Intel to help build Terafab, an AI chip fab for SpaceX and Tesla

US chipmaker Intel announced in April 2026 that it will help design and build the Terafab plant in Austin, Texas, a facility that will produce AI chips for two of Elon Musk's companies: SpaceX (recently merged with xAI) and Tesla.

Why Musk wants his own chip plant

Musk needs AI chips to power his plans for a "robot army", the phrase The Verge uses to describe his ambitions in self-driving cars and humanoid robots across several of his companies. Terafab chips will also be needed for the data centers Musk expects to put into space, another step in his plan to move computing infrastructure into orbit. According to The Verge, SpaceX is preparing an initial public offering (IPO) during 2026; the outlet also notes that the company recently formally merged with xAI, Musk's AI startup.

According to another The Verge article cited in the Terafab piece, SpaceX has already announced IPO plans but has not yet disclosed the financial terms of the offering, including the amount to be raised and the company's valuation.

What Intel will build with Terafab

Intel signed an agreement to take part in designing and building a plant meant to close the gap between current AI chip output and future demand. The companies announced the deal in a joint public statement, without disclosing either the project's budget or an exact start date for production at the plant.

"Terafab will close the gap between today's chip production and the demand of the future," the joint statement from

Intel and Terafab says.

The Verge describes Intel's arrival in the project as "landing a key new partner", the phrasing its article on the deal opens with. The article calls the Terafab plant a "sprawling facility", underscoring the scale of the build needed to cover Musk's companies' future demand for AI chips.

• Intel announced the Terafab partnership in April 2026
• The plant is being built in Austin, Texas
• The chips are intended for SpaceX (after its merger with xAI) and Tesla
• Musk plans to use the chips for self-driving cars, humanoid robots and space-based data centers
• SpaceX is preparing an IPO during 2026

What this means

The Intel deal shows that a shortage of AI chip manufacturing capacity is pushing major tech entrepreneurs to build their own plants rather than rely only on outside suppliers. For Musk's group of companies, it means more control over chip supply for several capital-intensive projects, from autonomous cars and robots to orbital data centers. For Intel, taking part in Terafab is a chance to establish itself as an AI chip manufacturing partner for two major Musk companies at once, while one of them, SpaceX, prepares to go public.

The Terafab announcement came as SpaceX prepares for its IPO, planned for 2026: Musk is settling the question of future chip production capacity while getting one of his key companies ready for the stock market.