Intel has partnered with SpaceX, xAI, and Tesla to expand Terafab’s chip manufacturing capabilities. The initiative includes two state-of-the-art semiconductor factories based in Texas, designed to produce over one terawatt of AI computing power annually.

For context. running 1 terawatt of AI compute continuously for a year would consume roughly twice the United States’ current annual electricity use.

In light of the news, Intel’s share price has already increased by 5%. 

The chips manufactured are expected to power robotaxis, humanoid robots and data centers in space. Musk has also indicated that the Terafab project will cover every stage of chip manufacturing – from design to production and post-production.

The industry has previously struggled to meet the demands of the evolution of AI, with only a handful of companies possessing the resources to produce chips at scale – Intel being one of them.

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Following a visit from Elon Musk, Intel shared a post on X stating: “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 CEO Lip-Bu Tan has praised Musk for being an industry leader and called Terafab a “step change” in chip manufacturing.