☕ TERAFAB: could Musk’s push for chip independence become a problem for NVIDIA?
Here’s the question on my Sunday watchlist:
If Musk’s companies can produce competitive AI chips themselves, how much future spending could move away from NVIDIA?
What’s confirmed
Tesla and SpaceX’s Terafab project aims to combine chip manufacturing, memory and advanced packaging. Its planned applications include robotics, autonomous vehicles and space-based AI computing. These are development goals, not proof of competitive production.
Why NVIDIA investors should pay attention
Purpose-built chips could eventually handle some workloads that would otherwise require externally purchased processors.
My interpretation: if those chips deliver competitive performance and cost at scale, Musk’s ecosystem could capture more of its own computing spend.
That would create a potential competitive threat.
But building a factory is only part of the challenge.
NVIDIA designs its chips and relies on foundries such as TSMC and Samsung for manufacturing. Its offering also includes CUDA, networking and complete computing systems.
A chip running inside a robot does not automatically replace the GPUs used to train its AI.
And SpaceX’s announcement explicitly encourages existing suppliers to expand production. Terafab could add capacity alongside them.
The milestones I’m watching:
• Working chips with credible performance comparisons.
• Reliable production at competitive cost.
• Evidence that internal chips actually replace external purchases.
For NVIDIA, successful substitution would raise competitive pressure.
For Tesla, greater supply control could help—but the investment and execution risks matter too.
Open
$NVDAB and compare it with $TSLAB as you research this thesis. A factory announcement alone cannot tell us where either price goes next.
What would change your view first: competitive benchmarks, or proof of production at scale?
Follow for updates as the evidence develops.
#NVIDIA #Tesla #AI $NVDAB $TSLA