Exclusive news, data and analytics for financial market professionalsLearn more aboutRefinitiv
The silhouette of Elon Musk and SpaceX logo are seen in this illustration created on June 11, 2026. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab
-
Companies
Follow
Follow
Aug 6 (Reuters) - Elon Musk's SpaceX <SPCX.O> and Tesla <TSLA.O> will initially invest $16.8 billion to build Terafab, an advanced AI semiconductor complex in Grimes County, Texas, as the companies race to secure the chip capacity that the billionaire has called essential to their future.
The facility is intended at narrowing the gap between global chip supply and the more than 1 terawatt of computing power that SpaceX and Tesla expect to need in the coming years.
The Reuters Inside Track newsletter is your essential guide to global sports news. Sign up here.
Advertisement · Scroll to continue
Future expansion phases could push total investment much higher, SpaceX said in a statement on its website on Thursday, adding that the facility would employ at least 3,000 people.
"The Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs in the Lone Star State, and enabling us to produce AI chips at scale for use on Earth and in space," Musk said.
Musk has been tightening integration of AI efforts across his companies, with SpaceX acquiring his startup xAI earlier this year in a deal focused on building space-based data centers, before going public in June in the largest-ever IPO.
Advertisement · Scroll to continue
The vertically integrated, 100-million-square-foot Terafab plant will make, package and test advanced logic and memory chips under one roof, producing processors needed to power Tesla's Optimus robots and Cybercabs, as well as high-power chips to run SpaceX's space-based data centers.
A May filing showed SpaceX has proposed an initial investment of $55 billion to build the Terafab, with the total amount rising to $119 billion if extra phases are completed.
To aid the efforts, SpaceX earlier this year partnered with Intel, which has been trying to expand its chip contract manufacturing business as part of a turnaround effort.
Tesla broke ground in April on a research facility at the North Campus of its Giga Texas plant, a precursor to Terafab.
The Grimes County site sits near the Gibbons Creek Reservoir, whose water the companies plan to use for industrial operations rather than local groundwater.
It adds to SpaceX and Tesla's growing Texas footprint, alongside sites at Starbase, Bastrop and McGregor.
"Texas is where big ideas grow even bigger," the state's governor, Greg Abbott, said in a statement.
Advertisement · Scroll to continue
Reporting by Aditya Soni and Anhata Rooprai in Bengaluru; Editing by Anil D'Silva
Our Standards: The Thomson Reuters Trust Principles., opens new tab
-
X
-
Facebook
-
Linkedin
-
Email
-
Link
Read Next
- 2 hours agoBusinesscategory
Sandisk, Western Digital weigh on chip sector as high expectations eclipse strong earnings
- 2 hours agoBusinesscategory
US productivity rises faster than expected in second quarter
- 3 hours ago
Microsoft opens its largest India data center hub as AI race heats up
- 1 hour agoLegalcategory
Trump’s tech ties come under bipartisan fire after AI agents go rogue
- 5 hours agoBusinesscategory
Merck raises 2026 profit guidance, beats quarterly estimates
Business
Poland's Orlen second-quarter core profit tops estimates
Energycategory · August 6, 2026 · 11:44 AM EDT · 12 mins ago
Poland's largest energy group Orlen posted a second-quarter adjusted core profit that beat analyst expectations on Thursday, as wider refining and petrochemical margins lifted its downstream business.
Legalcategory Irish tax take up 6% in first 7 months of year after jump in income tax, VAT
11:35 AM EDT
Media & Telecomcategory US agency ends 39% local TV station ownership cap
11:30 AM EDT
category Nigeria's plan to tax crypto transactions could undermine adoption, industry says
11:12 AM EDT
Energycategory India's July fuel consumption rises 3% to four-month high
10:56 AM EDT
Read Original at Reuters →