Tesla, SpaceX confirm largest Terafab chip factory in Texas

Elon Musk’s SpaceX and Tesla have taken a significant step by investing $16.8 billion to build “Terafab” in Texas as the companies scramble to lock down the chip capacity that the billionaire has called crucial to their future.

The facility is designed to bridge the divide between global chip supply and the more than 1 terawatt of computing power that SpaceX and Tesla expect to need over the coming year.

Musk posted a caption on social platform X that reads: “Terafab Texas will be the largest and most valuable building on Earth by far.”

SpaceX stated on Thursday that subsequent growth waves could push aggregate funding much higher and the facility will employ at least 3,000 people.

Musk stated “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.”

The vertically integrated 100-million-square-foot Terafab plant will package and confirm the physical chip matches design specifications under one roof while also producing processors needed to power Tesla’s Optimus robots and high-power chips to run SpaceX’s space-based data centers.