Elon Musk to Invest $16.8 Billion in Terafab AI Chip Plant for Tesla and SpaceX
Business
SpaceX and Tesla will initially invest $16.8 billion to build Terafab, a major semiconductor manufacturing complex in Texas. If the project is fully developed, total investment could reach $119 billion.
The facility will be located in Grimes County, Texas. It is designed to manufacture, test and package advanced logic and memory chips primarily for artificial intelligence applications, helping meet the computing needs of Tesla and SpaceX.
The chips are expected to power Tesla’s Optimus humanoid robots, Cybercab autonomous vehicles and autonomous-driving systems. SpaceX plans to use high-performance processors in its projects involving space-based data centers.
The project calls for a vertically integrated manufacturing complex covering about 100 million square feet, or approximately 9.3 million square meters. Production, testing and packaging of chips are expected to be brought together at the same site.
Terafab is expected to create at least 3,000 jobs. Intel is also involved in the project after SpaceX established a partnership with the chipmaker to expand manufacturing capabilities.
Musk first announced plans for Terafab in March 2026. The project is planned as a phased expansion, with total investment potentially reaching $119 billion if all planned stages are completed.
The chips are expected to power Tesla’s Optimus humanoid robots, Cybercab autonomous vehicles and autonomous-driving systems. SpaceX plans to use high-performance processors in its projects involving space-based data centers.
The project calls for a vertically integrated manufacturing complex covering about 100 million square feet, or approximately 9.3 million square meters. Production, testing and packaging of chips are expected to be brought together at the same site.
Terafab is expected to create at least 3,000 jobs. Intel is also involved in the project after SpaceX established a partnership with the chipmaker to expand manufacturing capabilities.
Musk first announced plans for Terafab in March 2026. The project is planned as a phased expansion, with total investment potentially reaching $119 billion if all planned stages are completed.
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