Musk is in talks with ASML. And that says a lot about where the next phase of the AI race is heading

Elon Musk is reportedly in direct contact with the management of ASML $ASML regarding the TeraFab project, a massive chip fab in Texas meant to support the AI, robotics and data center ambitions of Tesla, SpaceX and xAI.

ASML is an absolutely crucial company for the entire semiconductor world. It is practically an irreplaceable supplier of the most advanced lithography machines, especially EUV, without which the most advanced chips cannot be manufactured at scale.

In other words: anyone who wants to produce cutting‑edge AI chips will sooner or later run into ASML.

📈 According to available information, the TeraFab project involves an investment of around 119 billion USD. The goal is to create domestic manufacturing capacity for advanced chips that could power Tesla's autonomous driving, Optimus robots, xAI data centers and potentially even SpaceX's space infrastructure.

The project is also expected to involve Intel $INTC , which could contribute its manufacturing technology and gain one of the most visible opportunities in the foundry business.

💡 The timing is interesting.

The CEO of ASML warned that demand for chips driven by AI, robotics and satellite technologies could face long‑term limits due to constrained manufacturing capacity. According to him, the entire semiconductor market could by 2030 grow to a value of up to 1.5 trillion USD.

And this is exactly where Musk's strategy starts to fit together.

Tesla has long ceased to be valued by the market merely as a carmaker. SpaceX is not just a rocket company. xAI is not just another chatbot project. All of these companies need enormous amounts of computing power.

⚠️ The risk, of course, is that Musk often comes up with extremely ambitious plans whose implementation tends to be costly, long and complex.

Building a cutting‑edge chip fab is not the same as building another car factory. It is a capital‑intensive project, dependent on suppliers like ASML, Applied Materials, Tokyo Electron, memory companies, the energy sector and geopolitics.

What is your opinion on this news, and how do you view the market position of Musk's companies?