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Elon Musk's Tesla and SpaceX have picked Grimes County, Texas, as the site for Terafab, their jointly developed advanced chip factory, committing an initial $16.8 billion to get construction moving on what Musk is billing as the largest building ever built.
Musk, who serves as chief executive of both companies, described the planned facility as "the largest and most valuable building on Earth by far". SpaceX said more than 100 million square feet of manufacturing space is planned for the site, which sits outside Houston.
The two companies say the facility will create at least 3,000 jobs across Grimes and neighboring Brazos County.
The scale of the ambition behind Terafab is hard to overstate. SpaceX has indicated in filings that total spending on the project could reach as much as $119 billion across a multi-phase construction plan, though the company made no mention of Terafab on its first-ever earnings call earlier this week. The $16.8 billion announced Thursday represents the opening commitment.
The factory is designed to be vertically integrated, handling the manufacturing, packaging and testing of advanced logic and memory devices under one roof. SpaceX described it as a facility that will "bridge the divide between current global chip supply and the compute demand of the future."
The chips produced at Terafab will serve two broad purposes. Some will be optimized for edge computing and inference, powering hardware like Tesla's Optimus humanoid robots and its self-driving Cybercab robotaxis. Others will be high-power chips built to run SpaceX's space-based data centers, part of Musk's broader push to position satellites as infrastructure for artificial intelligence training and inference.
Intel has previously confirmed it will contribute to the Terafab project, though it has declined to detail the exact nature of its involvement.
The announcement comes with some community friction already building. Hundreds of residents packed a Grimes County meeting on Wednesday to raise concerns about millions of dollars in tax incentives awarded to the project and what they described as a lack of transparency in how those deals were structured.
School district officials adopted a more welcoming tone. Anderson-Shiro Consolidated Independent School District Superintendent Sarah Borowicz, in a statement released through the Texas Governor's office, called the moment a defining one for the district.
On water, SpaceX said it is committing to draw from the local Gibbons Creek Reservoir rather than tapping into local groundwater supplies, a concession that appeared aimed at addressing one of the community's environmental concerns.
Texas Governor Greg Abbott's office put its backing behind the project publicly, framing the announcement as a major economic development win for the state.
Terafab sits at the intersection of every major bet Musk is making on the future: autonomous vehicles, humanoid robots, satellite computing and AI at scale. Whether the factory can be built at the speed and size he is projecting will depend on execution, regulatory clearance and whether demand for that volume of chips materializes on the timeline his companies are assuming.
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