Intel Collaborating With Elon Musk on TerraFab Using Intel Technology and Processes
"TerraFab, he decided he want to build his own fab. And then meanwhile, we are delighted to work with him and then make sure that we can work together and enable him to be faster and quicker to the production. And then using some of our technology and some of our process."
About this episode
In this episode of No Priors, hosts Elad Gil and Sarah Guo interview Lip-Bu Tan, the 66-year-old legendary semiconductor investor and current Intel CEO, about his ambitious plan to save one of America's most iconic technology companies. Tan reveals several major developments: the US government has become a significant Intel shareholder as part of his restructuring strategy, NVIDIA CEO Jensen Huang personally invested $5 billion that has already grown to $25 billion, and President Trump initially demanded Tan's resignation over conflict-of-interest concerns before reversing course after a direct meeting. Tan discusses his partnership with Elon Musk on TerraFab, providing Intel technology for Musk's own fab ambitions, and makes a bold prediction that CPU demand will reach parity with GPUs as agentic AI workloads shift the compute landscape from 1:8 ratios to potentially 1:1. Throughout the conversation, Tan draws on his 15-year tenure transforming Cadence and his extensive venture capital experience at Walden—including 159 IPOs and investments in 200 semiconductor companies—to explain his crawl-walk-run approach at Intel. He emphasizes strengthening the balance sheet, simplifying product lines, rebuilding customer trust in Intel's foundry business, and recruiting top talent to compete in AI inference, physical AI, and advanced packaging. Tan discusses material science innovations including gallium nitride, silicon carbide, glass substrates, and artificial diamond as pathways beyond silicon miniaturization limits. He candidly addresses Intel's challenges competing with TSMC while arguing that a resilient, diversified supply chain requires domestic US manufacturing capacity for national security.
Key takeaways
- Tan revealed the US government has taken a major equity position in Intel, comparing it to Taiwan's early backing of TSMC as necessary infrastructure support.
- NVIDIA CEO Jensen Huang invested $5 billion in Intel that has appreciated to $25 billion, demonstrating cross-competitor confidence in the turnaround.
- President Trump initially demanded Tan resign as CEO over conflict of interest before reversing the decision after a direct meeting.
- Tan predicted CPU to GPU ratios will shift from 1:8 to potentially 1:1 as agentic AI and inference workloads favor CPU architectures.
- Intel is collaborating with Elon Musk's TerraFab using Intel technology and processes, with Tan meeting weekly with Musk's team.
- Tan is investing in new materials including gallium nitride, silicon carbide, glass substrates, and artificial diamond to overcome silicon miniaturization limits.
- The CEO described his strategy as strengthening Intel's balance sheet, simplifying products, rebuilding foundry customer trust, and recruiting for AI-first full-stack solutions.