US nchipmaker Intel has joined Elon Musk’s ambitious “Terafab” project, a mega semiconductor initiative aimed at powering next-generation artificial intelligence (AI), robotics and data infrastructure, Reuters reported.
The collaboration brings together Intel with Musk-led firms including SpaceX, Tesla and xAI, in a bid to manufacture high-performance chips at an unprecedented scale. According to Reuters, the project seeks to support Musk’s expanding ambitions in autonomous vehicles, humanoid robots and space-based AI systems.
Intel said its expertise in chip design, fabrication and advanced packaging would help accelerate Terafab’s goal of producing one terawatt of compute annually — a scale far beyond current industry output. A company statement noted that its ability to build “ultra-high-performance chips at scale” would be central to achieving this target, Reuters reported.
The Terafab initiative, first outlined by Musk earlier this year, envisions building large, vertically integrated chip manufacturing facilities in Austin, Texas. One facility is expected to focus on chips for electric vehicles and humanoid robots, while another would support AI data centres, including potential space-based systems.
The move comes as Musk has expressed concerns that existing global chipmakers may not be able to meet the surging demand from his companies. Terafab is therefore designed to reduce dependence on external suppliers and enable faster innovation cycles in AI hardware.
For Intel, the partnership marks a strategic boost amid its ongoing turnaround efforts. The company has been restructuring operations under CEO Lip-Bu Tan, including cost cuts and asset sales, while seeking to regain competitiveness in the fast-growing AI semiconductor market.
Investor sentiment appeared positive, with Intel’s shares rising following the announcement, reflecting confidence in the potential of the collaboration. While details of Intel’s precise role remain limited, the tie-up signals a convergence of major technology players seeking to reshape the future of chip manufacturing. As Reuters noted, Terafab represents an attempt to rethink semiconductor production at scale to meet the demands of AI-driven industries.
