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Reading: Musk says Tesla, SpaceX, xAI chip challenge to kick off in Texas | Fortune
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Asolica > Blog > Business > Musk says Tesla, SpaceX, xAI chip challenge to kick off in Texas | Fortune
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Musk says Tesla, SpaceX, xAI chip challenge to kick off in Texas | Fortune

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Last updated: March 23, 2026 2:23 am
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7 hours ago
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Musk says Tesla, SpaceX, xAI chip challenge to kick off in Texas | Fortune
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Elon Musk stated his Terafab challenge — a grand plan to finally manufacture his personal chips for robotics, synthetic intelligence and house information facilities — can be in-built Austin and collectively run by Tesla and SpaceX.

Musk, the chief govt officer of each firms, stated he’ll begin off with an “advanced technology fab” in Austin that may have all the tools essential to make chips of any type, and check them. Musk, who has no background in semiconductor manufacturing and a historical past of over-promising on objectives and timelines, had stated earlier than that the corporate will begin with a smaller scale fab earlier than shifting to a much bigger one.

Musk has stated the semiconductor business is shifting too gradual to maintain up with the provision of chips he expects to wish, even because the business will increase output.

“That rate is much less than we’d like,” Musk stated. “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab.” Musk’s challenge would name for at some point supporting a terawatt of computing energy per yr, the quantity he expects the businesses to finally use as he ramps up his investments in AI and robotics.

Musk detailed some particular plans, together with producing chips that may help 100 to 200 gigawatts a yr of computing energy on Earth, and chips that may help a terawatt in house, however gave no timelines for the ability or its output.

Musk has stated beforehand that the ability would produce 2 nanometer chips. The challenge seems to be deliberate for an space close to Tesla’s present Austin headquarters and gigafactory, primarily based on a photograph proven throughout the presentation.

Learn Extra: Why the AI Increase Will Make Telephones, Vehicles, Gadgets Extra Costly

Many executives have expressed nervousness a couple of scarcity of chips — notably reminiscence chips — throughout the race to construct computing energy for AI. However it’s uncommon to strive constructing them. Bringing semiconductor services on-line usually takes tens of billions {dollars} and requires the acquisition of advanced machines from a number of suppliers. Factories can take years to turn into absolutely operational.

Musk made the announcement in a downtown Austin venue to an viewers that included Texas Governor Greg Abbott. If it will definitely succeeds, the challenge may assist elevate Texas’ standing as a chipmaking hub. Tesla already has an settlement with Samsung facility close to Austin on upcoming chips. The EV firm additionally has present suppliers, together with Taiwan Semiconductor Manufacturing Co. and Micron Know-how Inc. that Musk says are additionally not in a position to meet all the corporate’s wants as Tesla pivots its focus to robotics, autonomous driving and AI.

The ability is predicted to make two sorts of chips, one among which can be optimized for edge and inference, primarily for his automobile, robotaxi and Optimus humanoid robots. The opposite can be a high-power chip, designed for house that might be utilized by SpaceX and xAI. SpaceX acquired xAI in February, with the latter working as an entirely owned subsidiary. Musk stated he expects xAI to make use of the overwhelming majority of the chips.

Learn Extra: Will Placing AI Information Facilities in House Really Work?

Throughout the presentation, Musk additionally unveiled a speculative rendering of a future “mini” AI information heart satellite tv for pc, one piece of a a lot bigger satellite tv for pc system that he desires SpaceX to construct to do advanced computing in house. In January, SpaceX requested a license from the Federal Communications Fee to launch a million information heart satellites into orbit round Earth.

Musk stated that the mini satellite tv for pc he revealed would have the capability for 100 kilowatts of energy.

“We expect future satellites to probably go to the megawatt range,” Musk stated.

Learn Extra: SpaceX Weighs Confidential IPO Submitting as Quickly as March 

The presentation additionally included a few of Musk’s loftier ambitions. He confirmed an animation of how SpaceX may doubtlessly launch satellites from the floor of the moon, and reiterated his imaginative and prescient for a future crammed with “amazing abundance” — one thing he has been touting in current months.

“The future I want to see: I want us to live long enough to see the mass driver on the moon,” Musk stated, referring to the contraption that will launch satellites from the lunar floor, “because that’s going to be incredibly epic.”

The ability announcement comes as Tesla more and more works with xAI and SpaceX on synthetic intelligence initiatives. Tesla has already been working with xAI on a challenge known as Digital Optimus or Macrohard, and Tesla additionally sells its megapack batteries to xAI. Tesla has additionally built-in xAI’s chatbot, Grok, into a few of its automobiles. In January, Tesla introduced a $2 billion funding into xAI and a framework settlement for the businesses to work collectively. 

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