Elon Musk announces Terafab

Hey there!

Welcome back to The Pulse, where we dive into interesting AI stories and trends backed by data, all presented through simple visuals.

> Phase-1 to be located at Gigafactory Texas in Travis County, Texas; full facility location TBD

> will consolidate chip design, lithography, fabrication, memory production, advanced packaging, testing, etc. despite no previous semiconductor experience

> SpaceX also filed FCC application to launch 1M datacenter satellites into low Earth orbit - Terafab is the chip layer

> 80% of compute output directed to space; 20% terrestrial (cars, robots)

> cost not yet included in Tesla's 2026 capex plan, which already exceeds $20B

> small-batch AI5 (H100 equivalent) expected late 2026, scale in 2027; AI6 delayed to late-2027 or 2028

> SpaceX planning to file IPO this week for a June debut; aiming to raise a record-high $75B at $1.75T valuation

> Sora launched as standalone app Sep 2025, shut down this month (6 months)

> also cancelled in-app direct checkout shopping & delayed consumer hardware to 2027

> OpenAI's rationale: disproportionate compute relative to lack of audience & unproven revenue; company shifting resources toward AGI push + IPO prep

> also cut infrastructure investment plans from $1.4T → $600B by 2030

> ads to contribute significantly to $280B by 2030 target (22× in 5 years) despite Altman claimed AI + ads a “last resort” a year ago

> currently burning $17B/yr; ads + API + subscriptions all required simultaneously to close the gap

> hired Dave Dugan (ex-Meta VP of Global Ad Solutions) to lead ad rollout + partnered with Criteo for ad delivery

> also on an acquisition spree (6 this year already) + trying to secure pre-IPO funds by guaranteeing 17.5% returns to private equity firms

> meanwhile, Anthropic soars to the top: adoption +4.9% MoM (month-on-month) as of Feb (largest gain since tracking began)

> OpenAI fell 1.5% MoM (largest single-month drop for any AI company on record)

> 1 in 4 businesses on Ramp now pays for Anthropic, a year ago it was 1 in 25

> shipped 10+ features in just the last 2 weeks (AutoMemory, voice mode, enhanced computer use, etc.)

> growing 30% week-over-week since Feb end + 73% businesses purchasing AI services for the first time choosing Anthropic over OpenAI now