Intel has announced a strategic partnership to help Elon Musk design and construct his ambitious Terafab in Austin, Texas. The facility is a joint venture between Musk’s various enterprises, including Tesla, SpaceX, and xAI, dedicated to manufacturing the specialized hardware required for large-scale AI projects.
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First announced in March 2026, the Terafab aims to produce one terawatt of computing power annually. While Tesla and SpaceX maintain extensive manufacturing footprints in the U.S., the specialized nature of semiconductor fabrication is notoriously capital-intensive and complex.
Intel is proud to join the Terafab project with @SpaceX, @xAI, and @Tesla to help refactor silicon fab technology.
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… pic.twitter.com/2vUmXn0YhH
— Intel (@intel) April 7, 2026
By offloading the construction and operational design to Intel, Musk’s companies gain access to established expertise in high-performance silicon. “Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim,” Intel stated, highlighting the facility’s role in advancing future robotics and AI.
The Terafab project underscores a broader transformation across Musk’s portfolio:
See also
- Tesla: Transitioning its primary identity from an EV manufacturer to a robotics firm.
- SpaceX: Exploring the frontier of aerospace by planning the launch of orbital AI data centres.
- xAI: Following SpaceX’s acquisition of xAI in February 2026, the combined entity is reportedly preparing for an initial public offering (IPO).
For Intel, this partnership comes at a pivotal moment. The company has seen a moderate resurgence following the launch of its Core Ultra Series 3 chips and a substantial U.S. government investment in August 2025.
However, Intel still faces significant operational hurdles. The company is currently working to bring two Arizona-based fabrication plants to full capacity—a project plagued by delays since its initial 2021 announcement. Partnering on the Terafab allows Intel to further cement its role as a key player in the domestic “AI-first” manufacturing sector, even as it manages its own internal expansion challenges.
