Xai Terafab Tells Chip Suppliers To Move At "Light Speed," Offers To Pay Above Quotes

Elon Musk's $25 billion Terafab chip venture has moved rapidly from announcement to active procurement, with teams from the joint project between @Tesla, @SpaceX, and @xai reaching out to major semiconductor equipment suppliers including Applied Materials, Tokyo Electron, and Lam Research for equipment quotes and delivery timelines, according to Bloomberg.

Suppliers were told Musk wants the project to move at "light speed" and that Terafab is prepared to pay well above quoted prices in exchange for priority access. The urgency was underscored when staff contacted one supplier on a Friday public holiday, requesting estimates be returned by Monday.

Samsung was approached but declined to join directly, instead offering to allocate additional capacity for Tesla at its existing facility in Taylor, Texas. Intel signed on as a foundry partner on April 7, bringing its advanced 18A process node to the project.

The ambition behind Terafab is considerable. The venture is targeting one terawatt of annual AI compute capacity, which would represent roughly 50 times current global AI chip production. Analysts at Bernstein Research estimate the true capital requirement could reach around $5 trillion, a figure that dwarfs the $25 billion budget publicly cited. The first pilot line is aimed at producing 3,000 wafers per month, with full silicon chip manufacturing targeted to begin in 2029.