SpaceX’s $17B Texas expansion is actually just the opening act for a much bigger play

Texas Governor Greg Abbott has approved tax incentive agreements for SpaceX’s massive new semiconductor manufacturing facility in Grimes County, a project with a stated capital expenditure north of $16.8 billion. But here’s the thing: that number might be the modest version of the story. The facility, dubbed Terafab, is a joint effort between SpaceX and Tesla aimed at producing chips for computing, artificial intelligence, and adjacent technologies. While the headline figure sits around $17 billion, the initial phase of investment could reach $55 billion, with total project expenditures potentially scaling to $119 billion. What’s actually being built in Grimes County The Terafab facility is planned for land near the former Gibbons Creek coal plant. The facility could eventually span up to 100 million square feet. To put that in perspective, the Pentagon, America’s largest office building, covers roughly 6.5 million square feet. Terafab would dwarf it by a factor of fifteen. The tax incentive agreements were approved under Texas’s JETI program, which stands for Jobs Energy Technology Innovation. Grimes County approved a 35-year tax abatement and reinvestment zone back in June 2026 w...