Elon Musk Floats ‘Terafab’ as Tesla’s Next Big AI Chip Bet

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Elon Musk is plotting Tesla’s next big leap beyond cars: building its own “terafab,” a chip manufacturing plant designed to fuel the company’s growing AI ambitions.

Speaking at Tesla’s 2025 Annual Shareholder Meeting, Musk said global supply from partners like TSMC and Samsung may not be enough to meet Tesla’s AI chip needs. He floated the idea of a “gigantic chip fab” to secure Tesla’s AI supply, calling chips and electricity the company’s main constraints ahead.

Taking chipmaking into its own hands

Musk said Tesla’s long-term strategy is to control every layer of its AI hardware, from chip design to production. He told shareholders ...