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Tesla and SpaceX Terafab unveil screenshot
SpaceX

What we know about Tesla’s Terafab, the “most epic chip-building exercise in history by far”

The SpaceX and Tesla collab would be “bigger than everything else combined” in Giga Texas.

Rani Molla

With Tesla’s Terafab project, the company is stepping into uncharted territory. Not only is it planning what could be the largest semiconductor fabrication plant in the world, it’s doing so with virtually no experience in chip manufacturing. Its ambitions are literally out of this world: Tesla has described it as a step toward “becoming a galactic civilization.”

Here’s what we know so far.

Who: Tesla and SpaceX, as well as its subsidiary xAI, will jointly run Terafab. It’s the latest example that Elon Musk, who is CEO of all three companies, increasingly views them as part of the same entity.

What: Terafab aims to bring all aspects of chip production — from design to fabrication to packaging — under one roof. Musk said the facility is intended to produce up to 1 terawatt of compute annually. The plant would manufacture inference chips for Tesla’s Robotaxis and Optimus robots, as well as custom AI chips for space-based applications, including solar-powered AI satellites. Morgan Stanley estimates the project could cost $35 billion to $45 billion in capital expenditure, likely shared between Tesla and SpaceX.

Where: Early reports suggested Terafab could be located on the north side of Tesla’s Giga Texas facility, based on a slide Musk presented showing an “Advanced Technology Fab” there. But Musk later clarified that this referred only to a smaller facility for iterating on chip designs. The Terafab itself, he said, would be “far bigger than everything else combined” on the Giga Texas campus and require “thousands of acres.” Tesla says the existing Giga Texas site spans about 2,500 acres with more than 10 million square feet of factory space. Musk added that “several locations for Terafab are under consideration.”

Why: The goal is to supply Tesla, SpaceX, and xAI with the ballooning number of AI chips they expect to need since Musk has said existing suppliers, including TSMC, Samsung, and Micron, can’t handle their future demand. On Tesla’s last earnings call, Musk said chip supply would be a “limiting factor” for Tesla’s growth in about three or four years.

When: Musk has not provided a timeline for the project, but even at his typical breakneck pace, it is likely years away. Building a semiconductor fab is one of the most complex industrial undertakings in the world, typically carried out by established players like TSMC, Intel, and Samsung, and often takes years to complete and ramp.

“Even under an aggressive scenario involving a retrofit of an existing facility, initial chip output would likely not occur until mid-2028 at the earliest,” Morgan Stanley analysts wrote last week. “A greenfield build would extend timelines further, with meaningful output more likely 4-5 years after project initiation.”

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FT: Anthropic staff helping the NSA use Mythos for offensive cyberattacks

Anthropic’s Mythos AI model was deemed too dangerous to release to the public, with the company citing its ability to orchestrate novel cyberattacks.

And that’s just what the National Security Agency is doing, with the help of Anthropic staff embedded at the agency, according to a report from the Financial Times.

Only a small number of companies and US allies have been given access to the advanced model, which means America’s adversaries have not had the chance to shore up their defenses against the AI model’s new offensive capabilities.

The arrangement is especially unusual as the Pentagon has deemed Anthropic’s AI a national security supply chain risk — effectively blacklisting it for defense work — in response to the company’s refusal to allow its technology to be used for any legal application, which could include autonomous killing or mass surveillance. Anthropic is currently suing the US government to fight the determination.

Only a small number of companies and US allies have been given access to the advanced model, which means America’s adversaries have not had the chance to shore up their defenses against the AI model’s new offensive capabilities.

The arrangement is especially unusual as the Pentagon has deemed Anthropic’s AI a national security supply chain risk — effectively blacklisting it for defense work — in response to the company’s refusal to allow its technology to be used for any legal application, which could include autonomous killing or mass surveillance. Anthropic is currently suing the US government to fight the determination.

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Longtime Tesla bear JPMorgan upgraded Tesla and raised its price target to $475 from $145

For more than a decade, JPMorgan was Wall Streets most stubborn Tesla skeptic, anchored by auto analyst Ryan Brinkman’s strict focus on traditional car fundamentals and near-term delivery numbers.

But JPM recently handed coverage of the stock to a new analyst, Rajat Gupta, who is throwing that playbook out the window. In a note Friday, the firm upgraded Tesla to neutral from underweight and raised its price target 228% to $475 from $145. (The analyst consensus on FactSet is $403.) Instead of focusing on the company’s struggling vehicle business, the new analyst is orienting himself more toward Tesla’s idea of the future, now modeling Tesla’s physical AI and robotaxi fleets all the way out to the year 2040.

Here are the main reasons for the capitulation:

  • Looking past the car lot: Gupta argues that Tesla is at the forefront of physical AI, entering uncharted TAMs” and therefore deserves the benefit of the doubt to be valued on LT earnings potential rather than near-term speed bumps.

  • Unmatched vertical integration: Teslas control over everything from battery cells to custom silicon gives it a massive moat. JPM notes this starting point advantage is unmatched at an industrial level scale” and “still somewhat under-appreciated and misunderstood.

  • The AWS flywheel effect: Deploying Optimus robots inside its own factories should not only lower COGS for the base automotive business, but more importantly, help validate the product at an industrial scale.” Gupta called it “a classic flywheel effect, somewhat analogous to AWS and Kiva at AMZN.

For Tesla bulls who have argued for years that this is an AI company and not a carmaker, JPM’s sudden $3.9 trillion valuation model is the ultimate validation.

skynet terminator

Anthropic ponders self-improving AI

Anthropic says Claude already writes 80% of its code. A new post asks what happens when the models can improve themselves — and whether anyone could stop them.

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ChatGPT hit 1 billion users nearly twice as fast as TikTok did

It took Facebook and Instagram around eight years; it took YouTube just over six; even TikTok, which at the time felt like it was a global sensation almost as soon as it arrived, took more than half a decade.

Now, though, the mobile version of ChatGPT has positively left the biggest platforms (and all of your other favorite apps) in the dust, hitting 1 billion monthly active users in just three years, per new data from market intelligence firm Sensor Tower, as more users turn to OpenAI’s chatbot each month.

ChatGPT 1 billion users chart
Sherwood News

While rival Anthropic might be pulling ahead in terms of annualized recurring revenue, enterprise customer adoption, and valuation, the app version of Claude, a market-leading chatbot on several counts, has clocked only 56 million monthly active users in the quarter to date.

In fact, according to Abe Yousef, a senior insights analyst at Sensor Tower, ChatGPT’s monthly active user count for the quarter to date outweighs the figures for Claude, Gemini (472 million), Doubao (106 million), Dola (78 million), DeepSeek (68 million), Meta AI (61 million), Grok (50 million), Perplexity (44 million), and Copilot (31 million)... combined.

ChatGPT made a pretty big splash in the tech world when it landed toward the end of 2022, but there’s no question that the mobile versions — which launched on iOS in May 2023, then on Android a couple months later — helped to catapult the chatbot into the mainstream proper.

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