Elon Musk announces ‘Terrafab’ project, will produce own AI chips to service Tesla, SpaceX's lofty space computing goals

Elon Musk on Saturday announced that his rocket making company SpaceX and electric vehicle major Tesla will jointly run a new chip manufacturing facility in Austin, Texas, AFP reported.

The chips will be for use in artificial intelligence projects, robotics and data centres for space, with aim to produce 1 terawatt of computing power per year, it added, citing Musk. (1 terawatt = ¬1 trillion watts).

Why is Elon Musk starting his own chip manufacturing facility?

The world's richest man said the so-called “Terafab” was necessary because Tesla and SpaceX's demand for computing power is expected to far exceed that of global chip suppliers. While he did not disclose how much initial investment is being made, reports pegged the initial infusion between $20-25 billion, it added.

“We're very grateful to our existing supply chain, to Samsung, TSMC, Micron, and others... but there's a maximum rate at which they're comfortable expanding. That rate is much less than we would like... and we need the chips, so we're going to build the Terafab. The advanced technology fab in Austin will have the facilities to design, manufacture, test and improve each chip,” Musk said.

Elon Musk's chip ‘Terrafab’ — All we know

• The project aims to make chips to support 100 to 200 GW of computing power on Earth, and 1 TW in space.
• Musk did not share a timeline for the production or output. The AFP report noted that the billionaire has many times in the past announced timelines that his companies failed to meet, i.e. robotaxis, SDF, etc.

• According to Musk, the Terafab would ultimately help humanity become a “galactic civilisation” capable of harnessing the resources of other planets and stars.
• A Bloomberg report added that Musk has said previously that the facility would produce 2 nanometer chips.
• It added that the Austin facility is expected to make two types of chips, one of which will be optimised for edge and inference, primarily for his vehicle, robotaxi and Optimus humanoid robots.

• The other will be a high-power chip, designed for space that could be used by SpaceX and xAI. Musk said he expects xAI to use the vast majority of the chips, it added.
• Musk also unveiled a speculative rendering of a future “mini” AI data center satellite with 100 kW power. This is part of a larger installation he wants SpaceX to build to do complex computing in space.
• In January, SpaceX requested a license from the Federal Communications Commission (FCC) to launch one million data center satellites into orbit around Earth. “We expect future satellites to probably go to the megawatt range,” Musk added.

(With inputs from AFP and Bloomberg)