Tesla and SpaceX announce $16.8 billion Terafab chip plant in Texas

Tesla and SpaceX have confirmed a joint venture to build a massive semiconductor manufacturing facility named ‘Terafab’ in Grimes County, Texas. The project involves an initial investment of $16.8 billion for a 100-million-square-foot plant, which the companies claim will become the largest and most valuable building on Earth. A multi-phase expansion could eventually reach a total investment of $119 billion.

The facility aims to address a projected gap between global chip supply and the rising compute demand for Tesla’s electric vehicles and Optimus robots, as well as SpaceX’s AI compute and data center requirements. By vertically integrating chip production, the companies intend to secure their supply chains, reduce geopolitical reliance on manufacturers in Taiwan, and capture operating margins currently held by external suppliers.

Elon Musk described the planned Texas site as being significantly larger than the current record-holder for the world's largest building, the New Century Global Center in China. The project is intended to produce 1 terawatt of compute to support future technological growth.