As two Grimes County school districts prepare to vote on Terafab tax agreements, newly obtained state records reveal what happened behind the scenes during the application process.
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Elon Musk told Gov. Greg Abbott on national radio that the next wave of AI computing could move into space, as Texas nears decisions tied to the proposed Terafab project in Grimes County.
A stable or modestly growing EV business is useful as long as it can fund Musk’s growing AI ambitions.Garrett Nelson, senior vice president of equity research at CFRA, said he’s focused on whether the company can deliver on those ambitious products and timelines. He is also watching Tesla’s plans to increase capital expenditures.“It’s not so much about the deliveries, it’s more about bigger picture like the Terafab announcement, and this spending binge that Tesla is embarking on,” Nelson said.
Iola ISD is considering an agreement that would provide a tax break for the SpaceX Terafab project, a decision that could significantly change the small Texas community.
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Morgan Stanley contends the market underappreciates SpaceX's data center economics, estimating cost per watt at half the industry average, excluding chips and deployment speeds six to eight times faster than peers, thanks to vertical-integration initiatives like Terafab (chip building) and Solarfab (solar equipment).
SpaceX President Gwynne Shotwell has not ruled out such a combination, noting that it “could make Elon’s life a little easier.” The operational ties are already tight: engineers, AI infrastructure and the Terafab chip factory in Texas are shared; SpaceX buys Tesla Megapacks and Cybertrucks; and Tesla invested $2 billion in xAI, now part of SpaceX.
Terafab, a disruptive project or a damp squib? July 03, 2026 at 04:12 am EDT · More analyses · Trader · Trader · This super rating is the result of a weighted average of the rankings based on the following ratings: Valuation (Composite), EPS Revisions (4 months), and Visibility (Composite).
The most provocative piece of the thesis centers on SpaceXAI, the company's data center and AI infrastructure arm. Jonas estimates SpaceX's cost per watt at half the industry average, excluding chips, with deployment speeds six to eight times faster than competitors. That advantage comes from vertical integration through Terafab (chip manufacturing) and Solarfab (solar equipment).
Elon Musk's Terafab may be the most ambitious undertaking Tesla or any of his companies has ever attempted. Capable Optimus… ... On March 21, 2026, at the Seaholm Power Plant in Austin, Elon Musk unveiled "the most epic chip-building exercise in… ... It’s big news as the buzz gets louder surrounding the most publicized IPO in years.
Even without a formal combination, the analyst said operational ties between the companies are already extensive through shared engineering talent, artificial intelligence infrastructure, and the Terafab facility in Texas.
The company only generated $19 billion in revenue last year and reported a net loss of $4.9 billion, making its current valuation based entirely on hopes for the success of future bets, like its plans to put data centers in orbit, to churn out AI processors at its Terafab plant, or position its Starlink satellite internet service to replace traditional mobile carriers.
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In March, Tesla and SpaceX announced Terafab, a $20-25 billion chip fabrication venture planned for the North Campus of Giga Texas, with an initial 2-million-square-foot R&D facility.
Dual-engine synergy of "Starship + In-house Chip Fab": Between 2028 and 2031, SpaceX will launch two game-changing infrastructure projects: first, ultra-high-frequency heavy-lift launches via Starship (V3 variant delivering 100 tons to orbit per launch, with long-term targets of 10,000 annual vehicle production and 10,000 annual launches); second, its Texas-based Terafab chip fabrication plant (adopting 2nm process, with long-term targets of 1TW annual computing power output, ~800GW of
The filing also fits Musk’s wider push to move AI infrastructure into orbit. Earlier this week, Musk said, "Space is the only way to scale at scale," while SpaceX has explored orbital AI data centers and a Terafab chip project in Texas.
These satellites will span up to 70 meters with Avg. power of 120 kW (peak 150 kW), effectively becoming floating power stations in space. 'Starship + in‑house chip fab' as dual engines: From 2028–2031, SpaceX plans two step‑change infrastructure builds: ultra‑high‑frequency heavy‑lift launches via Starship (V3 single‑ship 100 tons to orbit; long‑term goal of 10k units produced and 10k launches per year), and the Terafab chip fab in Texas under SpaceX (2nm process, long‑term output of