SpaceX and Tesla have formally confirmed the site for Terafab, an artificial intelligence chip manufacturing complex developed with Intel and xAI. The confirmation followed a $10 million payment SpaceX sent to Grimes County, Texas, satisfying a deadline in a tax abatement agreement signed in June. Foundation preparation is expected to begin almost immediately, with construction renderings expected within days and physical construction within months. SpaceX selected the Gibbons Creek Reservoir, the former home of the Gibbons Creek Steam Electric Station, citing rainwater storage capacity and proximity to Houston's labor pool, with more than 15.9 million people living within a three-hour radius. The company plans to power the complex using its own natural gas plants and has acquired the Navasota River pumping station for stormwater diversion. Intel joined the project in April following a meeting between Musk and Intel CEO Lip-Bu Tan. Musk unveiled the venture in March at the Seaholm Power Plant in Austin. An initial prototype fabrication facility is underway at Tesla's Giga Texas campus. SpaceX estimated the first phase could cost approximately $55 billion, with total costs potentially reaching as high as $119 billion. At full scale, Terafab targets 1 terawatt of annual AI compute capacity, which backers say would roughly double current U.S. semiconductor output, with plans for 1 million wafer starts per month using Intel's 14A process.