla has just locked in a major chip deal with Samsung, which
• 0:28
  deepens Elon Musk's effort to reshape his companies around AI
• 0:33
  as opposed to Tesla vehicles. Now they signed a new contract
• 0:37
  with Samsung for next Gen. chips.
• 0:39
  According to multiple reports and also confirmed by Samsung in
• 0:43
  a public statement, this is the first time that Tesla has
• 0:46
  publicly committed to a major external chip supplier for
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  upcoming AI and autonomous driving hardware.
• 0:53
  So why is Tesla turning to Samsung for chips though?
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  Because Elon Musk says he's in founder mode again, and he's
• 1:00
  directing his energy toward what he views as Tesla's next crucial
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  phase, transforming it into a dominant force in AI.
• 1:09
  Tesla has relied mostly on its in house Full Self driving
• 1:13
  hardware, but this new deal indicates the company needs more
• 1:16
  specialized silicon to keep pace with its software rivals.
• 1:21
  Now, Samsung confirmed it will manufacture Tesla's new chips
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  using its four nanometer fabrication process, which is
• 1:28
  one of the most advanced in the world.
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  Samsung's 4 nanometer tech allows for higher transistor
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  density, better power efficiency and improved performance.
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  Now, the chips will be billed at Samsung's factory in South
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  Korea, and Samsung said the chips are part of Tesla's
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  Hardware HW-5 Hardware 5 platform, the next generation
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  after the currently shipping HW-4.
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  The powers Tesla's latest Autopilot and FSD systems.
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  Now, Tesla hasn't provided a timeline for when HW-5 will
• 2:00
  launch, but internal documents show that it is being designed
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  to handle larger AI workloads needed for Tesla's Robotaxi
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  platform and Optimus humanoid robot.
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  By tapping Samsung's chip making division, Tesla will also bypass
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  the oncoming backlog faced by TSMC, the world's leading chip
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  manufacturer, which handles contracts for Apple, NVIDIA, and
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  AMD. Now, Musk has publicly expressed
• 2:27
  frustration with Nvidia's supply chain, specifically calling out
• 2:30
  the limited availability of each 100 GPU's.
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  While Tesla uses NVIDIA hardware in his Dojo supercomputing
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  projects, the custom chips from Samsung will give Tesla more
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  control over its FSD road map. This aligns with Musk's recent
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  pivot to centralized Tesla's AI stack around vertically
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  integrated technology. Now, Samsung stock rose nearly
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  5% on news of the Tesla contract, making it one of the
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  best performers in South Korea's Kospi index on Monday.
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  Investors viewed the deal as validation of Samsung's
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  aggressive mood into foundry services work, a piece directly
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  with TSFC. Now.
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  Samsung has struggled to win high profile contracts outside
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  of mobile and consumer electronics, and Tesla offers
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  the company a powerful new customer and AI now.
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  Elon's decision to secure external chip supply also shows
• 3:23
  that Tesla's growing hardware needs.
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  Then it shifts from cars to infrastructure and AI.
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  In recent months, Tesla has scaled up his Dojo
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  supercomputer, which processes massive data sets for FSD
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  training. Tesla said last year it planned
• 3:38
  to spend more than a billion dollars on Dojo, with much of
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  the budget going toward custom chips and data centers.
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  And while Tesla has long claimed it leads in the AI race through
• 3:49
  software, its hardware has been pretty laggy behind NVIDIA and
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  AMD, whose chips dominate training workloads in data
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  centers. A Tesla's new chips will not
• 4:00
  replace Nvidia's for general AI training, but they will be
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  optimized for inference tasks inside vehicles and robots or
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  power efficiency and latency matter more than raw compute.
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  Samsung the Samsung deal said the contract covers a multi year
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  supply agreement and the Samsung has already begun very early
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  production of these chips and they're expected to be taped out
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  later this year, meaning they're nearing final design and ready
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  for mass production. Tesla could begin integrating
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  the new hardware into vehicles sometime in 2026.
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  The early prototypes may appear sooner for testing.
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  Samsung's manufacturing process at 4 nanometers has seen several
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  improvements in yield, according to internal metrics reported by
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  the company earlier this year. These improvements helped
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  convince Tesla the Samsung's process has become competitive
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  with TSMCS, and Tesla's chip design team will still control
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  the chip architecture, while Samsung will acts as a foundry.
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  Tesla's pivot to more complex chip design also places it more
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  directly in competition with other AI firms, many of which
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  already designed their own ASICS chips.
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  That's application specific integrated circuits for machine
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  learning. Google has tensor processing
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  units or Tpus, and Amazon uses custom Tranium chips.
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  Tesla now joins that group with the Samsung manufactured HW-5.
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  Now the chip deal gives Samsung a major foothold in automotive
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  semiconductors market it has sought to enter more deeply over
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  the past decade. Most of Samsung's revenue has
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  historically come from memory chips and mobile processors, but
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  the company has increased investment in AI hardware and
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  auto components. Working with Tesla provides the
• 5:48
  scale and the visibility to build momentum in both areas.
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  Now, Tesla remains very secretive about HW-5.
• 5:58
  We don't know any specifications, but there is
• 6:01
  some documents floating around. They've been obtained by supply
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  chain analysts and it suggests that the chip will support
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  faster neural network processing, real time
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  environmental modelling and also improved compute per Watt for
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  onboard systems. Now these enhancements are
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  critical for any future roll out of fully autonomous vehicles,
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  which Musk continues to promise despite years of delays.
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  Now this contract doesn't guarantee the Tesla will launch
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  robo taxi or Optimus at a large scale anytime soon, but it
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  removes a major hardware bottleneck.
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  Tesla now has a dedicated source for high end chips, reducing its
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  reliant on over stretched GPU vendors and giving it more
• 6:49
  control over its product timeline.
• 6:52
  Hey, thank you so much for listening today.
• 6:54
  I really do appreciate your support.
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  yourselves and each other. And I'll see you tomorrow.