Elon Musk launches Terafab, unveils ‘most epic’ AI chip factory for Tesla and SpaceX

Elon Musk has embarked on the “most epic chip-building exercise in history” with the launch of “Terafab”. The new initiative will be a joint venture between Tesla and SpaceX and has begun with an advanced manufacturing facility in Austin, Texas. Musk claims the new facility is the only one in the world to have the entire chip-making lifecycle under one roof, including memory, packaging, testing, and manufacturing of lithography masks.

Speaking at a recent event, Musk announced the new facility to solve what he described as a looming shortage in AI compute. “We either build the Terafab or we don’t have the chips… and we need the chips, so we’re going to build Terafab.”

“We’re very grateful to our existing supply chain, to Samsung, TSMC, Micron, and others. We would like them to expand as quickly as they can, and we will buy all of their chips,” Musk said at the event. “I have said these exact words to them, but there is a maximum rate at which they’re comfortable expanding. That rate is much less than we would like.”

Musk noted that the Terafab facility will focus on developing two distinct classes of chips. The first will be designed for Tesla vehicles and the Optimus humanoid robot and will be ‘optimized for edge inference’.

The second class of chips will be designed for space and will be made to handle ‘hostile environments’ and run hotter than terrestrial chips.

The world’s richest man says that the Terafab project is aimed at making chips that support 100 to 200 gigawatts of computing power on Earth, along with a terawatt in space.

Musk wants to take AI beyond Earth

Musk also reiterated his plan for getting AI compute off the planet and noted that the cost of deploying AI in space will ‘drop below the cost of terrestrial AI’ sooner than what people expect.

“I think it may be only 2 or 3 years before it is actually lower cost to send AI chips to space than it is on the ground,” Musk said.

“As soon as the cost to orbit drops… it immediately makes extremely compelling sense to put AI in space. It becomes a no-brainer basically,” he added.

Notably, this is not the first time that the billionaire has talked about taking AI beyond Earth. Musk merged AI startup xAI with SpaceX earlier in the year with the aim of moving data centres to space.