SMRTR TechMar 22, 2026Teslarati

Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry

SMRTR summary

Elon Musk unveiled TERAFAB, a $20-25 billion joint venture between Tesla, SpaceX, and xAI that aims to produce 70% of current global chip leader TSMC's output. The factory will produce AI chips for Tesla vehicles and robots, but 80% of its computing power will support space-based orbital AI satellites that leverage solar energy and vacuum cooling to run cheaper than Earth-based data centers. This consolidates Musk's companies into a vertically integrated operation addressing anticipated chip supply shortages within three years.

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