09/13/2026
Big things are coming to Grimes County
SpaceX and Tesla just announced they're building a chip factory in Texas that will be MORE THAN FIVE TIMES the size of the current largest building on Earth and the business story underneath that headline is bigger than the building itself.
It's called Terafab.
Located in Grimes County, Texas, the facility will span over 100 MILLION square feet. For context, the current world record holder, the New Century Global Center in Chengdu, China, sits at 18.9 million square feet. Terafab doesn't just break that record. It obliterates it.
Elon Musk put it simply on X: "Terafab Texas will be the largest and most valuable building on Earth by far. And it will be stunningly beautiful."
Here's what this facility is actually being built to do:
- Manufacture, package, and test advanced AI chips entirely under ONE roof
- Produce chips specifically for Tesla's Optimus robots and self-driving Cybercabs
- Supply chips for SpaceX's planned space-based data centers
- Operate at what SpaceX calls "terawatt scale" production capacity
- Create 3,000 direct jobs in Phase 1 alone with total investment potentially reaching $119 BILLION across all four planned phases
And here's the strategic reason this exists beyond the ambition of the number.
SpaceX's own press release stated it plainly: "The looming gulf between chip supply and demand is at the core of Terafab's necessity." The AI boom has created a chip shortage so severe that even two of the most well-funded technology companies on the planet decided it was cheaper and more strategically sound to BUILD THEIR OWN chip manufacturing operation than to keep waiting in line behind everyone else.
Texas Governor Greg Abbott confirmed a $16.8 billion initial investment and a $30 million Texas Enterprise Fund grant. Hundreds of Grimes County residents showed up to a county meeting raising concerns about tax incentives and transparency.
The full four-phase investment could reach $119 billion according to Bloomberg's reporting from a June property-tax abatement hearing.
That's not a factory. That's an economy.
