TERAFAB is designed to consolidate every stage of semiconductor production under one roof, including chip design, lithography, fabrication, memory production, advanced packaging, and testing.  At full capacity, the facility would scale to roughly 70% of the global output from the current world’s largest semiconductor foundry from Taiwan Semiconductor Manufacturing Company (TSMC).

Elon Musk’s stated goal is one terawatt of computing power annually, split between Tesla’s AI5 inference chips for vehicles and Optimus robots, and D3 chips built specifically for SpaceXAI’s orbital satellite constellation.

Tesla Terafab set for launch: Inside the $20B AI chip factory that will reshape the auto industry

The logic behind the merger of these three entities is rooted in a supply chain crisis Musk has been signaling for over a year. At Tesla’s Q4 2025 earnings call, he warned investors that external chip capacity from TSMC, Samsung, and Micron would hit a ceiling within three to four years. “We’re very grateful to our existing supply chain, to Samsung, TSMC, Micron and others,” Musk acknowledged at the Terafab event, “but there’s a maximum rate at which they’re comfortable expanding.” Building in-house was, in his framing, not a strategic option, but a necessity.

The space angle is where the announcement becomes genuinely unprecedented. Musk said 80% of Terafab’s compute output would be directed toward space-based orbital AI satellites, arguing that solar irradiance in space is roughly 5x greater than at Earth’s surface, and that heat rejection in vacuum makes thermal scaling viable. This directly feeds the SpaceXAI vision, which is betting that within two to three years, running AI workloads in orbit will be cheaper than doing so on the ground. The satellites, powered by constant solar energy, would effectively turn low Earth orbit into the world’s largest data center.

Will Tesla join the fold? Predicting a triple merger with SpaceX and xAI

Historically, this announcement threads together every major Musk initiative of the past two years: the xAI-SpaceX merger, Tesla’s $2.9 billion solar equipment talks with Chinese suppliers, the 100 GW domestic solar manufacturing push, the Optimus humanoid robot program, and Starship’s development. TERAFAB is the capstone that ties them into a single coherent architecture — chips made on Earth, launched by SpaceX, powered by Tesla solar, run by xAI, and ultimately extended to the Moon.

“I want us to live long enough to see the mass driver on the moon, because that’s going to be incredibly epic,”Musk said during the presentation.

Announcing TERAFAB: the next step towards becoming a galactic civilization https://t.co/IDKey07mJa

— Tesla (@Tesla) March 22, 2026

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Tesla first confirmed Terafab on its January 28, 2026 earnings call, where Musk told investors the company needs to build a chip fabrication facility to avoid a supply constraint projected to materialize within three to four years. But the seeds were planted even earlier. At Tesla’s annual general meeting last year, Musk warned that even in the best-case scenario for chip production from their suppliers, it still wouldn’t be enough, and declared that building a “gigantic chip fab” simply had to be done.

While there has been no official announcement on where Tesla plans to break ground on the massive Terafab, all signs point to the North Campus of Giga Texas in Austin.

Months of speculation has surrounded Tesla’s North Campus expansion at Giga Texas, where drone footage captured by observer Joe Tegtmeyer revealed massive construction site preparation just north of the existing factory on a scale that rivals the original Giga Texas footprint itself.

Samsung’s Tesla AI5/AI6 chip factory to start key equipment tests in March: report

The project is projected to produce 100–200 billion AI and memory chips annually, targeting 100,000 wafer starts per month, at an estimated cost of $20 billion. Tesla is targeting 2-nanometre process technology and anticipated to be the most advanced node currently in commercial production. Dubbed the Tesla AI5 chip, the chip will pack 40x–50x more compute performance and 9x more memory than AI4, and will be among the first products Terafab factory is set to produce. This highly optimized, and massively powerful inference chip is designed to make full self-driving (FSD) and Tesla’s Optimus robots faster, safer, and with full autonomy.

(Credit: Tesla)

This is where Terafab becomes a genuine game-changer. If Tesla successfully builds a 2nm chip fab at scale, it becomes one of only a handful of entities that’s capable of producing AI silicon in-house, with competitive implications that extend far beyond Tesla’s own vehicles, and potentially positioning Tesla as a chip supplier or licensor to other industries.

Credit: @serobinsonjr/X

The next-gen Tesla AI chips will power advancements in Full Self-Driving software, the Cybercab Robotaxi program, and the Optimus humanoid robot line. Musk’s projections for Optimus require chip volumes that no existing external supplier can commit to on Tesla’s timeline.Competitors like Waymo and GM’s Cruise remain dependent on third-party silicon, leaving them exposed to the same supply chain vulnerabilities Tesla is now working to eliminate entirely.

The Terafab launch this week may not mean a factory opens its doors overnight, but it signals Tesla is serious about owning the entire AI stack, from software to silicon.

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The Korean company is partnering with both Kia and Incheon International Airport for the testing phase, which was launched with a memorandum of understanding (MOU). The pilot program is going to be used to lay the groundwork for future robot use for EV charging.

Incheon already has a reputation that aligns with the pilot program as it has the largest eco-friendly vehicle infrastructure in Korea, according to Korea JoongAng Daily, which first reported the launch of the pilot program.

Hyundai is partnering with Kia’s Robotics Lab to provide hardware and software solutions for this early rollout.

Yan Hee-won, President of Hyundai Motor’s R&D Division, said:

“This marks an important turning point in validating the practical value of future mobility technologies. With customized automatic charging solutions, we aim to deliver a more convenient and enhanced mobility experience for users.”

The testing phase will be limited in the sense that the charging robot will be deployed for a fleet of eco-friendly airport vehicles. Those who park their EVs at the airport will not be able to use it for use while they’re traveling — at least at first.

Eventually, it will become a great way to give vehicles range while the owners are off on trips.

Tesla had a similar idea several years ago, which it shared viral videos of back in 2015.

Tesla “snake charger” wasn’t just a creepy one-off, suggests Elon Musk

Musk said in 2020 that Tesla still had the intention of making it. However, it has shifted to wireless induction charging, which seems to be a better option simply because of fewer moving parts and better compatibility with the upcoming Robotaxi fleet.

Tesla flexes Robotaxi wireless charging — autonomy from top to bottom

Tesla displayed its wireless charging idea at the “We, Robot” event last year:

Robotaxi wireless charging

No hands required pic.twitter.com/XL746DkGhb

— Tesla (@Tesla) October 18, 2024

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Panasonic aims to boost profit by over $966 million by March 2027 through cost cuts and its new employment structure. By 2029, the company seeks to see another $966 million boost in profit.

Panasonic has many products in different sectors, from home appliances to lithium-ion batteries for EVs like Tesla. The Osaka-based company wants to streamline its businesses with low growth potential, such as its TV operations. It also plans to change its employment structure.

“There may be other options besides a sale. A part of me can’t help but get sentimental about our TVs,” commented Chief Executive Officer Yuki Kusumi.

Kusumi wants to see more significant changes made in Panasonic. In a recent interview, the CEO of Panasonic noted that the company plans to integrate AI tech across operations with help from Anthropic to boost AI-related revenue. For instance, Panasonic has focused on AI data centers to increase profit.

The Teslarati team would appreciate hearing from you. If you have any tips, contact me at maria@teslarati.com or via Twitter @Writer_01001101.

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Analysts on Wall Street have routinely recognized Tesla as an automotive stock play, but over the past few years, debate about what exactly the company should be characterized as has heightened.

Tesla is probably most known for its cars, but investors and those who follow the company closely know that it also operates an Energy division. It also has skin in the artificial intelligence game and in software.

Despite its prowess in a number of sectors, analysts are still debating on whether to categorize Tesla stock as strictly an automotive play or whether it should be characterized as a tech company across multiple disciplines.

D.A. Davidson analyst Gil Luria said that Tesla should be looked at, for the time being, as an automotive company due to its revenue. Tesla makes most of its revenue, more than 90 percent, he mentioned in a note he wrote to investors and should be looked at as an automotive company (via Yahoo Finance):

“If it looks like a duck (>90% of revenue from cars) and quacks like a duck (>90% of profits from cars) it might just be a duck (a car company),” Luria wrote in his note. He added, “Don’t @ me.”

Other analysts disagree. Deutsche Bank’s Edison Yu says Tesla is more than an automotive company, and believes the long-term outlook should be focused on the fact that it is involved heavily in various sectors.

Looking at Tesla as an automotive company is viable in the short term, but Yu believes there is a long-term synopsis of Tesla that needs to include its other ventures:

“At the core, we do not see Tesla as an automaker but rather a technology platform attempting to reshape multiple industries, deserving of a unique type of valuation framework.”

In July, Baird analyst Ben Kallo said that Tesla Energy will start to have more impact on the stock and the company’s makeup overall. Tesla reported a record energy storage deployment in Q2, marking the potential start of a new narrative moving forward.

Tesla bears officially have their next big threat: Tesla Energy

Even Elon Musk himself advised investors to look at Tesla past the automotive division. Despite the company’s reputation with cars, which is undoubtedly strong and disruptive, Musk knows that in the long term, the company will have more opportunities than just building EVs.

He said in 2019 that the energy side, along with solar, would outpace the automotive side regarding value:

“I think both over time will grow faster than automotive. They’re starting from a smaller base…I think, especially, if you look at…year-over-year growth, it will be absolutely incredible…over the course of, say, a year, gigantic increase.”

I’d love to hear from you! If you have any comments, concerns, or questions, please email me at joey@teslarati.com. You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

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In a post on X on Monday, Musk said that California bill SB 1047 should “probably pass,” amidst arguments in Silicon Valley over whether the AI safety bill could hamper development of the technology or is a necessary safeguard.

“This is a tough call and will make some people upset, but, all things considered, I think California should probably pass the SB 1047 AI safety bill,” Musk wrote. “For over 20 years, I have been an advocate for AI regulation, just as we regulate any product/technology that is a potential risk to the public.”

SpaceX & X HQ will move to Texas after new CA bill passes

SB 1047 would require some of the largest AI models—those that cost at least $100 million—to be developed with mandatory reporting for intelligence safety issues, as well as requiring them to submit reports assessing the risks associated with their models. The bill would also form a new agency in California, dubbed the Frontier Model Division (FMD).

“As AI technology continues its rapid improvement, it has the potential to provide massive benefits to humanity. We can support that innovation without compromising safety, and SB 1047 aims to do just that,” said Senator Scott Wiener (D-San Francisco), who co-authored the bill. “By focusing its requirements on the well-resourced developers of the largest and most powerful frontier models, SB 1047 puts sensible guardrails in place against risk while leaving startups free to innovate without any new burdens.”

The bill has officially passed the California Assembly Appropriations Committee and will now advance to the Assembly floor for a final vote. If it passes, it will cross Governor Gavin Newsom’s desk who would need to sign the bill into law before the end of the month.

CalMatters shared some details on the bill last week, which you can read here.

Musk has warned about AI safety before, saying to legislators last September that AI could pose a “civilizational risk” if not regulated.

Interestingly, the bill was opposed by OpenAI, the firm run by Musk rival Sam Altman. In an open letter written by OpenAI’s Chief Strategy Officer Jason Kwon last week, the executive said the bill would slow innovation, and push developers out of California.

“The AI revolution is only just beginning, and California’s unique status as the global leader in AI is fueling the state’s economic dynamism,” Kwon said (via MSN), chief strategy officer at OpenAI, wrote in the letter. “SB 1047 would threaten that growth, slow the pace of innovation, and lead California’s world-class engineers and entrepreneurs to leave the state in search of greater opportunity elsewhere.”

RELATED:

Elon Musk lawsuit against OpenAI and CEO Sam Altman gets revived

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LGES’ AI-powered battery design system has been trained in 100,000 design cases based on the company’s data from the past 30 years. A representative of LGES informed local media that the company’s AI-powered battery design system ensures clients receive high quality designs consistently and at a relatively fast pace. 

“The biggest advantage is that cell design can be achieved at a consistent level and speed, regardless of the designer’s proficiency.”

Battery design usually takes a significant amount of time and the designer’s proficiency is crucial to the process. A battery cell’s design often takes a few iterations to meet the client’s desired specifications. LGES’ AI-powered battery designer streamlines the process. 

“By incorporating AI technology into cell design, which determines battery performance, we will provide overwhelming product competitiveness and differentiated customer value,” noted LGES Chief Digital Officer Jinkyu Lee. 

Battery cell designs play a significant role in modern society. As more consumers consider driving electric vehicles (EVs), the automobile market alone will heavily depend on the battery sector. A few automakers have already started dabbling in EV battery production with specifications favorable to their vehicle designs.

If you have any tips, contact me at maria@teslarati.com or via X @Writer_01001101. 

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The Milken Institute think tank is holding its annual global conference in Santa Monica, California, this week, and Musk was interviewed by the group’s Chairman, Michael Milken, on Monday. During the interview, Milken presented several of Musk’s past quotes as prompts, to which Musk could respond and sometimes expand on things he has discussed in the past.

Like many of his interviews, the topics were somewhat wide-ranging, though they included many of the things he has been outspoken about in the past: his thoughts on humanity, education, SpaceX and Starlink, the need to make humans multi-planetary, aliens, merit-based economy, AI, birth rates, and still more.

Elon Musk thinks we’ll have AI smarter than any one human by next year

The interview begins with Milken saying that the original title of the panel discussion was “How To Save The Human Race, and Other Light Topics.”

He then dives into an 11-year-old clip of Musk talking about the things he thought would have the biggest impact on humanity, to which the billionaire listed many of the things his companies cover today: the internet, sustainable energy including solar power and electric vehicles (EVs), and humanity becoming multi-planetary.

“Life cannot be about solving one thing or another. There have to be things that move your heart and make you excited to wake up in the morning,” Musk said, expanding on his prior quote. “And I think becoming a spacefaring civilization is one of those things.”

“If you ask kids anywhere in the world, like ‘what are some of the most inspiring things,’ like a five-year-old, six-year-old anywhere in the world, they’re going to gonna say space exploration is one of those things,” Musk added.

Notably, Musk also said that SpaceX uses nearly no AI in its operations, while he also later clarified some of his reasoning for why he wants humanity to become multi-planetary:

“Well, if you don’t become a multi-planet civilization, then you’re then you’re simply waiting around until you die from a self-inflicted wound or from some natural disaster like the dinosaurs got hit by a meteorite or something,” Musk said.

“Eventually, something like that is going to happen if you wait around long enough, the sun will expand to Earth and will be incinerated so that for sure is gonna happen.”

Along with discussing themes like editing the human genome (which he doesn’t necessarily suggest humanity does), and concerns surrounding the world’s falling birth rate, Musk also discussed AI—a topic he’s familiar with through both his work at Tesla and his newest company, xAI.

Regarding AI, he reiterated themes he recently spoke about at the Breakthrough Prize awards on making these systems as truthful as possible, even at the risk of being politically incorrect.

“I’ve thought about AI safety for a very long time, and I think you want to have a maximum truth-seeking AI. This is very important,” Musk explained. “They should not be taught to lie. It should not be taught to say things that are not true. Even if those things are politically incorrect, it should still say those what it believes to be true.”

He then compared the technology to the film 2001: A Space Odyssey, saying that (spoiler), part of the movie’s point was that HAL 9000 ended the astronauts’ lives because it had been forced to lie.

You can watch the full interview with Musk below.

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The 10th annual Breakthrough Prize Ceremony, often called the “Oscars of Science,” was held Academy Museum of Motion Pictures in Los Angeles on Saturday night, including Musk and a number of other celebrities from the sciences and Hollywood.

During his appearance on the red carpet, Musk was asked by one YouTuber what the greatest breakthrough he hoped for during our lifetime would be. Unsurprisingly, Musk noted that making life multiplanetary was one, while the continued development of AI was another.

While he warned once again that it was possible that AI could eventually kill us all, he also reiterated recent statements that he believes we’ll have AI smarter than any one human by the end of next year, adding the importance of training AI to be as truthful as possible. He notes that this is crucial, even if that truth is unpopular, and he says he’s hopeful that AI will eventually foster humanity, rather than destruction, through this approach.

He also gave the example of Galileo, saying that AI at his time would also believe that the sun revolved around the Earth, since that was what most (not Galileo) believed at the time. Musk went on to note that AI must both know the truth and be able to say the truth, even if it was unpopular.

You can see this under-two-minute interview with Musk below, courtesy of the YouTube channel Music & Medicine.

In another interview, Musk also joked to Variety reporters that we could see an AI win the presidency by 2032, after laughing off a question about who would win the U.S. Presidential election this year.

Who will win the U.S. presidential election in 2024? Elon Musk weighs in from the carpet at the Breakthrough Prize ceremony. pic.twitter.com/qnw8k5jHVy

— Variety (@Variety) April 14, 2024

The event included a number of presenters, including Robert Downey Jr., Kim Kardashian, Regina King, Brie Larson, Rob Lowe, Alicia Keys, Venus Williams, Michelle Yeoh, and others, still. The board for the Breakthrough ceremony is also made up of Meta CEO Mark Zuckerberg, entrepreneur Yuri Milner, 23andMe Founder and co-founder of Breakthrough, Anna Wojcicki, and board chair Huda Yahya Zoghbi.

It also handed out awards in four separate categories, the winners of which can be seen below:

• Breakthrough Prize in Mathematics
  • Simon Brendle (contributions to geometry)
• Breakthrough Prize in Fundamental Physics
  • John Cardy and Alexander Zamolodchikov (contributions to statistical physics, quantum field theory)
• New Horizons in Physics Prize
  • Michael Johnson and Alexandru Lupsasca (contributions to black hole photon ring studies, and detection experiments)
  • Mikhail Ivanov, Oliver Philcox and Marko Simonović (contributions to large-scale universe structure and new galaxy survey tools)
  • Laura M. Pérez, Paola Pinilla, Nienke van der Marel and Til Birnstiel (contributions to dust trap predictions, modeling and discovery)
• Breakthrough Prize in Life Sciences
  • Carl H. June and Michael Sadelain (contributions to immunotherapy development)
  • Sabine Hadida, Paul Negulescu and Fredrick Van Goor (contributions to transformative drug combinations for those with cystic fibrosis)
  • Thomas Gasser, Ellen Sidransky and Andrew Singleton (discovery of risk genes for Parkinson’s disease)

The full Breakthrough Ceremony video will be released on YouTube on April 21, and you can watch it here.

Tesla increasing compensation for AI team: Elon Musk

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On Monday, Musk spoke on a Spaces call with Nicolai Tangen, founder of Norwegian hedge fund AKO Capital, about a range of topics, especially focusing on AI, space exploration and a few details about Tesla—like its path into the automotive market in India.

Interestingly, Musk said that he thinks humans will probably have AI that’s smarter than any one human by the end of next year, while he believes that the total amount of compute power of AI will exceed all humans in five years.

“My guess is that we’ll have AI that is smarter than any one human, probably, by the end of next year,” Musk said. “The total amount of, sort of, sentient compute of AI, I think will probably exceed all humans in five years.”

The AI compute growth chart says it all https://t.co/Lj2o4CfVN8

— Elon Musk (@elonmusk) April 8, 2024

Musk also said that xAI plans to have Grok 1.5 finished by May, and that it will be better than OpenAI’s ChatGPT-4. However, like the above and many of Musk’s other claims, it’s worth taking his timelines with a grain of salt as he also announced that Grok 1.5 would be coming “next month” in January.

Along with predictions for AI and xAI’s plans, he also pointed to the need for a regulatory division to monitor the rapid growth of the AI sector, though he says the technology is already progressing at a rate that’s too fast for any regulatory agency to keep up with. He also echoed recent warnings about AI being programmed to be too politically correct, citing Google’s Gemini AI as an example.

“But I do have a comment for what I think is very important for achieving safe AI, which is that it’s very important to train the AI to be as truthful as possible,” Musk added. “I think you can get some very dangerous things when you program an AI to be politically correct.”

“I think that things may seem relatively innocuous now, but will not be so in the future if AI has immense power. You can take the Google Gemini example where it refused to produce a picture of George Washington as a white man, and any impact, any historical figure, would automatically be made diverse, because it’s been programmed to insist on diversity.

Which sounds you know, perhaps okay at first, but not if the AI has so much power that it can actually enforce diversity and decide there’s too many of one kind of people, or too many of one sex, and just kill off enough until the diversity numbers is what is programmed to believe is correct.”

You can listen to the full Spaces call here on X.

Musk has warned about some of the risks of AI in the past, calling it a potential “civilizational risk” in September and even talking to Israel Prime Minister Benjamin Netanyahu about AI concerns later that month.

Last July, Musk launched xAI as a rival to OpenAI, and the company debuted Grok as its first product in November. Musk in February filed a lawsuit against OpenAI for abandoning its open-source, non-profit mission, and last month xAI went on to officially make Grok’s model weights open-source.

Tesla increasing compensation for AI team: Elon Musk

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