TEXAS – Tesla plans to launch its ambitious Terafab project – a large-scale facility dedicated to the production of artificial intelligence chips – within the next seven days, according to statements made by company CEO Elon Musk. The project, a joint venture between Tesla, SpaceX, and xAI, aims to dramatically increase Tesla’s capacity for producing the specialized hardware needed to power its autonomous driving technology and robotics initiatives.
Musk revealed the timeline for Terafab’s launch on his social media platform, stating the project’s goal is to achieve “one trillion watts of computing/year.” This scale, he noted, necessitates locating a significant portion of the project’s infrastructure in space due to limitations in existing U.S. Power grids, which currently total 0.5 terawatts.
The move comes as Tesla accelerates development of its full self-driving (FSD) software and prepares for the production of its Optimus humanoid robots. Tesla estimates that 100-200 gigawatts of power will be required solely for the manufacturing of Optimus robots, with additional terawatts needed for AI-powered satellites. According to Tesla, this demand surpasses the current and projected 2030 production capacity of all global semiconductor manufacturers combined.
Tesla is currently developing its fifth-generation AI chip, dubbed AI5, designed to outperform chips produced by NVIDIA in both performance and cost. The company has been actively recruiting AI chip designers in South Korea to aid in the creation of these high-performance chips. While Tesla previously considered partnerships with established semiconductor companies like Intel, no formal agreements were reached.
Currently, Tesla relies on partnerships with Taiwan Semiconductor Manufacturing Co., Ltd. And Samsung Electronics Co., Ltd. For the production of its AI chips. However, Musk has repeatedly emphasized the demand for Tesla to internalize more of its chip production to ensure a sufficient supply and maintain control over its technology roadmap. During last year’s annual shareholder meeting, Musk stated, “Even when we extrapolate the best-case scenario for chip production from our suppliers, it’s still not enough.” He added, “We probably need to build a giant chip factory.”
Musk has also expressed confidence in Tesla’s potential to turn into a leading developer of artificial general intelligence (AGI), suggesting the company could be among the first to achieve this milestone, potentially in a humanoid or “atom-forming” form. The Terafab project is seen as a critical step in realizing these ambitions.
