In this week's issue:

  • Elon Musk's $20-25 billion chip factory — the most audacious infrastructure bet in Austin's history
  • The deregulation data is in: HOME-built homes selling at 53% below traditional new construction
  • Samsung's Taylor fab installs EUV equipment — first chips rolling this year, with a $16.5B Tesla deal anchoring the line
  • David Allan Coe, the outlaw's outlaw, is dead at 86 — and what he built without a single institution behind him

Rock and roll.

Top Stories

TERAFAB: Elon Musk's $20-25 Billion Bet on Austin as the World's Chip Capital

You heard the name a few days ago in a single bullet. Here's what it actually means. On March 21, Elon Musk took the stage at Austin's defunct Seaholm Power Plant to announce TERAFAB — a $20-25 billion joint venture between Tesla, SpaceX, and xAI (xAI was recently acquired by SpaceX in an all-stock deal) targeting 1 terawatt of AI compute output per year. The design calls for consolidating chip design, lithography, fabrication, memory production, advanced packaging, and testing under one roof — a configuration that currently doesn't exist anywhere on Earth. On April 7, Intel officially joined the project, committing its next-generation 14A manufacturing process, making TERAFAB its first major external 14A customer. Intel CEO Lip-Bu Tan called it "a step change in how silicon logic, memory and packaging will get built in the future." Intel stock jumped more than 4% on the news. One critical site clarification: TERAFAB will NOT be at GigaTexas. Musk corrected this directly on X — GigaTexas North Campus holds only a small advanced technology fab for chip design iteration. TERAFAB itself, Musk said, "will be far bigger than everything else combined there," and "several locations are under consideration." Musk's framing on the necessity was blunt: "We either build the Terafab, or we don't have the chips." 80% of its output is targeted at space-based orbital AI satellites — SpaceX already filed in January 2026 to launch up to 1 million data center satellites.

Now the honest part. Electrek's Fred Lambert — one of the more rigorous Tesla watchers in the industry — headlined his analysis "here's why it reeks of desperation" and drew an explicit comparison to Battery Day 2020, when Musk promised a revolutionary 4680 battery cell that took years longer than projected and contributed to Tesla dissolving its Dojo chip team entirely in August 2025. Tesla's CFO confirmed the $20-25B TERAFAB cost is not yet incorporated into Tesla's 2026 capex plan, which already exceeds $20 billion on its own. Morgan Stanley analysts called TERAFAB a "herculean task" that "even under an aggressive scenario" might not produce chips until mid-2028. An industry source cited by BusinessKorea is even more conservative: a pilot line of 3,000 wafers per month, with mass production targeting 2029. Intel, conspicuously, has not filed an SEC disclosure about the arrangement — unusual for a publicly traded company announcing a major foundry deal. The counterpoint to TERAFAB's long timeline is happening right now in Taylor, 35 miles northeast of Austin. Samsung hit its equipment move-in milestone on April 24 at its 1,200-acre fab — EUV lithography systems now being installed, first chips expected by end of 2026. The anchor: a $16.5 billion Tesla supply deal to produce AI5 and AI6 processors for vehicles and Optimus robots using a 2nm process. Tesla's AI5 already taped out. The Taylor fab is also producing Apple image sensors and Groq 3 inference chips. Together, these two stories — one operational and near-term, one visionary and years out — tell the Chip City story: Austin and its immediate orbit are becoming the physical address of America's AI hardware future. Samsung is building it this year. Musk is betting $25 billion that Austin will own it for the next century.

Sources: Electrek | Axios | Austin American-Statesman | Reuters | TechWire Asia | Yahoo Finance / Statesman | BusinessKorea | Korea Times | Taylor Press

Upcoming Events

  • Kid Cudi — The Rebel Ragers Tour. TONIGHT (May 1), doors 6:30 PM at Germania Insurance Amphitheater — with M.I.A., Big Boi, and A-Trak on the bill.
  • Manor Road May Day Festival. TONIGHT (May 1), free admission at multiple Manor Road venues including The VORTEX and Howdy's — bug parade, aerial dancing, line dancing, cumbia party, and live music.
  • Band of Heathens — 20th Anniversary at Gruene Hall. May 1-2 at Gruene Hall (New Braunfels), celebrating two decades from one of Austin's most enduring live music acts.
  • iHeartCountry Festival. Saturday May 2 at Moody Center (2001 Robert Dedman Dr) — Luke Bryan, Kane Brown, Shaboozey, Parker McCollum, and Riley Green; nationally broadcast, and Shaboozey's "A Bar Song (Tipsy)" tied for the longest-running #1 in Billboard Hot 100 history.
  • Crobot Day 2026. Saturday May 2, 7 PM at Come and Take It Live — heavy rock with Crobot, Mothership, Eagle Claw, and Austin's Transit Method; tickets from $22.

Austin's HOME Initiative: The Deregulation Data Is In, and It Works

A few days ago we covered Austin's cost-of-living problem — rising VC valuations, slipping affordability rankings, the squeeze on the people who actually built this city. Today, the other side of that ledger. New data from the Austin Board of Realtors shows Austin's HOME Initiative — adopted in 2024, allowing up to three housing units per single-family lot and slashing minimum lot sizes from 5,750 to 1,800 square feet — is producing results that should embarrass every city that chose a different path. According to Taylor Smith, ABoR's Deputy Director of Government Affairs, HOME-built units are selling at a 53% median price discount versus traditional single-family new construction: $750,000 compared to $1.58 million built in the same year. That's not a rounding error. That's zoning deregulation doing exactly what every honest economist said it would do. Meanwhile, Realtor.com's February 2026 data shows Austin led all 50 major metros in cumulative rent decline from peak, down 18.2% — the softest large rental market in the country, down 6.6% year-over-year as of January 2026. Austin City Council is expected to discuss potential HOME Initiative updates at its May 7 meeting.

The honest caveat is this: $750,000 is still $750,000. A HOME-built unit at that price point is not a working-class starter home. Supply reform is necessary but not alone sufficient — the cost of land, construction labor, and financing still layers on top of whatever the zoning allows. One duplex on Rockwood Lane listed at nearly $800K made that point plainly. But the direction of the data is unambiguous: Austin deregulated its zoning and produced the steepest rent decline of any large American city. San Francisco debated it. New York commissioned a study. Austin built 1,800-square-foot lots and let the market work. The lesson here isn't that Austin solved affordability — it's that Austin proved the mechanism. Every city that is still stuck in NIMBY obstruction, minimum lot size politics, and single-family-only zoning warfare is now running out of excuses. Austin's not a utopia. It's a proof of concept.

Sources: KVUE / Austin Board of Realtors | Realtor.com February 2026 Rental Report

Weird Austin

One Thing

Austin is simultaneously building the world's largest chip factory and proving that zoning deregulation crashes rents faster than anywhere in America. Both stories say the same thing: build more, regulate less, and watch what happens. That's the city in a sentence.

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