Intel has announced its collaboration with Elon Musk to develop the Terafab project in Austin, Texas, which aims to manufacture chips necessary for various artificial intelligence (AI) initiatives. Musk introduced the Terafab concept in March 2026, with a goal of producing 1 terawatt of computing power each year. This partnership allows Musk's companies, including SpaceX and Tesla, to concentrate on their strengths while Intel handles the complex and costly task of chip fabrication. Intel emphasized that its expertise in designing and producing ultra-high-performance chips at scale will significantly contribute to the Terafab's objectives. The collaboration aligns with Musk's broader strategy of refocusing his companies towards AI, as evidenced by Tesla's transition from an electric vehicle manufacturer to a robotics-focused entity. Additionally, SpaceX's acquisition of Musk's AI company, xAI, in February 2026 highlights this shift. While Intel has seen improvements due to the launch of its new Core Ultra Series 3 chips and recent government investments, the company still faces challenges, including achieving full operational capacity at its two chip fabrication plants in Arizona, which were announced in 2021.