SpaceX S-1 Says Terafab May Make GPUs as AI Demand Rises

SpaceX’s S-1 filing says the company may manufacture GPUs at Terafab, an AI chip complex in Austin, Texas, as it seeks more compute capacity ahead of a planned summer IPO that could value the company at about $1.75 trillion.

Terafab is described in the filing as a joint effort involving SpaceX, its xAI unit and Tesla. The filing lists “manufacturing our own GPUs” among the “substantial capital expenditures” tied to work on AI and other technologies. Elon Musk described the Austin complex as intended to produce chips for electric vehicles, humanoid robots and space-based data centers; the filing does not specify what types of AI processors the site will make.

The filing warns that limited chip supply could constrain growth, noting, “We do not have long-term contracts with many of our direct chip suppliers.” It adds that SpaceX “expect[s] to continue sourcing a significant portion of our compute hardware from third-party suppliers, and there can be no assurance that we will be able to achieve our objectives with respect to TERAFAB within the expected timeframes, or at all.” The S-1 gives no timeline for when in-house chip production might begin.

The filing does not name which internal teams or partners would run fabrication at Terafab. Musk told Tesla analysts that by the time Terafab scales up Intel’s next-generation 14A process ‘will be probably fairly mature or ready for prime time’ and ‘seems like the right move,’ indicating a potential role for Intel.

SpaceX told investors it had offered compute access to Cursor, a coding startup it now intends to acquire. The filing says Microsoft explored a deal for Cursor and chose not to proceed. Cursor chief executive Michael Truell posted on X that he was ‘excited to partner with the SpaceX team to scale up Composer.’

The S-1 notes the technical difficulty and scale involved in producing advanced AI processors. Nvidia focuses on GPU design and outsources manufacturing to foundries such as TSMC. Producing leading-edge processors requires specialized materials and more than a thousand precise manufacturing steps. TSMC invested years and billions of dollars to develop advanced processes and build experience making billions of smartphone chips.

The filing leaves open questions about the scope and timing of on-site chip manufacturing, the exact types of processors Terafab will produce, and which partners or internal groups will handle fabrication.