Elon Musk’s Tesla Drops Dojo, Doubles Down on Samsung For AI Chip Domination
Tesla Shuts Down Dojo, Doubles Down on Samsung for AI Chips
Just when you were wrapping your head around Tesla’s Dojo supercomputer, boom — it’s gone. Yup, Elon Musk has pulled the plug on the ambitious in-house AI chip dream. So, what now? If you’re betting on Samsung stepping in — you’re right on the money. In a power move that feels part business, part chess game, Tesla is now teaming up with Samsung Electronics in a whopping $16.5 billion chip deal. That’s billion with a B — and according to Musk, it’s just the “bare minimum.” The focus now? AI5 and AI6 chips, designed to turbocharge Tesla’s self-driving and AI efforts. “It doesn’t make sense for Tesla to divide its sources and scale two quite different AI chip designs,” Musk posted on X. Translation: all-in on fewer, better chips — and Samsung’s state-of-the-art Texas plant will make it happen. Buckle up, the AI car wars just shifted gears — and you’re in the front seat.
Tesla’s decision to shut down the Dojo project, which launched in 2021 with its D1 chip, underscores a pivot away from internal chip development. Bloomberg reported that Musk reallocated Dojo engineers to projects such as data centers, essentially winding down Tesla’s custom AI training hardware ambitions. With this move, Tesla will rely more on partners like Nvidia, AMD, and particularly Samsung, which now holds a multi-year chip contract with the automaker. This realignment signals a push for faster execution, streamlined designs, and greater manufacturing reliability — areas where Samsung’s foundry and design expertise come into play prominently.
In July, Samsung confirmed it secured a $16.5 billion contract to manufacture Tesla’s next-generation AI6 processors through 2033 at its Taylor, Texas, foundry. This deal stands as Samsung’s largest ever and potentially a gateway to even deeper integration.
Elon Musk noted, “The disclosed figure is just the bare minimum,” hinting at larger volumes and broader collaboration in the future. The two tech titans appear poised to go beyond production, possibly sharing chip design processes — a move considered rare in the semiconductor industry. Musk recently held a video call with Samsung Chair Lee Jae-yong to discuss “what a real partnership would be like.”
Samsung Electronics Chair Lee Jae-yong’s ongoing visit to the United States, which began after the July 29 meeting with business leaders, has fueled speculation of an imminent meeting with Tesla’s top executives. Industry insiders point to a future where foundries like Samsung do more than just manufacture — they co-create. “In the past, foundries only shared processes and manufacturing, but they are now evolving to also share design,” an industry official said. With Samsung’s long-standing expertise in chip design and production, this evolving alliance could reshape how AI chips are developed for self-driving, robotics, and high-compute workloads.
(With Inputs From ANI)
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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