Musk over the weekend officially announced Terafab – a joint project of Tesla $TSLA, SpaceX and xAI estimated at $20–25 billion, which is set to build chip factories in Austin the likes of which the world has not yet seen. One line will produce chips for Tesla cars, robotaxis and Optimus robots, the other will make specially hardened chips for SpaceX’s satellite data center in low Earth orbit – and the entire complex is expected to eventually produce 1 terawatt of computing power per year, roughly twice the current capacity of the entire US.

Key motivation: on Tesla’s Q4 earnings call, Musk admitted that TSMC, Samsung and Micron have hit the ceiling of their expansion and his companies will surpass them in 3–4 years – so Terafab is, in his view, a necessity rather than an option. That’s a reasonable argument, but at the same time this is a project where Musk has no background in chip manufacturing, he hasn’t released any production timeline and the announcement so far lacks a clear start date – which is nothing new for him.