Intel joins Elon Musk’s Terafab AI chip project

Intel has joined Elon Musk’s Terafab AI chip project in Austin, Texas, becoming a partner in the planned semiconductor complex for Tesla and SpaceX.

The company said it will work with Musk’s firms "to design, fabricate, and package ultra-high-performance chips at scale". The processors are expected to power Tesla’s robotics and autonomous systems, as well as SpaceX and xAI infrastructure, including future space-based data centers.

The Terafab project was announced by Musk in late March. The facility is planned as a large-scale chip manufacturing site focused on two categories: processors for robotics and edge computing, and high-performance chips for AI infrastructure.

Intel said its involvement is expected to support Terafab’s target of producing up to 1 terawatt of compute capacity per year.

“Elon has a proven track record of re-imagining entire industries. This is exactly what is needed in semiconductor manufacturing today. Terafab represents a step change in how silicon logic, memory and packaging will get built in the future,” said Intel CEO Lip-Bu Tan.

Intel shares rose about 4% in early trading following the Terafab partnership announcement, before trimming some gains. The news comes as semiconductor manufacturing expands in the U.S., with Intel building two fabs in Arizona and TSMC planning a major chip complex near Phoenix.