# Musk confirms $16.8bn Terafab chip campus in Texas

> Tesla and SpaceX confirmed Terafab, a $16.8bn Texas chip campus, on 6 August 2026.

*Tesla and SpaceX will jointly build a vertically integrated 2nm chip plant in Grimes County, with a much smaller first phase than earlier filings suggested.*

By Behzad Hosseini · FeaturedDaily
Canonical: https://featureddaily.com/news/musk-confirms-16-8bn-terafab-chip-campus-in-texas

**What happened:** Tesla and SpaceX, both led by Elon Musk, confirmed Terafab on 6 August 2026 — a vertically integrated chip-making campus in Grimes County, Texas, about an hour north-west of Houston.

**The numbers:** The first phase carries a $16.8 billion price tag, well below the roughly $55 billion first-phase figure floated in May county filings, out of a total plan that could reach $119 billion. The site would span more than 100 million square feet and create at least 3,000 jobs.

**The details:** Terafab will handle logic, memory, packaging and testing in-house, producing two custom 2-nanometre chip families: one for Tesla cars and Optimus robots, another for SpaceX's orbital data-centre satellites. Water will come from the Gibbons Creek Reservoir, previously used to cool a coal plant shut in 2018.

**Why it matters:** The campus would be more than twice the size of Tesla's 2,500-acre Austin site. Musk has called it the largest and most valuable building on Earth.

**The context:** Musk first unveiled Terafab in March in Austin as a joint Tesla-SpaceX-xAI venture.

**Who's affected:** Texas is backing the project through its JETI programme, a $30 million Texas Enterprise Fund grant and a 10-year 100% local tax abatement. In return, SpaceX must pay the county $20 million a year for 35 years, invest at least $5 billion by 2030, and create 1,800 full-time jobs by 2035.

**In their words:** Musk said: "We're now embarking on the most epic chip-building effort."

**The catch:** SpaceX describes the plan as a framework rather than binding commitments. No construction start date or intellectual-property split between Tesla and SpaceX has been finalised.

**What's next:** Confirmation of a build timeline and the companies' final ownership split over the chip designs will determine how quickly Terafab moves from framework to construction.

## Key takeaways

- First phase is $16.8bn, far below the $55bn once floated
- Campus targets 100m+ sq ft and 3,000+ jobs
- SpaceX must invest $5bn and hire 1,800 by 2030-2035

## Sources

- [SpaceX makes Terafab official, confirms initial $16.8 billion investment](https://www.statesman.com/business/article/elon-musk-terafab-spacex-grimes-county-22375537.php) — Austin American-Statesman, 2026-08-06
- [Tesla and SpaceX will invest $16.8B to start building Terafab chip factory in Texas](https://techcrunch.com/2026/08/06/tesla-and-spacex-will-invest-16-8b-to-start-building-terafab-chip-factory-in-texas/) — TechCrunch, 2026-08-06