SpaceX may spend up to $119 billion on ‘TerraFab’ chip factory in Texas

SpaceX, Elon Musk’s space company, which also houses his AI company, XAI, is considering spending $55 billion, at least initially, to build a semiconductor factory in Grimes County, Texas. Proposal on the county website.

According to the filing, the company estimates it could spend a total of $119 billion on the project, which will be a “multi-stage, next-generation, vertically integrated semiconductor manufacturing and advanced computing manufacturing facility”.

Musk has done it before, as mentioned. The project, dubbed “TerraFab”, will also see Tesla contribute resources. The companies have included chip-making giant Intel in the effort, which aims to develop chips for AI servers, satellites, SpaceX’s proposed data centre in space, as well as autonomous Tesla vehicles and robots.

The billionaire has said the manufacturing facility will, sometime in the future, produce enough chips to provide 1 terawatt of power per year, arguing that semiconductor makers are not making chips quickly enough for his companies’ artificial intelligence and robotics needs.

“We either make TerraFab or we don’t have chips, and we need chips, so we make TerraFab,” he wrote.

However, Musk wrote in a tweet Wednesday that Grimes County in Texas was only one of several locations under consideration for the factory.

The filing comes as Musk has doubled down on ensuring that XAI has enough computing power available to train and power the Grok series of AI models. He also intends to capitalise on the demand for AI compute by building data centres in space, which he cites as a big reason for combining XAI with SpaceX. The combined entity is said to be valued at $1.25 trillion and is expected to go public in June.