SpaceX, xAI, and Tesla to build large-scale computer chip factory in Texas
At an event this weekend in Austin Elon Musk announced that SpaceX, xAI, and Tesla will a build large-scale computer chip factory in Texas, dubbed Terrafab, designed to produce the chips needed by all three companies.
The “TERAFAB” project is a joint effort involving Tesla, SpaceX and xAI. Musk said the chips will be used in vehicles, Tesla’s humanoid AI robots and for projects in space, including solar-powered AI satellites.
…In a Sunday post on X, Musk clarified that the Austin-area facility is one part of the larger project and will focus on chip design. The main TERAFAB facility, he said, would require thousands of acres, and multiple locations are being considered. Musk said the chip production was necessary to fuel his companies’ growth. On Saturday, he shared an ambitious vision for the future powered by TERAFAB, including billions of robots and interplanetary travel. “We want to be a civilization that expands to the galaxy with spaceships, that anyone can go anywhere they want at any time,” he said. “And have a city on the moon, cities on Mars, populate the solar system and send spaceships to other star systems.”
Essentially, Musk has realized that to build his data centers in orbit and on the Moon, he will a lot of computer chips. Early in the history of SpaceX Musk learned that being dependent on outside contractors was crippling. Too often those contractors saw SpaceX has a competitor and acted to sabotage it. He soon decided his companies must be vertically integrated, doing as much work as possible in-house.
He is now applying that policy in chip production as well.
At an event this weekend in Austin Elon Musk announced that SpaceX, xAI, and Tesla will a build large-scale computer chip factory in Texas, dubbed Terrafab, designed to produce the chips needed by all three companies.
The “TERAFAB” project is a joint effort involving Tesla, SpaceX and xAI. Musk said the chips will be used in vehicles, Tesla’s humanoid AI robots and for projects in space, including solar-powered AI satellites.
…In a Sunday post on X, Musk clarified that the Austin-area facility is one part of the larger project and will focus on chip design. The main TERAFAB facility, he said, would require thousands of acres, and multiple locations are being considered. Musk said the chip production was necessary to fuel his companies’ growth. On Saturday, he shared an ambitious vision for the future powered by TERAFAB, including billions of robots and interplanetary travel. “We want to be a civilization that expands to the galaxy with spaceships, that anyone can go anywhere they want at any time,” he said. “And have a city on the moon, cities on Mars, populate the solar system and send spaceships to other star systems.”
Essentially, Musk has realized that to build his data centers in orbit and on the Moon, he will a lot of computer chips. Early in the history of SpaceX Musk learned that being dependent on outside contractors was crippling. Too often those contractors saw SpaceX has a competitor and acted to sabotage it. He soon decided his companies must be vertically integrated, doing as much work as possible in-house.
He is now applying that policy in chip production as well.










