Intel gets on board with Musk's Terafab project

Intel https://x.com/intel/status/2041501301318766866?s=20" target="_blank">has announced that it will help Elon Musk design and build his proposed https://terafab.ai/" target="_blank">Terafab in Austin, Texas, a joint venture between Musk's companies like SpaceX, Tesla and xAI to manufacture the chips necessary to power various AI projects.

Musk https://www.engadget.com/science/elon-musk-announces-terafab-project-he-claims-will-be-the-largest-chip-manufacturing-facility-ever-171718545.html" target="_blank">announced Terafab in March 2026 with the plan of eventually creating a terawatt of computing power each year.

While Tesla and SpaceX have experience manufacturing in the US, chip fabrication plants like the ones Intel runs are expensive and time-consuming to build.

Offloading the task of actually building the Terafab from Musk's companies to Intel makes sense. "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 future advances in AI and robotics," Intel said in its announcement.

Musk's plan to produce chips is part of a larger refocusing of his various companies around AI. For example, Tesla has gone from an electric car company to https://www.engadget.com/transportation/evs/tesla-is-killing-off-its-model-s-and-x-cars-to-make-robots-010621101.html" target="_blank">a robotics company, and SpaceX is now https://www.engadget.com/science/space/blue-origin-also-wants-to-put-ai-data-centers-in-space-115614142.html" target="_blank">one of several aerospace companies hoping to https://www.engadget.com/science/space/spacex-wants-to-launch-a-constellation-of-a-million-satellites-to-power-ai-needs-175607771.html" target="_blank">launch AI data centers into space.

Making those intentions even more clear, SpaceX also https://www.engadget.com/ai/elon-musks-spacex-has-acquired-his-ai-company-xai-221617040.html" target="_blank">acquired Musk's AI company xAI in February 2026 and now https://www.engadget.com/big-tech/spacex-has-reportedly-filed-for-the-biggest-ipo-in-history-154547537.html" target="_blank">reportedly plans to go public.

Intel is in a slightly better position now than it was a year ago thanks to the launch of its new https://www.engadget.com/computing/ces-2026-intel-hopes-its-core-ultra-series-3-chips-are-the-start-of-a-comeback-000155611.html" target="_blank">Intel Core Ultra Series 3 chips and https://www.engadget.com/big-tech/the-us-government-is-taking-an-89-billion-stake-in-intel-205047795.html" target="_blank">direct investment from the US government in August 2025, but the company has https://www.cnbc.com/2026/01/22/intel-intc-earnings-report-q4-2025-.html" target="_blank">plenty of its own issues to iron out.

It’s also still working to get two separate chip fabs in Arizona operating at full capacity, a project it https://www.engadget.com/intel-7nm-2023-meteor-lake-213933055.html" target="_blank">originally announced in 2021.