SpaceX, Tesla confirm Grimes County as permanent home for TeraFab

SpaceX and Tesla said Grimes County, Texas will be the permanent home for TeraFab, the chip venture Elon Musk first unveiled in March, after a $10 million payment met a deadline in the project's tax-abatement agreement. SpaceX has described the campus as a more than 100 million-square-foot site that could create at least 3,000 jobs, with water drawn from Gibbons Creek Reservoir, power from on-site natural-gas plants and labor access to more than 15.9 million people within a three-hour radius. The companies have previously disclosed an initial $16.8 billion commitment, while SpaceX estimates the first phase could cost $55 billion and the full build-out as much as $119 billion; a prototype fab is already under way at Giga Texas. At full scale, TeraFab is intended to bring together SpaceX, Tesla, xAI and Intel, target 1 terawatt of annual AI compute, and reach 1 million wafer starts per month using Intel's 14A process, even as SpaceX has warned foundry constraints at TSMC and Samsung Foundry may persist and the project may not fully close the chip gap.