Billionaire Elon Musk announced a massive project to produce chips to power his companies, with production beginning at a facility in Austin.
Musk called it “the most epic chip-building exercise in history by far.”
The “TERAFAB” project is a joint effort involving Tesla, SpaceX and xAI. Musk said the chips will be used in vehicles, Tesla’s humanoid AI robots and for projects in space, including solar-powered AI satellites.
Musk launched “TERAFAB” at an event inside the Seaholm power plant downtown on Saturday night. Bright beams of light projected from the building into the sky, prompting questions from Austinites on social media.
Musk said the chip production was necessary to fuel his companies’ growth. He shared an ambitious vision for the future powered by TERAFAB, including billions of robots and interplanetary travel.
“We want to be a civilization that expands to the galaxy with spaceships, that anyone can go anywhere they want at any time,” he said. “And have a city on the moon, cities on Mars, populate the solar system and send spaceships to other star systems.”
These projects require more chips “than all the chip manufacturers in the world combined can provide today,” Tesla said in its TERAFAB announcement on X. “We’re building TERAFAB to close the gap between today’s chip production & the future’s demand – a future among the stars.”
TERAFAB: the next step to becoming a galactic civilization
Together with @SpaceX & @xAI, we’re building the largest chip manufacturing facility ever (1TW/year) – combining logic, memory & advanced packaging under one roof.
To harness as much power as possible from the Sun, we… https://t.co/QYfGR8XsJx
— Tesla (@Tesla) March 22, 2026
Musk said his goal is to produce more than a terawatt, or a trillion watts, of AI computing power per year.
“The current output of AI compute is roughly 20 gigawatts per year,” he said. “All of the rest of the output from Earth is about 2% of what we need.”
Musk also said Gov. Greg Abbott was in the audience Saturday. He thanked Abbott and the state of Texas for their support.
“Thanks Elon. Extraordinary event tonight,” Abbott posted on X afterward. “Your vision is powerful and we are proud of all you do in Texas.”
Musk didn’t share concrete details about the project’s footprint in Austin or the timeline for construction or production. KUT News has reached out to Tesla and SpaceX for answers.
Multiple job openings under TERAFAB on Tesla’s website show roles based in Austin and Palo Alto, California.
Austin Business Journal reported that the TERAFAB facility would be by the Tesla Gigafactory, and that construction work was visible near the site last week.
