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Musk says Tesla and SpaceX will construct new AI chip facility in Austin

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Last updated: March 24, 2026 1:28 pm
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Published: March 24, 2026
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Musk says Tesla and SpaceX will construct new AI chip facility in Austin


Try what’s clicking on FoxBusiness.com.

Billionaire Elon Musk mentioned that Tesla and SpaceX will construct a sophisticated chip facility in Austin, Texas, to assist energy the 2 corporations’ rising applied sciences amid a scarcity of chips.

“Terafab will technically be two fabs, every making just one chip design,” Musk wrote Sunday in a submit on X. 

Certainly one of Terafab’s amenities will likely be centered on AI chips for Tesla’s electrical automobiles and Optimus humanoid robots, whereas the opposite will likely be centered on AI chips for space-based information facilities made by SpaceX. 

Musk mentioned that the Terafab chips will likely be crucial to fulfill his corporations’ demand for computing energy that exceeds what it will possibly receive from suppliers.

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Elon Musk mentioned that Terafab will give attention to two chip designs: one for Tesla’s EVs and Optimus humanoid robots, and one other for SpaceX’s space-based information facilities. (Aly Music/Reuters)

“We both construct the Terafab or we don’t have the chips,” Musk mentioned throughout a presentation in an Austin facility on Saturday, including that present international chip manufacturing would meet solely a small fraction of his corporations’ future wants.

Musk thanked the businesses’ present chip suppliers, together with Samsung, TSMC and Micron, however mentioned that the demand from his corporations would finally exceed whole international chip output, prompting the necessity for the brand new AI chip plant.

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Ticker Safety Final Change Change %
TSLA TESLA INC. 380.85 +12.89 +3.50%

Musk additionally mentioned that SpaceX’s AI chip for space-based information facilities might want to have particular traits to face up to the surroundings in area and performance as supposed.

“We want a excessive‑powered chip designed for area that takes under consideration the harsher surroundings in area, the place you’ve got received excessive energy, excessive vitality ions, photons, you’ve got received electron construct up,” Musk mentioned, including it might have to function at increased temperatures.

“It is a hostile surroundings in area,” Musk defined. “You need to optimize it for area, and also you additionally need to usually run it a bit of hotter than you’d usually run a chip on Earth to reduce the radiator mass.” 

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Elon Musk

Musk expects Terafab to vastly increase the manufacturing of AI chips and computing capability. (Marc Piasecki/Getty Pictures)

Musk didn’t give a timeline for the brand new mission. Musk has a monitor document of asserting extremely bold initiatives, although a number of have confronted delays or fallen away.

Terafab will finally produce one terawatt of computing capability a 12 months, in contrast with about half a terawatt at present generated throughout the U.S., Musk mentioned.

GET FOX BUSINESS ON THE GO

Reuters contributed to this report.

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