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Tesla and SpaceX will invest $16.8B to start building ‘Terafab’ chip factory in Texas
8:21 AM PDT · August 6, 2026
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Tesla and SpaceX said Thursday that “Terafab,” the advanced chip factory they are jointly developing, will be built in Grimes County, Texas, outside Houston, and that they will make an initial investment of $16.8 billion in the project.
The factory will be “the largest and most valuable building on Earth by far,” Elon Musk, CEO of both companies, wrote in a post on Thursday. More than 100 million square feet of manufacturing space is planned for the facility, according to SpaceX.
The companies say the facility will employ at least 3,000 people from Grimes and nearby Brazos County.
“The facility will be an advanced semiconductor fab that will bridge the divide between current global chip supply and the compute demand of the future,” a post on SpaceX’s website reads.
The animus behind Terafab is that Musk’s vision of the future — one where millions of robots take over human jobs, robotaxis do all the driving, and satellites become data centers for AI training and inference — requires a phenomenal amount of computing power, far more than what current production rates support.
SpaceX alone has suggested in filings that it may spend as much as $119 billion on the project across a “multi-phase” construction plan — although the company didn’t talk about Terafab at all on its first earnings call earlier this week.
Intel has said it will contribute to the Terafab project, although it’s been cagey about its exact contributions.
Read Original at TechCrunch →