Elon Musk is laying out plans for a massive semiconductor factory backed by SpaceX, Tesla and xAI.
In a new announcement, Musk says the Terafab project is a joint venture between his tech companies that has the explicit goal of manufacturing a trillion watts of compute per year.
According to Musk, SpaceX, Tesla and xAI plan to build the largest chip manufacturing facility ever, capable of producing one terawatt per year, by combining logic, memory and advanced packaging under one roof.
“To give you a sense of what we’re talking about, the current output of AI compute is roughly 20 gigawatts per year. This chart explains why we need to build the Terafab, because all of the rest of the output from Earth is about 2% of what we need. So if you add up all the fabs on Earth combined, they’re only about 2% of what we need for the Terafab project.”
Musk says the Terafab project will create two kinds of chips. One type will be optimized for edge inference, which will primarily be used in Tesla vehicles and its humanoid project, Optimus.
Edge inference is the process of running trained AI models directly on local devices or nearby edge servers rather than in a centralized cloud.
The second type of hardware is a high-power chip designed for space that can tolerate the hostile environment, including high-energy ions and photons, as well as electron buildup.
“So I think it’s probably 100 to 200 gigawatts a year of terrestrial chips, and probably on the order of a terawatt of chips in space, just because of power constraints on the ground, is probably how it ends up. Space has the advantage that it’s always sunny. It’s very nice.”
In November, Musk gave hints of the Terafab project when he said that Tesla would ship more AI chips than everyone else combined.
“We expect to build chips at higher volumes ultimately than all other AI chips combined. Read that sentence again, as I’m not kidding.”
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