SpaceX, Elon Musk’s space company that includes his AI company, xAI, is considering an initial investment of $55 billion to construct a semiconductor factory in Grimes County, Texas, as per a proposal on the county website.
The total projected expenditure on the project is $119 billion, intended to create a “multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility,” according to the filing.
Musk unveiled plans for the project, named “Terafab,” which will involve contributions from Tesla. Chipmaking giant Intel has joined the initiative to develop chips for AI servers, satellites, SpaceX’s proposed space data center, as well as Tesla’s autonomous vehicles and robots.
The manufacturing facility aims to produce enough chips to generate 1 terawatt of power annually in the future, as current semiconductors are deemed insufficient for Musk’s AI and robotics needs. “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab,” he stated.
However, Musk tweeted on Tuesday that Grimes County, Texas, is only one of several potential sites for the factory.
The filing coincides with Musk’s efforts to secure sufficient computing power for xAI’s Grok series of AI models. Additionally, he plans to meet the demand for AI compute by building data centers in space, a major factor for merging xAI with SpaceX. The combined company, valued at $1.25 trillion, is expected to go public in June.