Future Intelligence: Musk builds his own chip factory

Terafab got an address: Tesla and SpaceX are building a $16.8 billion campus spanning over 100 million square feet, where logic, memory, and advanced packaging will come together under one roof. But the first chips aren't expected until late 2027. Meanwhile, AMD's acquisition of Toronto-based Taalas opened an alternative path: a model burned directly into transistors instead of a GPU with memory. And Google showed the cost of AI talent with Jeff Dean's departure after 27 years — 5.4% in a single session, or roughly $250 billion in market value. The bet on computing capacity is shifting from volume to who controls the architecture and the people behind it.

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Terafab: Musk builds a $16.8 billion chip fab

Tesla and SpaceX confirmed on Thursday that their joint chip factory, Terafab, will be built in Grimes County, Texas, an hour northwest of Houston. The initial investment is set at $16.8 billion, with at least 3,000 jobs. The campus is to exceed 100 million square feet and combine logic, memory, advanced packaging, and testing in one location.

The plant will draw water from Gibbons Creek Reservoir, which previously cooled a coal-fired power plant decommissioned in 2018, rather than from local groundwater sources. Texas added a $30 million grant from the Texas Enterprise Fund. The motive is simple: both companies say future demand for computing power will exceed what current global capacity can supply.