In 2025, Intel Corp (NASDAQ:INTC) CEO Lip-Bu Tan said the company could exit its chip manufacturing business if it failed to secure external customers. Today, the company's shares surged as Elon Musk's Tesla Inc. (NASDAQ:TSLA) signaled plans for a deal.<h2>Musk Partnership Sparks Intel Rally</h2>The rally followed Intel's strong first-quarter earnings and comments from CEO Tan, who highlighted a deepening collaboration with Musk's companies, including Tesla, SpaceX and xAI.&#34;I can think of no better partner than Elon Musk,&#34; Tan said on Thursday during Intel's earnings call. &#34;We are excited to explore innovative ways to refactor silicon process technology.&#34;Earlier on Wednesday, it was reported that Tesla plans to use Intel's next-generation 14A manufacturing process for its TeraFab AI project, marking a potential breakthrough moment for Intel's struggling foundry ambitions.<h2>Tesla's TeraFab Push Anchors 14A Chip Adoption</h2>Musk earlier said Tesla plans to use Intel's 14A process for its TeraFab AI chip complex in Austin, a project aimed at powering robotics, autonomous systems and data center workloads.The agreement could become Intel's first major customer win for its advanced manufacturing node.Intel's 14A technology is central to its effort to compete with Taiwan's leading chipmaker, Taiwan Semiconductor Manufacturing Co. (NYSE:TSM), in the global foundry market.<div>Read Also:Intel Stock Pops After Chipmaker Crushes Q1 Expectations: CFO Dave Zinsner Flags Boost From Written-Off Inventory, Signals Continued Price Hikes</div><h2>Intel Signals Broader Foundry Strategy</h2>During the call, Tan said Intel is engaging with multiple customers and highlighted that the Tesla partnership remains in early stages.&#34;It is a very broad relationship, and we will update you as we go,&#34; he said. &#34;We have multiple other customers we are engaging. Stay tuned.&#34;Analysts have viewed the deal as a potential validation of Intel's turnaround strategy, which hinges on attracting external chip manufacturing clients amid surging AI-driven demand.<h2>Intel Beats Q1 Estimates, Raises Outlook</h2>Intel reported earnings of 29 cents per share for the quarter, far exceeding the analyst consensus estimate of 1 cent, according to Benzinga Pro data.Revenue for the period came in at $13.58 billion, beating Wall Street expectations of $12.42 billion by 9.28% and rising from $12.67 billion a year earlier.Looking ahead, Intel projected second-quarter adjusted earnings of 20 cents per share, well above the 9-cent estimate, and forecast revenue between $13.8 billion and $14.8 billion, compared with analyst expectations of $13.07 billion.Price Action: On Thursday, Intel shares jumped 19.95% in after-hours trading to $80.10 after closing the regular session at $66.78, up 2.31%, according to Benzinga Pro data.The stock ranks in the 96th percentile for Momentum on Benzinga Edge, reflecting strong performance across short, medium and long-term trends.<figure class="wp-block-image size-full"><img src="https://imageproxy.pbkrs.com/https://editorial-assets.benzinga.com/wp-content/uploads/2026/04/24020609/Screenshot-2026-04-24-at-7.14.21%E2%80%AFAM-2.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="442" height="277" original-src="https://imageproxy.pbkrs.com/https://editorial-assets.benzinga.com/wp-content/uploads/2026/04/24020609/Screenshot-2026-04-24-at-7.14.21%E2%80%AFAM-2.png"/></figure>Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.<div>Read Also:Intel Stock Soars Nearly 20% Overnight As Jim Cramer Says 'Paranoid' INTC Is Back, Gene Munster Notes AI Boom Still Early</div>Photo Courtesy: Frederic Legrand – COMEO on Shutterstock.com

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Intel CEO Lip-Bu Tan expressed enthusiasm for partnering with Tesla on its 14A chips for the TeraFab AI project, which has led to a surge in Intel's stock. The collaboration is seen as a potential breakthrough for Intel's foundry ambitions, especially as Tesla plans to utilize Intel's technology for robotics and autonomous systems. Following strong Q1 earnings, Intel's shares jumped nearly 20% after the announcement, reflecting positive market sentiment and a potential validation of its turnaround strategy amid rising AI demand.

- Intel Corp's shares surged following news that Tesla plans to utilize Intel's 14A manufacturing technology for its TeraFab AI project, which could significantly benefit Intel's foundry ambitions.  
- CEO Lip-Bu Tan emphasized the importance of the partnership, referring to Musk as a key collaborator as Intel seeks external customers amidst growing demand.  
- Intel also reported strong first-quarter earnings, exceeding expectations, and projected future revenue above analyst forecasts, indicating a positive outlook for the company.

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Intel CEO Lip-Bu Tan Is Excited About Partnering With Tesla On 14A Chips: 'Can Think Of No Better Partner' Than Elon Musk