Elon Musk’s SpaceX and Tesla announced Thursday plans to invest $16.8B for the initial phase of construction on Terafab, a chip factory spanning more than 100M SF in Grimes County, Texas, that will employ at least 3,000 people, many of them local hires from the area south of Houston. The companies released a new rendering and a 53-second video of the project. SpaceX previously revealed in public filings in May that it planned to build the project in Grimes County, with total investment potentially reaching up to $119B if expanded to additional phases. Terafab is part of Musk’s effort to accelerate development of advanced chips for AI products, robots, self-driving cars, satellites and space-based data centers. SpaceX and Tesla estimate their combined chip demand will surpass 1 terawatt of compute, equal to 1,000 gigawatts. The announcement encouraged other chip suppliers to expand production to fill the supply-demand gap. Terafab will house manufacturing, packaging and testing of logic and memory devices in one location. The project follows Tesla’s 2021 headquarters move to Austin and SpaceX’s 2024 shift to Starbase. SpaceX went public in June with a $75B initial public offering, and its first earnings report this week showed spending skyrocketed 300% year-over-year to $28.5B in the first half of 2026, mostly for AI data center build-out. The company did not mention the