Intel CEO Lip-Bu Tan announced on Tuesday that his company will collaborate with Elon Musk on Terafab, a massive chip development and fabrication project for SpaceX and Tesla. The deal could cost billions, but how it pans out remains unclear.

The partnership may be mostly handshakes right now, as neither Intel nor Tesla have filed any paperwork with the US SEC. It's hard to gauge exactly what Intel is contributing, beyond its advanced packaging capabilities, which Tesla likely already has in-house. Analysts predict that Musk will want a lot of customization, but whether this can be achieved on such a large scale is doubtful.

The intellectual property control is another question mark. With Intel owning the manufacturing know-how, how much freedom does Musk have to innovate? The success of Terafab could hinge on these details, as well as how willing Intel and Tesla are to test their partnership without alienating other key partners like TSMC.

This collaboration highlights the ongoing struggle in chip-making, where companies must balance innovation with maintaining existing relationships. Whether it's a leap forward or a misstep remains to be seen.