Intel joins Elon Musk’s Terafab AI chip project to power humanoid, data centre goals

BENGALURU – Intel said on April 7 that it will join Mr Elon Musk’s Terafab AI chip complex project with SpaceX and Tesla to make processors powering the tech billionaire’s robotics and data centre ambitions.

Intel’s shares jumped nearly 3 per cent after the announcement. The company also posted a photo of chief executive Tan Lip-Bu and Mr Musk shaking hands, saying it hosted the world’s richest man at its campus over the past weekend.

The announcement comes months after Mr Musk laid out plans for Tesla to build a massive artificial intelligence chip fab to power the electric vehicle maker’s autonomous ambitions, and suggested the company could work with Intel.

Intel’s capabilities will help accelerate Terafab’s goal of producing one terawatt per year of compute for future advances in AI and robotics, the company said in a post on social media platform X.

“Elon has a proven track record of re-imagining entire industries,” Mr Tan said in a separate post. “This is exactly what is needed in semiconductor manufacturing today. Terafab represents a step change in how silicon logic, memory and packaging will get built in the future.”

In March, Mr Musk said his rocket company SpaceX – which recently merged with his social media and AI firm xAI – and Tesla would build two advanced chip factories at a sprawling facility in Austin, Texas.

One facility would power cars and humanoid robots, while the other would be designed for AI data centres in space, Mr Musk had said.

Meanwhile, SpaceX has confidentially filed for a US initial public offering, setting the stage for what could become the largest stock market listing on record. The company is targeting a market launch later in 2026.

Intel’s turnaround bearing fruit

For Intel, which had lagged its rivals in the AI race, the partnership is set to boost investor confidence as its turnaround efforts gather steam. The company’s finances have improved as it witnesses increased demand for its processors.

“Intel needs to show it can support the largest customers with their most important projects, and that seems to be the case with the Tesla partnership,” said D.A. Davidson analyst Gil Luria, calling it an “important step” in the chipmaker’s restructuring.

Mr Tan, who has led Intel for more than a year, is pursuing an aggressive restructuring to repair the chipmaker’s finances, including via job cuts and asset sales.

The firm has also received billions of dollars in investments from Nvidia and the US government, which is now its biggest shareholder. REUTERS