Why Elon Musk is Building AI Chip Factories for Tesla | EV Magazine

Tesla EVs are equipped with xAI's Grok AI assistant and the company's work on robotaxis and Optimus, a humanoid robot, also make use of AI. The initiative falls under Terafab, a partnership between xAI, Tesla and SpaceX.

Intel Joins Musk's Terafab AI Chip Project with SpaceX, Tesla, xAI

•Terafab, announced March 21, 2026, aims to produce up to 1 terawatt of AI compute per year via a full‑stack chip fab in Austin for both terrestrial and space use—Tesla, SpaceX, xAI are confirmed partners (en.wikipedia.org)

Tesla Gigafactory Texas employment fell 22% in 2025

In late March, Musk announced Tesla and SpaceX plan to build a chip manufacturing plant dubbed “Terafab,” kicking the project off with an advanced technology fab on the Gigafactory Texas campus.

Tesla D3 Chip Targets Space for Massive AI Compute

At a landmark TERAFAB event in Austin, Elon Musk outlined a 10-year chip roadmap that will underpin the shared ambitions of Tesla, xAI, and SpaceX. While attention centered on the forthcoming AI5 and AI6 processors destined to power millions of robotaxis and Optimus humanoid robots, another highly specialized design quietly appeared in presentation slides and a lunar mass-driver video: the D3.

SpaceX satellite breakup highlights concerns over ‘megaconstellation’

Last month, Musk announced SpaceX and Tesla are building what he says will be the world’s largest chip manufacturing plant. The first phase of the project dubbed Terafab will be near Tesla’s Gigafactory outside Austin. The interest in the data center industry comes as SpaceX prepares for its initial public offering.

Musk’s Terafab plans seen having limited impact on TSMC By Investing.com

The bank estimates that developing an initial 100,000 wafer-per-month capacity could require more than $60 billion in capital expenditure. Even at full utilization, Terafab’s production costs are expected to exceed those of TSMC’s advanced nodes, with wafer costs potentially 30% to 50% higher.

Elon Musk’s Terafab: The $25 Billion Gamble to Dominate the Chip Industry | AI News

Building Terafab, a $20‑25 billion semiconductor fabrication facility, involves overcoming substantial obstacles related to equipment and expertise. One of the primary challenges is securing the critical advanced manufacturing equipment essential for semiconductor production. Among these, Extreme Ultraviolet (EUV) lithography machines, primarily supplied by ASML, are not only costly but also have extensive backlogs, complicating Tesla and SpaceX's plans for an accelerated timeline as discus