Elon Musk’s Tesla Inc. (NASDAQ:TSLA) and Space Exploration Technologies Corp. (NASDAQ:SPCX) have sued Illinois nanotechnology company TERA-print LLC over the "Terafab" name planned for their $16.8 billion AI chip complex in Texas.
Musk Companies Challenge TERA-Print Trademark Claim
According to Reuters, Tesla and SpaceX filed the lawsuit on Tuesday in federal court in Austin, asking a judge to declare that their use of Terafab does not infringe TERA-print’s "Tera-Fab" trademark. The complaint says TERA-print sent a cease-and-desist letter after Tesla filed three Terafab trademark applications with the U.S. Patent and Trademark Office in May.
TERA-print’s registered Tera-Fab mark covers a desktop photolithography system used in bioengineering and related applications. The company threatened litigation in June, arguing Musk’s companies could create consumer confusion. USPTO records show TERA-print owns a federal registration for TERA-FAB.
Tesla and SpaceX reject that argument. "No reasonable consumer is likely to believe" their chip plant is affiliated with TERA-print’s desktop lithography products, they said, arguing the companies serve different customers and technologies.
TERA-Print Vows To Defend Its Rights
TERA-print, meanwhile, said it discussed a settlement with Tesla as recently as Sept. 2. "Having been misled by Tesla’s professed interest in settling this matter, TERA-print will now vigorously defend its rights," the company said.
Tesla did not immediately respond to Benzinga’ request for comment.
Terafab Project Scales Musk’s Chip Ambitions
The dispute lands as Musk pushes ahead with one of his largest manufacturing bets. Tesla and SpaceX confirmed Grimes County as Terafab’s home in August. Reuters reported at the time that the companies plan an initial $16.8 billion investment in the 100-million-square-foot complex, which will make, package and test advanced logic and memory chips under one roof.
The plant will supply chips for Tesla’s Optimus robots and Cybercabs and SpaceX’s proposed space-based data centers. Musk has previously estimated that about 75% of Terafab’s AI-compute output could go toward "AI spacecraft," compared with roughly 25% for Tesla’s Optimus robots, though he described the split as a "very approximate guess.
SpaceX says Terafab will employ at least 3,000 people, while filings indicate future phases could push investment as high as $119 billion. Musk has called the facility essential for producing AI chips "at scale for use on Earth and in space."
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