Tracking the $25B Tesla · SpaceX · xAI chip factory
On March 21, 2026, Elon Musk unveiled TERAFAB — a joint chip-fabrication venture aiming for one terawatt of AI compute a year. This page is a hobbyist explainer, kept up to date with public reporting. It is not run by Tesla.
TERAFAB is a proposed $25 billion semiconductor fabrication project backed by Tesla, SpaceX, and xAI. The pitch is to consolidate nearly every stage of chip production — design, lithography, fabrication, memory, advanced packaging, and testing — under one roof, rather than spreading it across the usual global supply chain.
Musk announced the project at the defunct Seaholm Power Plant in Austin, Texas, calling it "the most epic chip building exercise in history by far." The scale being discussed — over 100 million square feet of planned manufacturing space — would make it one of the largest industrial buildouts in the world if realized as described.
For scale: Tesla's own materials put current annual U.S. power consumption at roughly 0.5 TW — Terafab's stated target is double that, dedicated to AI compute alone.
Musk launches the project publicly at the Seaholm Power Plant in Austin, framing it as a vertically-integrated alternative to relying on external foundries.
Tesla and SpaceX commit $16.8 billion to begin construction of the facility in Texas, per reporting from TechCrunch.
Per Tesla's own site, AI5 powers Full Self-Driving and Optimus — inference-optimized silicon for on-vehicle and on-robot compute.
The next-generation chip earmarked specifically for Optimus, Tesla's humanoid robot line.
Higher-power silicon built for space — intended for SpaceX's orbital, space-based compute ambitions.
If TERAFAB has you curious about Tesla's actual vehicles, here's my personal referral link. It's not connected to this news coverage in any official way — just something I'm including because I run this page.
Disclosure: this is my personal Tesla referral link. If you use it and purchase a vehicle, I may receive rewards or credit from Tesla. This has no bearing on the accuracy of the reporting above.
Everything above is drawn from independent reporting. Read the originals — don't just take a fan page's word for it: