Elon Musk unveils 'Terafab' venture to build chips for a galactic civilisation

Elon Musk has unveiled a pioneering chip manufacturing venture, the Terafab, marking a massive collaborative effort between Tesla and SpaceX.

Speaking on Saturday from Austin, the CEO outlined a vision to produce a terawatt of compute annually, fundamentally shifting the tech landscape.

Musk indicated that this in-house project, which now incorporates the recently acquired xAI, is designed to support a "galactic civilisation" by bypassing traditional industry reliance on external foundries.

The Terafab aims to consolidate the entire semiconductor lifecycle, from logic and memory production to advanced packaging and testing, under a single roof.

Musk noted the unique nature of this comprehensive facility, stating: “To the best of my knowledge, this doesn't exist anywhere in the world where you've got everything necessary to build logic, memory, and do packaging, and test it, and then do masks, improve the masks, and keep looping it.”

The facility will focus on two distinct chip categories to meet Earth-based and extraterrestrial demands. One chip is specifically optimised for the Optimus humanoid robot and Tesla’s vehicle fleet, with Musk predicting robot volumes will eventually dwarf car production.

The other, the D3 chip, is designed for solar-powered AI satellites in lower orbit. Musk argued that space-based AI will eventually become more cost-effective than terrestrial alternatives, explaining: “So as soon as the cost to orbit drops to a low number, it immediately makes extremely compelling sense to put AI in space.”

This ambitious strategy assumes that the abundance of solar power in orbit will eventually lower the operational costs of AI below that of terrestrial data centres.

Musk acknowledged the outlandish nature of his proposal, comparing the vision of a post-scarcity economy to the opening of the film Idiocracy.

However, he remains committed to establishing a distributed AI computing network that extends beyond Earth's atmosphere.