SpaceX and Tesla have begun building Terafab, an AI chip manufacturing complex in Texas that Elon Musk's companies say will be the largest of its kind in the world.
According to Tom's Hardware, the facility is taking shape around a $16.8 billion initial capital investment and roughly 100 million square feet of manufacturing space — about three times the size of Samsung's Pyeongtaek campus, one of the biggest chip sites on the planet. Assembly Magazine, Communications Today and newsmobile.in all report the same $16.8 billion commitment from the two companies, and ThePCEnthusiast reports that SpaceX has confirmed the Terafab plan directly.
One source goes considerably further on cost. Forkast puts the project at $119 billion, framing it as the most expensive chapter yet in what it calls the "compute landlord" thesis — the idea that the companies who own AI computing capacity, rather than rent it, hold the real leverage. The gap between the two numbers appears to be the difference between the initial capital outlay and the full lifetime build; the reporting available doesn't reconcile them, so treat $16.8 billion as the confirmed starting figure and $119 billion as a single outlet's larger estimate.
What's notable is who is doing the building. Chipmaking at this scale is normally the business of dedicated foundries like TSMC or Samsung. Here, a rocket company and a carmaker are proposing to manufacture their own AI silicon, an unusually vertical bet for firms whose products already depend heavily on custom chips.
It matters because if Terafab is built anywhere near the announced scale, it would move a meaningful slice of advanced AI chip production onto U.S. soil and under the control of a customer rather than a supplier — a shift in who sets the terms for the compute that AI runs on.