Milk Road AI SpaceX + Tesla + xAI: The $25B Mega Bet to BREAK NVIDIA's Chokehold
Mar 25, 2026
Kyle Reidhead, tech and markets analyst covering AI, Tesla, SpaceX, and chips. He breaks down Elon’s plan for an in‑house TerraFab and a $20–25B buildout. They discuss vertical integration for Tesla, SpaceX IPO strategy and ties to xAI. Conversation also covers lunar robots, space-based compute advantages, and whether this threatens Nvidia’s dominance.
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Tesla And SpaceX Will Build Their Own Massive Chip Fab
- Elon is launching a joint Tesla–SpaceX chip fab to vertically integrate chip supply for robots, cars, and space compute.
- The TerraFab aims to produce 100–200 billion units/year with a $20–25B budget to remove supply and geopolitical risk.
Demand, Geopolitics, And Efficiency Drive Vertical Integration
- Three core reasons motivate Tesla's chip push: unmet demand, geopolitical supply risk (TSMC/Taiwan), and efficiency from vertical integration.
- Tesla expects custom chips to be far more powerful and tailored (up to ~40x over A14 claims) for Optimus, FSD, and Grok workloads.
SpaceX IPO Will Tell The Space Manufacturing Story
- SpaceX plans an IPO to raise capital (rumored $75B) at a $1.25–1.75T valuation, which accelerates public storytelling about space manufacturing.
- Kyle expects SpaceX to tell investors it will build a new manufacturing industry in space beyond Starlink revenue.