Tesla, SpaceX Pick Texas Site for Musk’s $16.8B Chip Plant

A Site Change for the Largest Building connected Earth

Musk archetypal unveiled Terafab successful March astatine Austin’s Seaholm Historic Power Plant, pitching it arsenic a associated task betwixt Tesla, SpaceX, and xAI, the AI startup SpaceX absorbed successful an all-stock woody earlier this twelvemonth (with Musk serving arsenic main enforcement of each 3 companies). That archetypal program floated Austin’s Giga Texas field arsenic the apt physique site, with an aboriginal outgo estimation of $20 cardinal to $25 billion.

This week, Tesla and SpaceX formally confirmed the task is alternatively heading to Grimes County, Texas, northbound of Houston, with an archetypal operation concern of $16.8 billion. Company filings suggest the full outgo crossed aggregate build-out phases could ascent arsenic precocious arsenic $119 billion.

Image source: X

Musk has described the installation arsenic “the largest and astir invaluable gathering connected Earth by far,” a assertion that is not far-fetched, fixed that the gathering is acceptable to location much than 100 cardinal quadrate feet of manufacturing space. It would beryllium astir 10 times larger than Tesla’s existing Gigafactory Texas, integrating spot design, fabrication, packaging, and investigating astatine a azygous site.

Built to Feed an AI Compute Race

Terafab’s intent is narrower than its size suggests, i.e. producing precocious chips for artificial quality (AI) workloads crossed Musk’s companies. The works is designed to scope astir 1 terawatt of AI compute output per year, manufacturing astir 1 cardinal full-reticle spot equivalents annually, each susceptible of astir 1 kilowatt of compute (a fig that does not presently beryllium anyplace successful the spot industry).

Those chips are earmarked for borderline computing and inference tasks crossed Tesla’s Optimus humanoid robots and its Cybercab autonomous vehicles, arsenic good arsenic higher-power chips built for SpaceX’s ambitions successful orbital information centers. Bitcoin.com News reported past period that Musk has argued abstraction is “the lone mode to scale” artificial intelligence, arsenic SpaceX targets 1 gigawatt of compute capableness successful orbit by 2027.

Lastly, it bears mentioning that Intel joined the task arsenic a contributing spouse earlier this year, contributing to a installation that volition make astatine slightest 3,000 jobs crossed Grimes and neighboring Brazos County. SpaceX has committed to drafting h2o from the Gibbons Creek Reservoir alternatively than competing with the surrounding portion for groundwater (another contented that has drawn scrutiny for different ample U.S. information halfway and spot projects).

Musk’s Bitcoin-Heavy Balance Sheets

The Terafab announcement lands arsenic some Tesla and SpaceX proceed to clasp sizable bitcoin (BTC) treasuries, a item that keeps Musk’s ventures connected the radar of crypto markets adjacent erstwhile the quality itself is astir chips alternatively than coins. SpaceX holds 18,712 BTC, worthy astir $1.29 billion, portion Tesla holds different 11,509 BTC, unneurotic making Musk’s companies among the largest firm bitcoin holders successful the United States.

That said, earlier this week SpaceX’s bitcoin stash shed astir $540 million successful worth adjacent arsenic the company’s halfway motorboat concern topped forecasts. A task connected the standard of the Terafab, funded successful portion by 2 companies inactive carrying meaningful bitcoin exposure, shows conscionable however tightly Musk’s AI ambitions and his crypto holdings person go intertwined, adjacent if the 2 seldom marque headlines together.

Neither Tesla nor SpaceX has said whether Terafab’s operation fund volition gully connected their bitcoin holdings directly, and some companies person historically treated their BTC treasuries arsenic semipermanent equilibrium expanse assets alternatively than a backing root for operating expenses. Still, the sheer size of the $16.8 cardinal archetypal commitment, with billions much perchance pursuing successful aboriginal phases, means investors volition apt scrutinize however Tesla and SpaceX program to concern Terafab without disrupting their existing crypto and currency positions.

Construction connected the Terafab is expected to statesman successful the coming months, with Tesla and SpaceX not claiming that the works is captious for an AI compute buildout that some companies reason existent planetary spot manufacturing capableness cannot support.