SpaceX and Tesla Plan a 100-Million-Square-Foot AI Chip Factory

SpaceX announced the location on August 6 and said foundations are now being built. Its 53-second video moves through a computer-generated campus and ends on an aerial rendering of four long factory buildings.

The factory connects robots, cars, and space

SpaceX says Terafab will make chips tuned for edge computing and inference. In plain language, those chips would help a machine use a trained AI model to understand sensor data and decide what to do without sending every task to a distant server.

That makes the factory part of the physical AI stack. SpaceX names Tesla’s Optimus robots and self-driving Cybercabs as planned customers. It also says higher-power chips would run its proposed data centers in space.

The Terafab project site (opens in a new tab) sets a long-term target of producing one terawatt of compute hardware each year. SpaceX also claims its combined demand with Tesla will exceed one terawatt, far above what today’s suppliers can provide.

A terawatt normally measures power, not a number of chips. The companies have not explained the exact processors, manufacturing process, or output behind that figure. SpaceX’s prospectus says Intel joined the project in April, but it also says individual projects still require separate agreements covering timelines, milestones, and spending.

What 100 million square feet looks like

SpaceX compares Terafab’s planned manufacturing space with Tesla’s 10-million-square-foot Texas Gigafactory. By that measure, Terafab would be ten times larger. Two visual comparisons make that difficult number easier to see.

Nic Cruz Patane’s size comparison on X (opens in a new tab) places four familiar megastructures beneath the proposed factory.

Dr Singularity shared this vertical comparison on X (opens in a new tab).

Most of Terafab still exists on paper

SpaceX estimates that the first phase will require about $16.8 billion from SpaceX and Tesla, with later expansion pushing the total higher. It says the site will use water from the Gibbons Creek Reservoir instead of local groundwater and will include wastewater treatment, reuse, and conservation systems.

The project has moved beyond a concept video. The Texas Comptroller lists Terafab applications (opens in a new tab) for tax incentives, and Grimes County lists executed agreements with SpaceX. But the public announcement does not give a production start date.

The next proof will be a construction schedule, a named chip process, and a working production line. That is when this giant Texas render can begin turning into the silicon behind robots, Cybercabs, and SpaceX’s plans for computing beyond Earth.