Intel to help build Terafab AI chip plant for SpaceX and Tesla

Intel has announced a partnership with the Terafab project — a large-scale AI chip manufacturing facility under construction in Austin, Texas. The American chipmaker will participate in both the design and construction of the facility. Terafab is being created to provide Elon Musk's two companies with their own AI chips.

The first is SpaceX, which recently merged with xAI, and the second is Tesla. Both require colossal computing power: SpaceX and xAI are developing orbital data centers and language models, while Tesla is developing autopilot systems and humanoid Optimus robots. Musk has long spoken of plans to create an "army of robots": autonomous vehicles and human-like machines capable of performing physical labor.

All of this requires a huge number of specialized AI accelerators. Dependence on third-party suppliers — primarily NVIDIA — has become a bottleneck that Terafab is intended to eliminate. For Intel, the deal is strategically significant.

The company is undergoing a painful restructuring: it changed its CEO, laid off thousands of employees, and is trying to regain its position in the custom semiconductor manufacturing segment. Participation in one of the most ambitious chip projects of the decade — a significant signal to the market that Intel is back in the game. The project timeline is tight.

SpaceX is planning to conduct an IPO this year, which means the infrastructure for scaling computations must be ready in advance. The details of the agreement — the volume of investments, the distribution of roles between Intel and Musk's own engineers — are not yet being disclosed. Terafab could become one of the first examples of vertically integrated AI manufacturing in the US, where the customer controls both chip architecture and their production.

If the project succeeds, it will change the balance of power in the AI infrastructure market — and force NVIDIA, AMD, and other players to reconsider their strategies for working with major customers.