Intel to Join Musk's Terafab Mega AI Chip Project

Intel joins Musk's Terafab AI chip project to power humanoid, data center goals

Intel Partners with Elon Musk's Terafab for Advanced AI Chip Production

Intel's Strategic Collaboration with Musk's Ventures

April 7 (Reuters) - Intel said on Tuesday it will partner with Elon Musk's Terafab AI chip complex project alongside SpaceX and Tesla to help produce processors powering the tech billionaire's robotics and data center ambitions.

Intel's shares jumped nearly 3% after the news, with the company also saying it hosted Musk at its campus the past weekend.

Background on Terafab and Tesla's AI Chip Ambitions

The announcement comes months after Musk laid out plans for Tesla to build a massive artificial-intelligence chip fab to power the EV-maker's autonomous ambitions and suggested the company could work with Intel.

"Our ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab's aim to produce 1 terawatt per year of compute to power future advances in AI and robotics," Intel said in a post on social media platform X.

Expansion of Chip Factories and SpaceX's Role

Last month, Musk said his rocket company SpaceX - which recently merged with his social media and AI firm xAI - and Tesla would build two advanced chip factories at a sprawling facility in Austin, Texas.

Facilities for Humanoid Robots and Data Centers

One facility would power cars and humanoid robots, while the other would be designed for AI data centers in space, Musk had said.

SpaceX's IPO Plans

Meanwhile, SpaceX has confidentially filed for a U.S. initial public offering, setting the stage for what could become the largest stock market listing on record. The company is targeting a market launch later this year.

Implications for Intel and the AI Chip Market

For Intel, which had lagged its rivals in the AI race, the partnership is set to boost investor confidence as its turnaround efforts gather steam. The company's finances have improved as it witnesses increased demand for its processors.

Intel's Restructuring and Investment Initiatives

Intel's current top boss Lip-Bu Tan, at the helm for more than a year now, is pursuing an aggressive restructuring to repair the chipmaker's finances, including job cuts and asset sales.

Intel has also received billions of dollars in investments from Nvidia as well as the U.S. government, which is now its biggest shareholder.

(Reporting by Deborah Sophia in Bengaluru; Editing by Pooja Desai)