Elon Musk Unveils Ambitious Terafab Plans For Tesla, SpaceX: 'We're Starting A Galactic Civilization'

Tesla Inc. (NASDAQ:TSLA) and SpaceX CEO Elon Musk on Saturday unveiled plans for the Terafab project, a joint venture between the two companies that is aimed at transforming chip manufacturing for space and AI applications. According to Musk’s announcement, the Terafab will integrate efforts from Tesla, SpaceX, and xAI. Formal announcement of the TERAFAB project, which will be done jointly by @SpaceX and @Tesla, tonight around 8pm CT. Livestream on 𝕏.The goal is to produce over a TERAWATT of compute per year (logic, memory & packaging) with ~80% for space and ~20% for the ground.— Elon Musk (@elonmusk) March 21, 2026 "We’re starting a galactic civilization," Musk said during the announcement. What Is Terafab? Speaking from the Seaholm Power Plant in Austin, Musk described the Terafab as a comprehensive chip manufacturing facility. It will consolidate all stages of chip development, including testing and packaging, under one roof. "To the best of my knowledge, this doesn’t exist anywhere in the world," Musk stated. What Will Terafab Produce? The Terafab will produce two types of chips. One is designed for Tesla's autonomous vehicles and Optimus humanoid robots, with expected production volumes significantly higher than cars. The second, the D3 chip, will be tailored for space environments, supporting solar-powered AI satellites. Musk envisions a future where AI satellites, powered by solar energy, operate in space, reducing costs below terrestrial AI. He also proposed the potential for establishing an industrial base on the moon, unlocking petawatts of AI compute. Musk’s vision includes free trips to Saturn in a post-scarcity economy, acknowledging the ambitious nature of these plans. Alignment With Tesla's AI Infrastructure Expansion Musk teased the Terafab project launch last week, marking a significant milestone in Tesla’s AI infrastructure expansion. The initiative aligns with Musk’s vision for autonomous technology and the development of AGI, positioning Tesla as a leader in AI-driven innovation. Musk’s confidence in SpaceX’s AI capabilities highlights the company’s potential to outpace competitors in the AI race, emphasizing the importance of AI integration for future success. The Terafab project has implications for both terrestrial and extraterrestrial applications. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Shutterstock