Intel shares climbed 3.9% to $52.76, beating the broader market, which fell that day. The company will join the Terafab project, a major semiconductor effort that includes SpaceX, xAI, and Tesla, aiming to produce 1 terawatt of computing power each year.

The Terafab deal strengthens Intel’s manufacturing comeback under CEO Lip-Bu Tan, who took over in March 2025 and has worked to restore confidence in the company’s chip-making. With Tuesday’s stock jump, Intel is up about 169% over the past year, rebounding after years of losing ground.

The project will first target the 2-nanometer node, a chip manufacturing process in which transistors are spaced just 2 nanometers apart. This approach represents the latest advance in chip design. Building at this level could cost tens of billions of dollars. Intel brings vital expertise because it designs, manufactures, and packages high-performance chips at scale. The Terafab group needs these skills to reach its goals.

The end markets for Terafab chips span some of the most capital-intensive growth sectors in technology. These include autonomous Terafab chips designed for fast-growing, high-investment tech sectors such as self-driving cars, humanoid robots, and space-based data centers. SpaceX and xAI merged in February to accelerate their plans to build AI infrastructure that will support new foundational models. SpaceX is also planning an IPO around mid-year, reportedly valued at $2 trillion. If it happens, it would be one of the biggest listings ever and could boost investment in AI infrastructure, a trend that now includes Intel through its Terafab partnership. ningfully shifts the perception of Intel’s foundry business. Intel is moving from a struggling legacy manufacturer to a credible partner for the next generation of AI-native semiconductor production. The company now operates at the cutting edge of process technology.