Archive · 7 Aug 2026
SpaceX, Tesla unveil $16.8B 'Terafab' AI chip plant in Texas
A rocket company called SpaceX and an electric car company called Tesla are building a huge new factory together.
The factory, called 'Terafab', will make special computer parts known as AI chips.
It will cost 16.8 billion dollars, which is a very large amount of money.
The factory will be enormous, covering 100 million square feet.
It will create more than 3,000 new jobs for engineers, technicians, and plant operators.
Everything from making to testing the chips will happen inside this one factory.
The chips will help power robots, self-driving cars, and computers planned for space.
The governor of Texas is supporting the project with a 30 million dollar grant.
Leaders say the factory will bring cutting-edge manufacturing to America and create many high-paying jobs.
SpaceX and Tesla are investing USD 16.8 billion to build 'Terafab', an advanced AI semiconductor complex in Grimes County, Texas.
The first phase of the 100-million-square-foot vertically integrated facility will create at least 3,000 high-paying jobs for engineers, technicians, and plant operators.
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 processors for SpaceX's planned orbital data centres.
Texas Governor Greg Abbott announced a USD 30 million Texas Enterprise Fund performance grant to support the project.
The complex aims to meet an anticipated requirement of over one terawatt of computing power for Musk's ventures, as SpaceX tightens AI integration following its acquisition of xAI.
- Who
- SpaceX, Tesla, SpaceX CEO Elon Musk, and Texas Governor Greg Abbott
- What
- Announced plans to build 'Terafab', a USD 16.8 billion AI semiconductor complex
- When
- Announced in a Thursday statement on SpaceX's website (specific date not provided)
- Where
- Grimes County, Texas
- Why
- To narrow a looming gap in global chip supply and meet an anticipated requirement of over one terawatt of computing power for Musk's ventures
- Total investment
- USD 16.8 billion
- Facility name
- Terafab
- Location
- Grimes County, Texas
- Facility size
- 100 million square feet (first phase)
- Jobs created
- At least 3,000
- Government grant
- USD 30 million Texas Enterprise Fund performance grant
- Products
- Advanced logic and memory AI chips
- Use cases
- Tesla Optimus robots, Cybercabs, and SpaceX orbital data centres
