Tesla and SpaceX will invest $16.8B to start building ‘Terafab’ chip factory in Texas

Tesla and SpaceX announced on Thursday that they will jointly develop an advanced chip factory called "Terafab" in Grimes County, Texas, outside Houston. CEO Elon Musk stated the factory will be the "largest and most valuable building on Earth by far." The site will cover over 100 million square feet, according to SpaceX. Both companies plan to invest $16.8 billion in the facility, which will create at least 3,000 jobs in Grimes and nearby Brazos County.

Musk's vision of a future with millions of robots taking over human jobs, robotaxis, and AI training centers demands a significant increase in computing power, something current production rates cannot meet. SpaceX has suggested it may spend up to $119 billion on the project across multiple phases. Intel is also contributing to Terafab, though details of its involvement are unclear.

The facility will be vertically integrated, handling manufacturing, packaging, and testing of advanced logic and memory devices. SpaceX plans to use water from the local Gibbons Creek Reservoir, avoiding local groundwater. A county meeting held on Wednesday saw hundreds of residents express concerns about tax breaks and transparency, but school district officials praised the agreement, emphasizing its potential to benefit students and prepare them for the future.