SpaceX CEO Elon Musk Wants to Rewrite How AI Chips Are Made Moz Farooque ACCA Mon, October 12, 2026 at 2:34 PM EDT TSLA -0.96% SPCX +0.95% Explore stocks on Coinbase Trading disclosure Trading disclosure The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.
Elon Musk says Tesla (NASDAQ:TSLA) and SpaceX (NASDAQ:SPCX) could eventually become unusually strong chip manufacturers by applying one of their existing strengths: designing highly customized production equipment.
Speaking via livestream at the X Takeover event outside Tesla's Gigafactory in Austin, Musk acknowledged that he currently has no idea how to make microchips, but added, we'll figure it out.
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His argument is that the manufacturing process itself could become a competitive advantage.
Musk said that after touring rival facilities, he had not seen much customized equipment, while Tesla and SpaceX have extensive experience building specialized machinery for their own factories and products. In his view, that capability could allow his companies to improve chip-manufacturing processes rather than simply rely on standard industry equipment.
The comments fit with Musk's increasingly aggressive semiconductor ambitions.
Earlier this month, Musk said Tesla and SpaceX intend to build and operate the planned Terafab AI chip complex themselves, while leaving open the possibility that TSMC (NYSE:TSM) could sublease part of the facility.
Responding to speculation that TSMC would ultimately own and run the fab, Musk wrote: No, we will build and run the fab. Let there be ZERO doubt about that.
That would represent a major strategic shift for Musk's companies.
Tesla and SpaceX already depend heavily on advanced semiconductors for autonomous-driving systems, AI training, robotics, communications and other compute-intensive applications. Bringing more chip production in-house could give Musk greater control over cost, supply and product design.
I think the key point here is that Musk does not appear to be treating chip manufacturing as a conventional outsourcing exercise.
He is talking about redesigning the manufacturing process itself.
That matters because Tesla and SpaceX have historically tried to vertically integrate technologies they view as strategically important, from batteries and vehicles to rockets and satellite networks.
If that same approach extends to semiconductors, Terafab could eventually become much more than a capacity project. It could become an attempt to build a proprietary manufacturing system optimized around Musk's AI workloads.
Leading-edge chip fabrication requires extraordinary precision, engineering expertise and capital, areas where established foundries such as TSMC have spent decades building advantages.
For Tesla and SpaceX investors, the key things to watch are Terafab construction timelines, manufacturing partners, process-node ambitions, capital requirements and whether Musk can actually translate custom equipment into better chip economics.
The opportunity is potentially huge, but so is the technological gap Musk's companies would need to close.
