Intel Joins Musk's $25B 'Terafab' AI Chip Factory Project with SpaceX, Tesla, and xAI

Intel has announced it will join Elon Musk's 'Terafab' AI chip factory project. The $25 billion initiative will see Intel partner with SpaceX, Tesla, and xAI to build a new semiconductor manufacturing facility in Texas. Intel stated on X: '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 announced in March a team-up to develop chips for AI compute, satellites, SpaceX's mooted space data center, and to support autonomous Tesla vehicles and robots. Building a chip fab is one of the most difficult and expensive corporate infrastructure projects, typically requiring years and more than $20 billion. The question of how SpaceX and Tesla, with no semiconductor experience, could execute efficiently has now been answered: Intel will handle the fabrication. Once the leading US silicon producer, Intel has seen rivals Nvidia and AMD take the lead, but has now secured major anchor customers for its foundry business. Intel stock rose more than 3% on the news.