A proposal posted on the Grimes County, Texas, website describes plans by SpaceX and affiliated companies to build a multi‑phase semiconductor and advanced‑computing fabrication campus. The filing lists an initial estimated investment of roughly $55 billion with a potential total cost of up to $119 billion.
The project, labeled "Terafab," is presented as a vertically integrated semiconductor manufacturing and advanced‑computing fabrication facility on a single campus. The filing says the site would produce chips aimed at AI servers, satellites, a proposed SpaceX data center in space, and autonomous Tesla vehicles and robots. Musk has described a future output goal equivalent to "1 terawatt of power per year."
The document says the effort involves SpaceX and affiliated firms, expects Tesla to contribute resources, and has engaged Intel in the planning. The filing frames Terafab as a staged investment in next‑generation manufacturing and compute fabrication, implying phased construction and capacity expansion over time.
The proposal appears tied to Elon Musk’s broader push to secure dedicated compute for xAI and its Grok models: it was filed as he has emphasized the need for more in‑house computing capacity and linked xAI with SpaceX to capture rising AI compute demand. The filing also cites a combined entity valuation of $1.25 trillion and states the group is expected to go public in June, according to the report.
If realized, Terafab would rank among the largest private investments in chip fabrication and mark a major move toward vertical integration to guarantee supply for Musk’s AI and robotics ambitions. Musk summed up the rationale bluntly: "We either build the Terafab or we don't have the chips, and we need the chips," stressing his view that current semiconductor production cannot meet his companies’ projected needs.
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