Intel to collaborate with Elon Musk on Terafab chip project

Intel CEO Lip-Bu Tan announced that the company will work closely with Elon Musk to support the Terafab project. The initiative involves a joint chip development and fabrication effort by SpaceX and Tesla. A photo shows the executives shaking hands last weekend.

Intel CEO Lip-Bu Tan stated on Tuesday that the chipmaker will “work closely” with Elon Musk on the Terafab project. This venture aims to create a 1-terawatt, ultrahigh performance chip-fabrication facility, potentially spanning multiple locations and costing billions of dollars. The project is being jointly developed by SpaceX and Tesla to advance ambitious semiconductor goals tied to artificial intelligence efforts. Intel’s official X account posted a photo last weekend depicting Tan and Musk shaking hands in front of a large Intel sign, signaling the start of their collaboration. The partnership comes amid Musk's push for cutting-edge chip production to support his companies' needs in AI and beyond. Details on Intel’s exact role remain limited, with the facility's scale highlighting its potential significance in the semiconductors industry.

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Illustration of Tesla's Terafab, the largest chip factory, with Optimus robots, solar satellites, and Elon Musk announcing the project.
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Tesla announces massive Terafab chip factory

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Tesla has announced Terafab, described as the largest chip manufacturing facility ever, in collaboration with SpaceX and xAI. The facility aims to produce 1TW of chips per year to support ambitious projects like solar-powered satellites and millions of Optimus robots. Elon Musk stated it requires thousands of acres and over 10GW of power.

Tesla's Terafab chip manufacturing project is set to launch tomorrow, according to a post by Sawyer Merritt. The initiative addresses anticipated supply constraints for advanced chips. Elon Musk has previously highlighted the need for domestic production.

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Building on Elon Musk's February vision of Optimus as the first Von Neumann machine and his recent March 21 statement that Optimus+PV will be the first self-replicating probe in space, Tesla announced Terafab on March 22 as the next step toward becoming a galactic civilization.

Building on 2025 shareholder meeting announcements and ongoing Giga Texas construction, Tesla plans large-scale Optimus production at Fremont later in 2026—replacing Model S and X lines—followed by a higher-capacity Giga Texas factory in 2027. Elon Musk shared updated timelines recently.

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Elon Musk revealed on March 11, 2026, a collaborative Tesla-xAI initiative called Macrohard or Digital Optimus, a real-time AI system to emulate software company operations and automate computer tasks. Powered by xAI's Grok model directing Tesla hardware processing of screen video and inputs, it follows Tesla's $2 billion investment in xAI amid lawsuits, internal shifts, and a SpaceX acquisition.

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