Intel has joined Elon Musk’s $20 billion Terafab project in Texas as the chipmaker announced their involvement on social media platform 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,” Intel wrote. Furthermore, the post included a photo of Intel CEO Lip-Bu Tan shaking hands with Musk in front of an Intel sign.

The company also noted that it had been “fun” hosting Musk at Intel over the weekend. Musk officially noted plans to build the semiconductor plant in Austin, Texas late last month. Moreover, he asserted that once complete, the facility will be the largest chip making facility of its kind. The site is set to be adjacent to Tesla’s headquarters and run as a joint venture between the automaker and SpaceX. Various semiconductor plant projects are advancing across the United States such as the Bosch semiconductor plant in Roseville, California.

Outlook on the Terafab Project in Austin, Texas

Once complete, the Terafab project in Austin Texas is expected to produce chips for space data centers, advanced vehicles and humanoid robots. The idea was first floated by Musk at an annual shareholder meeting in November last year. At the time, Musk said that if Tesla was to extrapolate the best-case scenario for chip production from its suppliers, it still would not be enough.

Because of this, it led him to propose the Tesla Terafab. He noted “its like giga but way bigger.” In the same month, he also floated the possibility of working with Intel on the project. “We haven’t signed any deal, but it’s probably worth having discussions with Intel,” he added. In January, Musk said that his team would be aiming for a nine-month production cycle for its semiconductors.

This is three months less than the yearly cadence Nvidia and AMD work to when producing their AI accelerators. Tesla has previously designed its own chip, the Dojo D1. It was built to process videos from its cars and train its autonomous fleet, and had been slated for use in the company’s Optimus humanoid robot. However, the Dojo team was dissolved in August 2025 with Tesla focusing on deploying existing chips from other vendors.

Project Overview

• Project Name: Terafab Project
• Project Type: Semiconductor manufacturing facility
• Estimated Cost: $20bn
• Purpose: AI, robotics, and advanced chip production
• Status: Advancing

Key Stakeholders

• Lead: Elon Musk
• Partners: Tesla, SpaceX
• New Entrant: Intel
• CEO (Intel): Lip-Bu Tan

Location

• Site: Austin, Texas
• Country: United States
• Proximity: Near Tesla headquarters

Scope

• Large-scale chip fabrication plant
• High-performance AI chip production
• Target: ~1 TW/year compute output
• Supports robotics and space tech

Funding / Delivery Model

• Joint venture (Tesla–SpaceX)
• Strategic partnership with Intel
• Privately funded megaproject

Status

• Stage: Early development
• Update: Intel participation confirmed
• Next: Detailed planning and execution

Key Risks & Challenges

• Execution at extreme scale
• Technology integration
• Aggressive production timelines
• Supply chain complexity

Strategic Significance

• Major AI chip manufacturing push
• Reduces reliance on external suppliers
• Supports robotics and autonomous systems
• Positions U.S. in advanced semiconductor race