SpaceX Plans $55 Billion AI Chip Manufacturing Plant in Texas

SpaceX plans to invest at least $55 billion in Terafab, an AI chip manufacturing plant in Austin, Texas, announced by Elon Musk in March 2026. The investment could reach $119 billion if additional phases are built. Intel announced in April 2026 it would help design and build the facility. The plant will produce chips for SpaceX and Tesla to support AI, robotics, and space-based data centers, targeting up to 200 gigawatts per year of computing power on Earth.

Terafab chip plant investment

• ▪SpaceX filed a public hearing notice in Grimes County, Texas, for a meeting to request tax breaks for the Terafab project
• ▪SpaceX's investment in the Terafab chip plant could balloon to $119 billion total if additional phases are constructed
• ▪SpaceX is planning to invest at least $55 billion into its Terafab chip plant in Austin, Texas
• ▪The Terafab chip plant will be run by SpaceX and Tesla and make chips for both companies

Computing power targets

• ▪Elon Musk's plans for the Terafab project include producing enough chips to support up to one terawatt of computing power in space
• ▪Chips made at the Terafab plant will be used for AI, robotics, and space-based data centers
• ▪Elon Musk announced the Terafab project in March 2026 with plans for the plant to produce enough chips to support up to 200 gigawatts per year of computing power on Earth

SpaceX data center operations

• ▪SpaceX's Colossus data center in Memphis, Tennessee signed an agreement to power Anthropic's AI models
• ▪SpaceX operates a Colossus data center in Memphis, Tennessee

Intel partnership

• ▪Intel announced in April 2026 that Intel would help design and build the Terafab chip plant
• ▪Intel stated that Intel's ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab's aim to produce 1 TW/year of compute to power future advances in AI and robotics

Perspective of Intel

• ▪Intel stated that Intel's ability to design, fabricate, and package ultra-high-performance chips at scale will help accelerate Terafab's aim to produce 1 TW/year of compute to power future advances in AI and robotics