Key Takeaways:
Intel joined Terafab, a chip factory project led by Elon Musk.
The goal is to produce more than 1 terawatt of AI computing power every year using advanced 2nm technology.
Based in Austin, Texas, this $25 billion project will handle everything from design to final in one location.
This partnership will help Tesla and SpaceX get the chips they need for Optimus robots and space missions without relying on suppliers.
A Partnership for Global AI Power
Intel confirmed a partnership with Elon Musk’s Terafab project. This came after Musk visited Intel’s offices last weekend. Terafab is a plan to build the brains for future technology. The world makes a small fraction of the chips Musk needs for his AI and space missions. This partnership between Tesla, SpaceX, xAI, and Intel aims to fix that supply problem.
Intel is proud to join the Terafab project with @SpaceX, @xAI, and @Tesla to help refactor silicon fab technology.
Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 TW/year of compute to power… pic.twitter.com/2vUmXn0YhH
— Intel (@intel) April 7, 2026
Making Chips for Tesla and Optimus
Terafab isn’t a normal factory, it is a hub located in Austin, Texas. Terafab will manage the entire life of a chip, including design, manufacturing, and testing with a cost of about $20 to $25 billion. The factory will use 2nm technology, which is the most advanced in the world. The goal is to make millions of AI5 chips for Tesla’s self driving cars and the Optimus humanoid robot.
Intel will join the project to help improve how these chips are made. By using Intel’s long experience in manufacturing and packaging, Terafab can reach the goal of 1 terawatt of compute power faster. This deal proves that Musk isn’t trying to build everything alone, he is using Intel’s skills to make the process more reliable.
Terafab will manage the entire life of a chip
By building everything in Texas, Musk and Intel are challenging the firms in the global market. The goal is no longer just to make chips for smartphones, but to build the infrastructure for a future where AI and robots are part of daily life.
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From Robots to Space Data Centers
Beyond Tesla cars, Terafab will play an important role in the future of SpaceX. The factory will produce special chips that can survive in space and power orbital data centers. This will support Musk’s vision of a future where humans live on more than one planet.
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