Intel to help build Terafab AI chip plant for SpaceX and Tesla

American chipmaker Intel announced in April 2026 that it will help design and build the Terafab facility in Austin, Texas — a production plant for AI chips for two companies owned by Elon Musk, SpaceX (recently merged with xAI) and Tesla.

Why Musk needs his own chip factory

Musk needs AI chips to power his plans for an "army of robots" — this is how The Verge describes Musk's ambitions for autonomous vehicles and humanoid robots across several of his companies. Additionally, Terafab chips will be needed for data centers that Musk plans to launch into space — another item on his agenda to relocate computational infrastructure to orbit. According to The Verge, SpaceX is preparing for an initial public offering (IPO) during 2026; the publication also notes that the company recently officially merged with xAI — Musk's artificial intelligence startup.

According to another The Verge article referenced in the article about Terafab, SpaceX has already announced plans for an IPO, but so far has not disclosed the financial parameters of the offering — including the amount of capital being raised and the company valuation.

What Intel will build with Terafab

Intel has signed an agreement to participate in the design and construction of a facility intended to close the gap between current volumes of AI chip production and future demand for them. The companies announced the deal in a joint public statement, without disclosing either the project budget or the exact timeframe for launching production at the facility.

"Terafab will close the gap between today's chip production and tomorrow's demand," — states the joint statement from

Intel and Terafab.

The Verge describes Intel's participation in the project as "gaining a key new partner" — this is how the publication's article about the deal begins. The Terafab facility itself is described in the article as a "sprawling facility," emphasizing the scale of the construction needed to meet the future demand for AI chips from Musk's companies.

• Intel announced its partnership on the Terafab facility in April 2026
• The facility is being built in Austin, Texas
• The chips are intended for SpaceX (after its merger with xAI) and Tesla
• Musk plans to use the chips for autonomous vehicles, humanoid robots, and space-based data centers
• SpaceX is preparing for an IPO during 2026

What this means

The Intel deal demonstrates that the shortage of production capacity for AI chips is forcing major technology entrepreneurs to build their own factories rather than rely solely on external suppliers. For the ecosystem of Musk's companies, this means more control over chip supply for multiple capital-intensive projects — from autonomous vehicles and robots to orbital data centers. For Intel, participation in Terafab is a chance to establish itself as a production partner for AI chips for two major technology companies owned by Musk while preparing one of them, SpaceX, for its stock market debut.

The Terafab announcement itself came against the backdrop of SpaceX preparing for an IPO planned for 2026: Musk is simultaneously addressing the issue of future production capacity for chips while preparing one of his key companies for a public listing.