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Tesla and SpaceX to build world's biggest chip facility in Texas

Economy & businessEconomy
Tesla and SpaceX to build world's biggest chip facility in Texas
Key Points
  • Elon Musk announced a Tesla-SpaceX joint venture to build the world's biggest chip facility in Texas.
  • The $20 billion TeraFab project aims to massively boost AI chip production for vehicles and space.
  • Early production is set for next year, with mass production by 2028, amid unclear funding and regulatory details.

According to The Independent, the joint venture is called the TeraFab project. The Independent reports that the TeraFab project is expected to cost at least $20 billion. The Independent states that the TeraFab project aims to manufacture 50 times the number of AI chips that all of the world's major companies currently produce annually.

Production will begin at the site of Tesla's headquarters in Austin, Texas, according to The Independent. The Independent reports that the facility will produce two types of chips: one for Tesla's self-driving vehicles, robotaxis, and Optimus humanoid robots, and another specially designed to withstand the harsh conditions of space. The exact technical specifications of the two types of chips to be produced have not been disclosed.

The lowest-cost place to put AI will be in space, and that will be true within two years, maybe three at the latest.

Elon Musk, Tech billionaire

Elon Musk has set an aggressive timeline for TeraFab, with early production scheduled to begin next year and mass production in 2028, The Independent states. The Independent reports that the two-year timeframe for TeraFab is more ambitious than the industry standard, where semiconductor production typically takes three years to set up. How the TeraFab project's timeline compares to similar initiatives by competitors like Nvidia or Amazon remains unclear.

Elon Musk has previously spoken of his ambition to create AI data centres in low-Earth orbit, citing potential lower costs and higher efficiency compared to ground-based setups, according to The Independent. ' SpaceX recently filed plans with the US Federal Communications Commission (FCC) to establish a satellite data centre network, The Independent reports. What specific regulatory approvals are required for the TeraFab project beyond the FCC filing is not yet known.

In order to understand the universe, you must explore the universe.

Elon Musk, Tech boss

Nvidia CEO Jensen Huang unveiled an initiative last week to help build AI data centres in space, according to The Independent. Amazon and Blue Origin founder Jeff Bezos has said orbital data centres could solve electricity demand constraints on Earth, The Independent states. How the TeraFab project will be funded beyond the estimated $20 billion cost has not been detailed.

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