Intel announced on Tuesday it will partner with Elon Musk's Terafab project, involving SpaceX and Tesla, to manufacture advanced AI chips. This collaboration aims to accelerate Terafab's goal of producing one terawatt of compute annually, supporting Musk's ambitions for robotics and data centers. The partnership, revealed after Musk visited Intel's campus, comes as Musk plans to build two chip factories in Austin, Texas, one for vehicles and robots, and another for space-based AI data centers. For Intel, this deal is a significant step in its turnaround strategy, boosting investor confidence and demonstrating its capability to support major clients, despite its foundry business continuing to incur substantial losses.