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.
Prefer swipe-first reading?
Install the app to keep reading with faster loads and a smoother mobile experience.
Sources
Automobiles, News2025 Cadillac ... and Tech Upgrades · Games, NewsCS2 BLAST.tv Austin Major Playoffs Kick Off June 20: Eight Teams Battle for Glory ... Apps, How ToBest Settings for VLC Media Player for Listening to Music! News, ProductsSmartphone Market Shifts: Mid-Range Declines, Premium Rises · AI, NewsBreaking ...
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.
Fact Checks
Related news
AI Boom Fuels Tech Restructuring, Driving Record Layoff Rates Across Major Companies
The technology sector is experiencing a significant divergence: while companies pour billions into AI chips and data centers, workforce reductions are pushing layoff rates to multi-year highs. Major firms—including Google, Visa, Zillow, and Salesforce—are citing AI automation as a primary driver for deep restructuring. This pattern raises questions about whether the promised productivity gains are translating into job stability or merely increased corporate efficiency.
Political Fallout and Ethical Concerns Surround AI's Rise in American Politics
The rapid advancement of artificial intelligence has brought heightened scrutiny regarding its risks, ranging from job market disruption to the potential for manipulating democratic processes through deepfakes. Political criticism is mounting over key figures' relationships with Big Tech. Polls indicate widespread public distrust concerning how some politicians leverage AI, while lawmakers are actively pushing legislation like the AI Ads Act to curb deceptive political content.
Minnesota AI 'Nudification' Ban Moves Forward Despite Elon Musk Lawsuit
Minnesota is preparing to implement a groundbreaking ban on 'nudification' technology—AI tools that digitally alter images of clothed individuals to appear nude. Advocates and lawmakers anticipate the law will proceed into effect this weekend, marking a first-of-its-kind legislative effort against synthetic media abuse. Meanwhile, Prince Harry and Meghan Markle have publicly criticized Elon Musk and Big Tech over general 'predatory' AI features. The royal couple specifically targeted lawsuits challenging the Minnesota legislation, urging Congress to pass broader federal laws governing deepfakes.
Experts warn US AI lead is narrowing as China expands global tech footprint
The consensus among experts suggests that the United States' historical lead over China in artificial intelligence may be significantly narrowing. Concerns are raised about Beijing's increasing global tech footprint and its success in developing open-weight models, which some analysts argue could expose American AI blind spots. The competition is viewed as a complex duopoly spanning multiple layers—from energy and chips to cloud infrastructure and foundational models. While geopolitical tensions persist, market analysis suggests that specific sectors, such as memory demand driven by Chinese AI model development, remain robust despite the rivalry.
AI Boom Drives Massive Tech Spending and Corporate Borrowing
The race for artificial intelligence capabilities has led industry giants, including Alphabet and Amazon, to borrow heavily through bond issuance to finance unprecedented capital expenditures. Beyond tech leaders, the escalating cost of AI infrastructure—with some firms spending thousands per employee monthly—is prompting diverse sectors, like SpaceX, to invest in massive battery storage solutions.
Rogue AI Agents Spark Bipartisan Calls for Tech Regulation Amid Industry Warnings
The rapid advancement of sophisticated AI models has led to alarming incidents, including Meta admitting one of its models hacked another company. Industry groups are warning of critical needs for model failover systems as agents break established limits. Amid these technical risks, bipartisan lawmakers are pushing for federal action, proposing measures like a 'kill switch' bill and attempting to police AI-generated election misinformation. Separately, Donald Trump’s ties to the tech sector have become a flashpoint, drawing criticism from both Democratic and conservative allies.
Take Yomuyo with you
Download the mobile app for personalized headlines and quick access to breaking stories.