By Adam Spatacco
Publication Date: 2026-10-13 10:30:00
Elon Musk has his eyes set on something that even the world’s largest technology companies have struggled to accomplish: Manufacture advanced artificial intelligence (AI) chips at an unprecedented scale. Surprisingly, Intel (INTC -3.20%) could emerge as one of the biggest beneficiaries of this vision.
Musk’s Terafab project brings together Tesla (TSLA -1.22%) and Space Exploration Technologies (SPCX +0.52%) in an effort to reduce outside dependence on semiconductor manufacturing. For a company trying to turn around its foundry leadership, investors may be underestimating how this could transform Intel in the AI infrastructure era.
Image source: Getty Images.
What is Terafab?
Terafab is a proposed semiconductor manufacturing facility in Grimes County, Texas. So far, Tesla and SpaceX have committed initial investments of $16.8 billion for the first phase of the project. Terfab’s goal is to stitch together chip design, advanced logic and memory manufacturing, and semiconductor packaging within a vertically integrated operation.
Musk’s long-term goal is to produce enough annual chip production to support 1 terawatt of computing power. Terafab aims to produce two categories of processors. The first will power Tesla’s autonomous vehicles, Optimus humanoid robots, and other AI applications operating here on Earth. The second is meant to support SpaceX’s plans for space-based data centers.
Intel could be the hidden winner of Terafab
In April, Intel’s participation in Terafab…
