SpaceX, Tesla plan chip plant to dwarf world’s largest building

SpaceX and Tesla are building a semiconductor manufacturing complex in Grimes County, Texas, that the companies say will become the largest building on Earth by floor area — more than five times the size of the current record-holder.

Fortune reports that the facility, named Terafab, is planned at more than 100 million square feet, well ahead of the New Century Global Center in Chengdu, China, which holds the floor-area record at roughly 18.9 million square feet. Mr. Musk described the project on X as “the largest and most valuable building on Earth by far.”

Gov. Greg Abbott confirmed the project in a Thursday press release, saying the first phase represents a capital investment of more than $16.8 billion and will create 3,000 jobs. Texas has also extended SpaceX a $30 million grant through the Texas Enterprise Fund.

“Texas is where big ideas grow even bigger,” Gov. Abbott said.

That $16.8 billion figure is well below earlier cost estimates tied to the project. A Grimes County public notice tied to a June property-tax abatement hearing put the initial phase at roughly $55 billion, with total investment across all four planned phases reaching as high as $119 billion, Bloomberg reported in May. Neither company has publicly reconciled the difference between that figure and the $16.8 billion cited in this month’s announcement.

A tax-incentive filing submitted to the Texas Comptroller under the state’s Jobs, Energy, Technology and Innovation program identifies the project as a joint venture of Tesla, SpaceX and Mr. Musk’s artificial intelligence company, xAI — a detail absent from Gov. Abbott’s release. The filing seeks to cap the taxable value of the facility’s property for school district maintenance-and-operations taxes at 50% of appraised value for 10 years per phase, which the filing estimates would cut the effective M&O tax burden by roughly 48%. The company argued in the filing that without the limitation, “the project would likely be relocated outside Texas,” citing Arizona as a more favorable alternative.

Terafab’s website describes the facility as designed to produce more than 1 terawatt of compute annually, combining chip logic, memory and advanced packaging under one roof. The site frames that figure against “.5 TW” of “current annual U.S. consumption” — a comparison Terafab makes on its own site, though it mixes a compute-output figure with an electricity-consumption metric and shouldn’t be repeated as a validated energy comparison. The site also ties the project to a vision that includes large numbers of Tesla Optimus robots and AI chip production for use on Earth and in space.