SpaceX has a $55 billion plan to build AI chips in Texas
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Anthropic — What company has the best second artificial intelligence model at the end of June?
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FollowSee All ScienceSpaceX has a $55 billion plan to build AI chips in TexasThe “Terafab” plant could cost SpaceX up to $119 billion total, according to a court filing. The “Terafab” plant could cost SpaceX up to $119 billion total, according to a court filing. by Stevie Bonifield Stevie BonifieldNews WriterPosts from this author will be added to your daily email digest and your homepage feed.
Technical Details
FollowSee All by Stevie BonifieldMay 7, 2026, 7:26 PM UTC Photo: Mario Tama / Getty Images Stevie Bonifield Stevie BonifieldPosts from this author will be added to your daily email digest and your homepage feed. FollowSee All by Stevie Bonifield is a news writer covering all things consumer tech. Stevie started out at Laptop Mag writing news and reviews on hardware, gaming, and AI.
Elon Musk’s plans to get into the AI chip manufacturing business are going to be costly. As the New York Times and CNBC report, SpaceX is planning to invest at least $55 billion into its “Terafab” chip plant in Austin, Texas. That’s according to the details of a public hearing notice filed in Grimes County, Texas, for a meeting to request tax breaks for the project.
The company says that if additional phases are constructed, its investment could someday balloon to $119 billion total. When Musk initially announced the project in March, he shared ambitious plans for it to produce enough chips to support up to 200 gigawatts per year of computing power on Earth, and up to one terawatt in space. SpaceX is also trying to expand its data center footprint on Earth, and currently operates a “Colossus” data center in Memphis, Tennessee, that recently signed an agreement to power Anthropic’s AI models.
Industry Implications
The Texas plant will be run by SpaceX and Tesla and make chips for both companies, which Musk has said will be used for AI, robotics, and space-based data centers. Last month, Intel announced that it would help design and build Terafab, saying, “Our 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. ”Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates.
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This advance offers important signals about the future of the sector, and the tech world is watching closely.
