On March 14 (local time), Elon Musk, CEO of Tesla, made an announcement that Tesla's AI chip manufacturing project, dubbed Terafab, is set to kick off within the next seven days. This upcoming chip factory is poised to outscale Tesla's renowned Gigafactory. Last year, Musk disclosed his ambitious vision of constructing a "colossal chip factory" dedicated to the production of AI chips. At present, Tesla is in the process of developing its fifth-generation AI chip, known as AI5, as a strategic move to propel its autonomous driving endeavors forward.

During the 2025 shareholder meeting, Musk delved into the specifics of prospective chip manufacturing strategies. He hinted at a potential partnership with Intel, although no formal agreement has been inked as of yet. Furthermore, Musk underscored that even if suppliers manage to attain peak chip production efficiency, they would still fall short of meeting the soaring demand. This predicament underscores the imperative for Tesla to establish Terafab.