# SpaceX 'Terafab' — $55B First Phase, $119B Cap on a 2nm Texas Chip Mega-Fab for AI

> SpaceX, Tesla, xAI, and Intel team up on a $55–119B Texas mega-fab to make AI chips in-house.

- Org: SpaceX
- Date: 2026-05-06
- Category: ecosystem
- Source: https://techcrunch.com/2026/05/06/spacex-may-spend-up-to-119-billion-on-terafab-chip-factory-in-texas/
- Canonical page: https://ai-tldr.dev/releases/spacex-terafab-grimes-county/

## In short

Grimes County tax filing reveals SpaceX-Tesla-xAI joint venture Terafab — a vertically integrated 2nm fab targeting AI servers, Tesla autonomy, robots, and Starlink, with Intel as manufacturing partner.

## What it is

Terafab is a multi-phase semiconductor manufacturing and advanced computing fabrication facility being filed for in Grimes County, Texas, on a 1,000+ acre site that previously hosted the Gibbons Creek Reservoir coal plant. It is a joint venture of SpaceX, Tesla, and xAI, with Intel joining in April 2026 as strategic manufacturing partner.

## How it works

First-phase capital expenditure is $55 billion, with a stated cap of $119 billion across multiple build phases. The facility is designed to produce advanced 2-nanometer chips for AI servers, Starlink satellites, SpaceX's planned space-based data centers, Tesla autonomous vehicles, and Tesla/Optimus robots. Long-term goal is to ship enough silicon to power 1 terawatt of compute annually. Grimes County Commissioners Court holds the public hearing on the property tax abatement on June 3.

## Why it matters

Frontier AI labs and their hardware suppliers spent 2024–2025 fighting over fixed Nvidia/TSMC supply. With Terafab, Musk's combined SpaceX-xAI entity (post-merger valuation ~$1.25T) is signaling it intends to vertically integrate chipmaking instead of being a customer. If the abatement clears, this is the largest single private chip-fab investment ever announced in the US.

## Who it's for

AI infrastructure watchers, semiconductor industry, Texas economic development

## Try it

Public hearing 9 a.m. CT, June 3, 2026, Grimes County Justice & Business Center

## Links

- [TechCrunch Report](https://techcrunch.com/2026/05/06/spacex-may-spend-up-to-119-billion-on-terafab-chip-factory-in-texas/)
- [Tom's Hardware Filing Detail](https://www.tomshardware.com/tech-industry/spacex-files-for-55-billion-semiconductor-fab-in-rural-texas)
- [Yahoo Finance Coverage](https://finance.yahoo.com/markets/stocks/article/musks-spacex-files-initial-55-billion-spend-for-terafab-chip-factory-in-texas-120356799.html)