Announcing from a 75-year-old defunct power station in Austin, Texas on Saturday, tech billionaire Elon Musk launched ‘TERAFAB’- his most ambitious $25 billion chip making plant that aims to achieve “one terawatt of compute power.”
While announcing the launch of TERAFAB– a semiconductor fabrication facility to design and manufacture custom AI chips at large scale, Musk did not give a fixed deadline for the plant to become operational.
The in-house chip manufacturing plant, an ambitious project of Musk, will be operated by his three ventures-Tesla, SpaceX, and xAI. Musk chose the Seaholm Power Plant, a historic plant, that went defunct 30 years ago, to make the announcement.
SpaceXAI + Tesla TERAFAB Project
Goal is a trillion watts of compute/year
Most must necessarily go to space, as US electricity is only 0.5TW https://t.co/hMtg9vNLcw
— Elon Musk (@elonmusk) March 22, 2026
According to Musk, the plan targets to produce 100–200 billion chips per year and eventually 1 terawatt of annual compute power. For context, current global AI compute is roughly 20 gigawatts per year.
Musk claimed that the plan will manufacture chips to power Tesla’s Full Self-Driving and Robotaxi fleet, Optimus humanoid robots, Dojo supercomputers, SpaceX’s Starlink satellites and space data centers, and xAI’s Grok models.
While Musk has not provided a fixed deadline for the project to begin, reports say that the hiring process has already started in xAI. The total estimated cost of the plant would be around $20-25 billion.
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