Intel gets on board with Musk's Terafab project

Intel has announced that it will help Elon Musk design and build his proposed Terafab in Austin, Texas, a joint venture between Musk's companies like SpaceX, Tesla and xAI to manufacture the chips necessary to power various AI projects. Musk announced Terafab in March 2026 with the plan of eventually creating a terawatt of computing power each year.

While Tesla and SpaceX have experience manufacturing in the US, chip fabrication plants like the ones Intel runs are expensive and time-consuming to build. Offloading the task of actually building the Terafab from Musk's companies to Intel makes sense. "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," Intel said in its announcement.

Musk's plan to produce chips is part of a larger refocusing of his various companies around AI. For example, Tesla has gone from an electric car company to a robotics company, and SpaceX is now one of several aerospace companies hoping to launch AI data centers into space. Making those intentions even more clear, SpaceX also acquired Musk's AI company xAI in February 2026 and now reportedly plans to go public.

Intel is in a slightly better position now than it was a year ago thanks to the launch of its new Intel Core Ultra Series 3 chips and direct investment from the US government in August 2025, but the company has plenty of its own issues to iron out. It’s also still working to get two separate chip fabs in Arizona operating at full capacity, a project it originally announced in 2021.