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Tesla and SpaceX are building a $16.8 billion chip plant: the largest building on Earth, while residents ask about the tax breaks

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Tesla and SpaceX are building a $16.8 billion chip plant: the largest building on Earth, while residents ask about the tax breaks

Elon Musk announced on Thursday where Terafab will be built - the chip plant being developed jointly by Tesla and SpaceX. The site is Grimes County in Texas, northwest of Houston, and the initial investment comes to $16.8 billion (around €15.5 billion). Musk described it as "the largest and most expensive building on Earth, by a wide margin".

The figures are beyond any scale we're used to. The planned 100 million-plus square feet of production space is around 9.3 million square metres - an area measured in square kilometres, not in halls. SpaceX stated in its filings that across the multi-phase construction plan it could spend up to $119 billion. Employees? At least 3,000 people from Grimes and neighbouring Brazos County.

The logic behind the project is straightforward and Musk doesn't hide it. His vision - millions of robots taking over human jobs, robotaxis driving instead of people, satellites turning into data centres for artificial intelligence - demands an amount of computing power that the world's chip production rate simply doesn't have. When you can't buy them, you make them yourself. That's the whole strategy, reduced to one sentence.

"The facility will be an advanced semiconductor plant that will bridge the gap between the current global chip supply and future computing needs," SpaceX said in its statement. The plant is meant to produce chips for Optimus robots and autonomous Cybercabs, as well as more powerful chips for the data centres SpaceX is planning in space. Intel announced it will take part in the project, but stayed vague about what exactly it contributes.

There's one detail worth noting, because it rarely makes it into announcements like this. The day before, hundreds of residents showed up at a county meeting. They didn't come to applaud - they came to ask about the millions of dollars in tax breaks awarded to the project and about the absence of transparency. SpaceX simultaneously announced a commitment to use water from the local Gibbons Creek reservoir instead of groundwater. It's hard not to notice that such a commitment appears exactly when people start asking.

From the local authorities, naturally, the tone was different. "We believe this agreement will strengthen our county, expand opportunities and better prepare our students for the future," said Dr Sara Borowicz, superintendent of the Anderson-Shiro school district, in a statement sent through the Texas governor's office. "There are moments that define a school district and this is one of them."

What remains is the question none of the participants asks out loud: what happens if the vision doesn't materialise. A 100-million-square-foot plant doesn't get converted into something else. If demand for robot chips and orbital data centres turns out smaller than the projections, what's left in Texas is the most expensive empty building on Earth - built with tax breaks the residents are already questioning.