Elon Musk is going to build his own chips, with a target of 1 terawatt. According to him, the total AI chip output worldwide this year amounts to only about 20 gigawatts. Musk’s TeraFab aims to produce 1 terawatt of computing power annually. That’s roughly 30 times the global total expected next year. The project was announced in March, with a factory under construction in Texas and Intel joining with its 14A process. The initial investment is $16.8 billion, with the total projected at $119 billion. Musk’s own timeline calls for the first test chip by mid-2027 and mass production by Q3 2028. He admits the plan is extremely aggressive—and success is far from guaranteed. The real significance lies in control over computing power. As large models grow faster, chip production can’t keep up. At the end of the parameter race lies a physical wall.