Musk Says Terafab Could Top $1T, and Tesla Can't Cover It

Musk spent Wednesday night on X making an offer. Replying to Zero Hedge's post reading 'Elon please hire Jensen,' the Tesla CEO wrote: 'That would be an honor.' The invitation landed the same week the Wall Street Journal reported Nvidia's board was preparing to push out its longtime CEO. Jensen Huang resigned Thursday morning.

The real number on Musk's plate is bigger than any hire. At the Baron Investment Conference last Friday, Ron Baron priced Terafab at 'a trillion dollars.' Musk's answer, in a clip played on this week's episode of Peter Diamandis's Moonshots podcast: 'Probably more than that.' For scale, a trillion dollars is more than 15 years of Taiwan Semiconductor's entire 2026 capital budget of $60 billion to $64 billion.

Tesla cannot write that check. Its free cash flow was $6.2 billion in fiscal 2025, and analysts expect it to turn negative through 2028. The company's $45.4 billion in cash and short-term investments is under 5% of the Terafab bill, so Tesla's share would have to come from debt, new stock or SpaceX. Tesla's 2027 capex guidance, due in late January, will reveal how much of Terafab's first phase lands on its own books.

The ambition behind the bill is enormous. Musk wants a terawatt of AI chips a year, and figures the world will produce maybe 35 to 45 gigawatts of them next year. 'You need 30 times what current global production will be roughly next year,' he said. He argues the spending comes in stages: 'But we won't need that money immediately. We'll be building phases.' Tesla and SpaceX said in August they would put about $16.8 billion into phase one, with construction running from December through 2028.

And the estimate keeps climbing. On Tesla's third-quarter call in October, Musk put Terafab at tens of billions of dollars through early 2028 and more than $100 billion over the long run. Three months later, the figure being thrown around is a trillion.