Elon Musk, the joint CEO for both Tesla and SpaceX, announced on X today that both his listed companies would join hands to invest $16.8Bn in building an advanced chip manufacturing facility in Texas. Called ‘Terafab’, Musk described it as “the largest and most valuable building on Earth by far” and that “it will be stunningly beautiful”.
Terafab Texas will be the largest and most valuable building on Earth by far.
And it will be stunningly beautiful. pic.twitter.com/4NweOqTL7y
— Elon Musk (@elonmusk) August 6, 2026
Texas is central to SpaceX’s launch operations, which is one of the primary reasons as to why Musk has thought of Texas for Terafab. The combined SpaceX and Tesla demand for chips is expected to be in excess of 1 terawatt (TW) of compute, which is significantly larger than the current global supply. This over 100 million square feet large factory will be central to catering to that demand, apart from all the suppliers both companies already have.
In terms of more details, SpaceX said in a press post, that the initial phase of Terafab is estimated to require approximately $16.8 billion in capital investments from SpaceX and Tesla, with potential future expansion phases bringing total investment much higher. The new chip building facility will employ at least 3,000 people, many of whom will be from Grimes and nearby Brazos County — continuing the trend of both companies other Texas sites where between 60% and 80% of new hires are local residents.