Intel Corp. announced that it is joining Elon Musk's long-shot effort to build advanced semiconductors for Tesla Inc., SpaceX and xAI, marking an unexpected alliance as the chipmaker works to reclaim its standing in a fiercely competitive industry. Intel said it will help the so-called Terafab project "refactor" technology inside a chip factory, a step that can improve chip performance, reliability and yield, or the share of chips that pass quality testing.

Terafab is Musk's ambitious plan to eventually manufacture custom chips for robotics, artificial intelligence and space-based data centers. The project aims to produce about 1 terawatt of computing capacity annually, a scale that would rival output from Taiwan Semiconductor Manufacturing Co.