Intel stock jumps after it joins Elon Musk’s Terafab chip-building moonshot

Elon Musk’s chipbuilding megaproject has a new partner: Intel.

The US chipmaker said on Tuesday it would join SpaceX, xAI, and Tesla to help build Terafab, an ambitious plan to construct a series of enormous semiconductor fabs to produce chips for robotaxis, humanoid robots, and solar-powered data centers in Space.

“Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab’s aim to produce 1 terawatt a year of compute to power future advances in AI and robotics,” Intel wrote in a post on X.

Intel’s share price was up as much as nearly 5% in early trading, before paring some of those gains.

The company posted an image of Musk with Intel CEO Lip-Bu Tan, and said that Musk had visited Intel over the weekend.

The chip giant said it would help Musk’s companies “refactor” silicon fab technology, but did not provide further details on the partnership.

In a statement posted on X, Tan hailed Musk’s “proven track record” of reimagining entire industries and called Terafab a “step change” in chip manufacturing.

“This is exactly what is needed in semiconductor manufacturing today,” he wrote.

At the unveiling of the Terafab project last month, Musk said it would be a joint venture between Tesla and SpaceX, which now includes his AI startup, xAI.

The billionaire said Terafab would produce high-volume semiconductors for Tesla’s robotaxis and Optimus robot, and a specialized chip optimized for space that will be used for SpaceX’s network of up to a million AI data centers in orbit.

Building semiconductor fabs is famously difficult, with only a handful of companies, including TSMC and Intel, possessing the specialist resources to produce chips at scale.

That’s without accounting for the unprecedented scale and complexity of Musk’s Terafab plan, which aims to produce 1 terawatt of AI compute per year. Running 1 terawatt of AI compute continuously for a year would consume roughly twice the United States’ annual electricity use.

Musk has also said Terafab will bring together every stage of chip design, production, and validation, and also produce logic and memory chips in the same facility, which deviates from industry norms and offers additional challenges.

Those challenges are unlikely to deter the Tesla CEO, who told investors in January that current semiconductor suppliers simply could not make enough chips to fuel the company’s ambitious plans for autonomous vehicles and humanoid robots.

“I know fabs are really hard, I don’t think they’re easy, but we do a lot of hard things,” Musk said.