Intel investors get some reassurance from Elon Musk over a major chip endeavor

By Barbara Kollmeyer

Musk clarifies TSMC's involvement in planned fab

Intel CEO Lip-Bu Tan pictured at an event in Taipei on June 2. The CEO and Elon Musk came out swinging over speculation Intel won't have a starring role in the Terafab chip-making project.

Elon Musk and the chief executive officer of Intel on Wednesday pushed back against doubts over the technology group's role in the trillionaire's Terafab chip-making project.

Intel (INTC) CEO Lip-Bu Tan told Bloomberg ahead of an event in Tokyo that the company's involvement in Terafab will continue. Meanwhile, on his X account, Musk responded to a post speculating Taiwan Semiconductor Manufacturing Co. (TSM) (TW:2330) would play a larger role in that massive chip plant.

"No, we will build and run the fab. Let there be ZERO doubt about that. Maybe TSMC subleases part of the Terafab if they want, but nothing more than that," Musk replied.

On Saturday, Musk acknowledged that TSMC could take part in his Texas-based chip venture. That led to a more than 5% loss for Intel shares over the Monday and Tuesday trading sessions.

Intel initially rose ahead of Wall Street's open but has since turned lower as equity futures (NQ00) (ES00) point to a tough start for tech and other stocks on Wednesday. TSMC's U.S.-listed stock saw a 3% bump on Monday but was down nearly 2% ahead of Wednesday's open.

Plans for Terafab, jointly led by Tesla (TSLA) and SpaceX (SPCX), were announced by Musk in March. The companies pledged to manufacture 1 terawatt of computing capacity a year - twice as much as is needed by the entire United States. Musk raised the idea of a deal with Intel in November 2025 after saying current partners wouldn't be able to meet his chip needs, and the company was the first to offer its support for the high-profile project in April.

D.A. Davidson managing director Gil Luria told MarketWatch on Monday that Terafab excitement has been a big driver behind Intel's stock surge this year. Intel has rallied more than 200%, with other chip makers seeing similar gains, due to the demand for tech hardware to build out AI ambitions for companies.

Intel continues to dominate the market for server central processing units (CPUs), the chips that power a computer's operating system. Market demand for CPUs has surged due to agentic AI and inference, which puts what large language models have learned during training into practice.

If the company ultimately doesn't have a role in Musk's chip-building facility or becomes just one fab tech provider, "investors may reconsider the credit they gave Intel," said Luria.

-Barbara Kollmeyer

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