Elon Musk, Chip Giant?
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Elon Musk, Chip Giant?
May 16, 2026 — 04:30 pm EDT
Written by
Motley Fool Staff for
The Motley Fool->
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In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Travis Hoium and Dan Caplinger and analyst Tim Beyers discuss:
- Musk’s chip dreams
- SaaS recovery
- What technologies will survive the next decade
- Stocks on the radar
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A full transcript is below.
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Travis Hoium: Do we have a new chip company in town? Welcome to Motley Fool Hidden Gems Investing. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoium, joined today by Dan Caplinger and Tim Beyers. Guys, I think we've got to start with what I think was one of the wildest news items of the week. TSMC has been this brake on this AI capex spending for years at this point. But now Elon Musk is saying, hey, we need more chips. We need more capacity. I am willing to put up to $119 billion into becoming now not just an EV company, not just a satellite company, not just an AI company, but also a chip company. Tim, I want to start with you. What in the world is going on here? Because it seems like chips is one of these businesses that is really hard. Intel has not gotten this right over the past decade, and suddenly Musk comes in, and do we have a new player in town in the chip game?
Tim Beyers: It's a floor wax, and it's a dessert topping. For those who remember their 1970s SNL references, it's, no, look.
Travis Hoium: I've got to look that one up.
Tim Beyers: There is nothing that Elon Musk thinks he can't do and so here we are. Now, to be fair to him, what he believes is that in order to serve all of his various businesses computers, and he needs and he needs computed scale. He needs it for SpaceX. He needs it for Tesla. He needs it for xAI. In order to solve that problem, he wants to create Terafab. Tarafab is this idea of just this massive scale chip manufacturing facility organization I think there are reasons to ask questions, but there is a logic to it, so let's give him credit there. But TSMC is an incredibly efficient supplier, and they are able to manufacture chips at scale because they've been doing it for decades. They do it at the smallest possible form factors and if you want to do what Musk wants to do, which is manufacture AI compute, then what you end up getting is a real push to manufacture the smallest chips possible right now that's at two nanometer. TSMC is already there. Musk is presumably going to get there, but I think there is a lot to be determined with this. The vision from a log as with most things that Elon Musk gives us, there is a logic behind this, but the difficulty level is just extreme.
Travis Hoium: Dan, the reason that this I think is so important, is it impacts so many companies in the entire ecosystem. You've got the chip manufacturers, TSMC, you have Intel. You have the AI chip suppliers like Nvidia, AMD. Is this something that investors should be thinking about, maybe there's a new supplier in town, that maybe this is going to be this vertically integrated company that's going to take on a Google? Where does your head go? Because it seems wild on the surface. But like Tim said, there is some logic to it, so you got to take it seriously.
Dan Caplinger: There is, but I thi