# Tesla and SpaceX will invest $16.8B to start building 'Terafab' chip factory in Texas

_Thursday, August 6, 2026 at 8:00 AM EDT · Infrastructure · Developing · Tier 2 — Notable_

![Tesla and SpaceX will invest $16.8B to start building 'Terafab' chip factory in Texas — Primary](https://techcrunch.com/wp-content/uploads/2026/08/2026_08_05_terafab_01_c491ff0b4d.jpg?resize=1200,675)

Tesla and SpaceX said Thursday they will invest $16.8 billion to start building a joint advanced chip factory called Terafab in Grimes County, Texas, the companies announced. The facility is planned to cover more than 100 million square feet of manufacturing space and employ at least 3,000 people from Grimes and nearby Brazos County, according to SpaceX.

Elon Musk, CEO of both companies, wrote in a post on Thursday that the factory will be the largest and most valuable building on Earth by far. A post on SpaceX's website said the facility will bridge the divide between current global chip supply and future compute demand.

Intel has said it will contribute to the Terafab project, though it has not detailed its exact contributions. SpaceX said it is committing to the use of water from the local Gibbons Creek Reservoir instead of local groundwater.

The announcement followed a heavily attended county meeting on Wednesday where hundreds of residents raised concerns about millions of dollars in tax breaks awarded to the project and a lack of transparency.

## Sources

- [techcrunch.com](https://techcrunch.com/2026/08/06/tesla-and-spacex-will-invest-16-8b-to-start-building-terafab-chip-factory-in-texas/)

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Retrieved: 2026-08-07T05:07:40.064Z
Publisher: Tech & Business (techandbusiness.org)