Tesla Unveils D3 Space Chip in $25B Terafab AI Push
In a landmark announcement at the TERAFAB event in Austin, Tesla CEO Elon Musk unveiled a comprehensive 10-year chip roadmap, headlined by a new $20-25 billion vertically integrated chip fabrication facility. The project, a collaboration between Tesla and SpaceX, will consist of two separate fabs: one to produce inference chips for Tesla's autonomous vehicles and Optimus robots, and another dedicated to manufacturing the newly revealed D3 chip. The D3, or Dojo 3, is a radiation-hardened processor specifically engineered for operation in the vacuum of space. This specialized hardware is designed to be launched aboard SpaceX's Starship vehicles to create orbital AI data centers. The ambitious goal is to overcome Earth's energy constraints and provide massive computational power to support the future ambitions of Musk's xAI and other projects. While the AI5 and AI6 chips for Tesla's 'Physical AI' products like Robotaxis dominated much of the presentation, the D3 signifies a radical expansion of the company's silicon ambitions beyond terrestrial applications. The TERAFAB facility aims for a projected output of one terawatt of annual computing capacity, which is reportedly double the current output of the entire United States. Despite the scale of the announcement, some analysts, as noted by Electrek, have questioned the massive investment, suggesting it 'reeks of desperation' in the highly competitive and capital-intensive chip fabrication industry.
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During the historic TERAFAB launch ... of Tesla, xAI, and SpaceX over the next decade. While the spotlight was understandably dominated by the AI5 and AI6 chips, which will serve as the unified brains for millions of Robotaxis and Optimus humanoids, many also noticed a third, highly specialized chip on the presentation slide and in the Lunar Mass Driver video: D3...
Tesla and SpaceX announce $25B 'Terafab' chip factory — here's why it reeks of desperation | Electrek
Terafab will produce two categories of chips: inference chips for Tesla vehicles and Optimus robots (such as Tesla’s current AI4), and D3 chips custom-designed for orbital AI satellites.
Tesla's fifth-generation AI chip, AI5, is among the first products the facility is designed to produce, with small-batch production targeted for late 2026 and volume production projected for 2027. The second is the D3, a high-power, radiation-hardened processor built for operation in space.
Tesla, Inc. (NASDAQ:TSLA) is one of the Goldman Sachs AI Stocks: Top 12 Stocks to Buy. On March 23, 2026, Reuters reported that CEO Elon Musk said the day before that Tesla, Inc. (NASDAQ:TSLA) and SpaceX aim to establish two advanced chip factories in Austin, Texas, as part of the “Terafab” ...
The facility would consist of two separate fabs, one dedicated to AI chips for Tesla vehicles and Optimus, and one for SpaceX's space-based data centers. The projected output — one terawatt of annual computing capacity — is double what the entire United States currently produces.
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