Intel has announced it will help Elon Musk design and build his massive Terafab project in Austin, Texas. This Terafab is a joint effort involving Musk’s companies like SpaceX, Tesla, and xAI, aiming to produce the specialized chips needed to power various artificial intelligence projects. Musk first revealed the Terafab in March 2026, with an ambitious goal to eventually create a terawatt of computing power annually.
While Tesla and SpaceX have experience with manufacturing in the U.S., building chip fabrication plants, like those Intel operates, is incredibly costly and takes a lot of time. Having Intel handle the actual construction of the Terafab for Musk’s companies makes good sense. Intel stated in its announcement, “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.”
Musk’s venture into chip production is part of a broader strategy to center his diverse companies around artificial intelligence. For instance, Tesla has shifted its focus from just being an electric car company to a robotics company. Similarly, SpaceX is now among several aerospace companies looking to launch AI data centers into space. Further solidifying these AI ambitions, SpaceX also acquired Musk’s AI company, xAI, in February 2026 and reportedly plans to go public soon.
Intel finds itself in a somewhat better position now compared to a year ago. This improvement comes from the launch of its new Intel Core Ultra Series 3 chips and significant investment from the U.S. government in August 2025. However, the company still faces its own challenges. It’s also still working to get two separate chip factories in Arizona running at full capacity, a project it announced back in 2021.
