SpaceX and Tesla Plan Most Expensive Building in the World With $16.8 Billion Chip Factory

SpaceX and Tesla have unveiled plans to build Terafab, a $16.8 billion (about KSh2.17 trillion) semiconductor manufacturing complex in Grimes County, Texas. If completed as planned, the facility would rank among the most expensive buildings ever constructed, reflecting the surging global demand for artificial intelligence computing infrastructure.

The factory will combine semiconductor fabrication, advanced chip packaging and testing within a single integrated campus. The approach is intended to streamline production while reducing dependence on external suppliers for advanced AI processors.

According to the companies, the facility is being designed to support a combined computing demand expected to exceed one terawatt. The chips will power products including Tesla's Optimus humanoid robots, Cybercabs and SpaceX's future computing infrastructure.

The initial phase is expected to cover approximately 100 million square feet (about 9.3 million square metres) and create at least 3,000 high-skilled jobs. Company projections indicate the development could expand significantly in future phases, with total investment potentially reaching $119 billion (about KSh15.39 trillion).

Texas Governor Greg Abbott welcomed the investment, saying the project reinforces the state's position as a leading destination for advanced manufacturing, semiconductor production and artificial intelligence industries.

The announcement highlights the growing race among major technology companies to secure domestic chip manufacturing capacity as AI applications continue to drive unprecedented demand for high-performance processors.