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Musk says Tesla and SpaceX will construct new AI chip facility in Austin

EditorBy EditorMarch 24, 2026No Comments3 Mins Read
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Musk says Tesla and SpaceX will construct new AI chip facility in Austin
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Take a look at what’s clicking on FoxBusiness.com.

Billionaire Elon Musk mentioned that Tesla and SpaceX will construct a complicated chip facility in Austin, Texas, to assist energy the 2 firms’ rising applied sciences amid a scarcity of chips.

“Terafab will technically be two fabs, every making just one chip design,” Musk wrote Sunday in a put up on X. 

Considered one of Terafab’s services can be centered on AI chips for Tesla’s electrical automobiles and Optimus humanoid robots, whereas the opposite can be centered on AI chips for space-based knowledge facilities made by SpaceX. 

Musk mentioned that the Terafab chips can be vital to satisfy his firms’ demand for computing energy that exceeds what it might acquire from suppliers.

AMD CEO SAYS AI DEMAND IS ‘GOING THROUGH THE ROOF’ AS COSTS CLIMB

Elon Musk mentioned that Terafab will give attention to two chip designs: one for Tesla’s EVs and Optimus humanoid robots, and one other for SpaceX’s space-based knowledge facilities. (Aly Tune/Reuters)

“We both construct the Terafab or we don’t have the chips,” Musk mentioned throughout a presentation in an Austin facility on Saturday, including that present international chip manufacturing would meet solely a small fraction of his firms’ future wants.

Musk thanked the businesses’ current chip suppliers, together with Samsung, TSMC and Micron, however mentioned that the demand from his firms would finally exceed whole international chip output, prompting the necessity for the brand new AI chip plant.

ALTMAN CALLS MUSK’S SPACE DATA CENTER PLANS ‘RIDICULOUS’ FOR CURRENT AI COMPUTING NEEDS

Ticker Safety Final Change Change %
TSLA TESLA INC. 380.85 +12.89 +3.50%

Musk additionally mentioned that SpaceX’s AI chip for space-based knowledge facilities might want to have particular traits to resist the atmosphere in area and performance as supposed.

“We want a excessive‑powered chip designed for area that takes under consideration the harsher atmosphere in area, the place you’ve got received excessive energy, excessive power ions, photons, you’ve got received electron construct up,” Musk mentioned, including it could have to function at greater temperatures.

“It is a hostile atmosphere in area,” Musk defined. “You need to optimize it for area, and also you additionally need to usually run it a bit hotter than you’d usually run a chip on Earth to attenuate the radiator mass.” 

NVIDIA LEADS AMERICA’S AI ‘INDUSTRIAL REVOLUTION’ WITH MAJOR MANUFACTURING MOVE

Elon Musk

Musk expects Terafab to vastly increase the manufacturing of AI chips and computing capability. (Marc Piasecki/Getty Photos)

Musk didn’t give a timeline for the brand new challenge. Musk has a monitor file of asserting extremely bold tasks, although a number of have confronted delays or fallen away.

Terafab will finally produce one terawatt of computing capability a 12 months, in contrast with about half a terawatt at present generated throughout the U.S., Musk mentioned.

GET FOX BUSINESS ON THE GO

Reuters contributed to this report.

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