Aerospace major SpaceX and electric vehicle maker Tesla are investing $16.8 billion to build “Terafab”, an advanced AI semiconductor complex in Texas designed to narrow a looming gap in global chip supply.
The first phase of the vertically integrated, 100-million-square-foot facility in Grimes County, Texas will create at least 3,000 high-paying jobs for engineers, technicians, and plant operators with future expansion phases expected to push total investment significantly higher, SpaceX said in a statement on its website on Thursday.
“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,” SpaceX Founder and CEO Elon Musk said in the statement.
The mega facility aims to meet an anticipated requirement of over one terawatt of computing power for Musk’s ventures. The plant will make, package, and test advanced logic and memory chips under a single roof to power Tesla’s Optimus humanoid robots and Cybercabs, as well as high-performance processors for SpaceX’s planned orbital data centres.
The move comes as Musk deepens the integration of artificial intelligence work across his businesses after SpaceX acquired AI startup xAI earlier this year. Welcoming the project, Texas Governor Greg Abbott announced a USD 30 million Texas Enterprise Fund performance grant, saying in an official press release that the facility will “accelerate chip production in Texas at an unprecedented scale and expand economic opportunity across the region”.
Overall, the Terafab project marks a major joint investment by SpaceX and Tesla in AI chip manufacturing, combining large-scale production plans with job creation and support from the Texas government.
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