Musk's Tesla and SpaceX plan Terafab chip plant, reported to be the world's largest building

Tesla and SpaceX have jointly announced plans to build a semiconductor factory in Texas called Terafab, a project multiple reports describe as potentially the largest building in the world once completed. The plant is planned for a site just north of Houston. According to reports, the facility is located in Grimes, Texas, and is designed to cover 100 million square feet — roughly 9.29 million square metres. It is reported to be intended to produce artificial intelligence chips for Optimus robots, Cybercabs and space-based data centres, tying the factory directly into Elon Musk's ambitions across his companies. The announcement signals Musk's most aggressive push yet into chip manufacturing, at a moment when demand for AI hardware is straining global supply. Addressing investors, Musk said people were "underestimating" his company — a one-word rebuttal to sceptics that now hangs over a project of unprecedented reported scale.

Tesla and SpaceX unveil Terafab, a chip plant billed as the world's largest building

Tesla and SpaceX have jointly announced plans to build a semiconductor factory in Texas, a project the two companies are calling Terafab. The venture marks an unusual formal collaboration between Elon Musk's electric carmaker and his rocket company, pooling their ambitions in chip manufacturing at a single site.

Multiple reports describe Terafab as potentially the largest building in the world once completed, a claim that has driven much of the attention around the announcement. The project is planned for a site just north of Houston, Texas.

The announcement positions Musk's companies more directly in the semiconductor business, an industry where supply has become a strategic concern for makers of vehicles, autonomous systems and computing hardware. Details of the factory's reported scale and its intended output are covered separately, as is Musk's own defence of the project to investors. For now, the joint statement from Tesla and SpaceX confirms the plan itself: one factory, in Texas, under the Terafab name.

A site north of Houston — and a footprint reported at 100 million square feet

The Terafab plant is planned for a site just north of Houston, Texas, according to the joint announcement from Tesla and SpaceX. Some reports place the facility more precisely in Grimes, Texas, though that location has not been confirmed and should be treated as reported rather than established.

The scale of the project, as described in multiple reports, is striking. The planned factory is said to cover 100 million square feet, a figure that would make it the largest building in the world once completed. Other reporting puts the footprint at 9.29 million square metres. Both figures come from media coverage of the announcement rather than verified planning documents, and neither Tesla nor SpaceX has publicly confirmed the dimensions.

For context, the reported footprint would dwarf existing record-holding structures. Whether the final build matches those numbers remains to be seen; the companies have so far outlined the project only in broad terms, leaving the precise site and size subject to change as plans develop.

What Terafab is reported to build: chips for robots, Cybercabs and orbital data centers

The Terafab plant is intended to manufacture artificial intelligence chips, according to multiple reports, though the companies have not publicly detailed the facility's output. Reports suggest the chips would supply three of Musk's most ambitious product lines: the Optimus humanoid robots under development at Tesla, the company's planned Cybercab autonomous vehicles, and data centers designed to operate in space.

None of these production plans has been formally confirmed, and the descriptions circulating in press coverage should be treated as reported intentions rather than settled fact. The space-based data center element in particular has drawn attention, given that it would tie the factory's output directly to SpaceX's orbital operations as well as Tesla's ground-based products. If the reports prove accurate, Terafab would sit at the centre of Musk's broader push into AI hardware, feeding chips into vehicles, robots and satellites alike.

Musk tells investors they are 'underestimating' his company

Elon Musk has told investors that people were "underestimating" his company, a remark that lands differently in the context of the Terafab announcement. The single word, attributed directly to Musk, came as Tesla and SpaceX set out plans for a semiconductor factory in Texas that multiple reports describe as potentially the largest building in the world once completed.

The comment fits a familiar pattern for Musk, who has long argued that sceptics fail to grasp the scope of his ambitions. Whether Terafab justifies that confidence remains an open question. The project is at an early stage, and the claims attached to it — including its reported scale — rest on the companies' own plans and on press accounts rather than finished construction.

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