SpaceX to Build $17 Billion AI Fab Facility in Texas

SpaceX plans to build a massive semiconductor fabrication facility in Texas. An initial investment will be more than $16.8 billion. The fab would be designed to support growing demand for AI chips across its satellite and space operations.

Texas governor Greg Abbott announced the first phase of the Terafab project, which is expected to create 3,000 jobs and has been backed by a $30 million Texas Enterprise Fund grant. The project also qualifies for incentives through the state’s Jobs, Energy, Technology, and Innovation programme. The planned 100-million-square-foot site in Grimes County, Texas, will combine logic, memory, and advanced packaging under one roof, enabling SpaceX to consolidate parts of the semiconductor production chain as it seeks to avoid constraints in global chip supply.

SpaceX CEO Elon Musk stated that the facility will help the company produce AI chips at scale for use on Earth and in space. The project is expected to support future hardware requirements across Starlink, Starship and broader space infrastructure. Abbott stated Texas was selected because of its business climate, workforce, infrastructure and logistics advantages. Local officials said the development could provide a long-term economic boost for Grimes County and Southeast Texas, with roles spanning engineering, technical operations and plant management.

The investment deepens SpaceX’s presence in Texas, where it already operates its Starbase headquarters, a site in Cameron County and a Starlink manufacturing facility in Bastrop. SpaceX is pitching Terafab as part of a wider push to secure in-house chip capacity for next-generation aerospace, connectivity and AI workloads, as demand for customised compute grows across the company’s satellite broadband and launch businesses.