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Musk Plans Terafab Plant Near Austin

Is Musk's Terafab the most ambitious tech project in history or just another overpromised fantasy?

Published MAR 23

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Above: Elon Musk at the U.S.-Saudi Investment Forum at the John F. Kennedy Center for the Performing Arts in Washington, D.C., on Nov. 19, 2025. Image credit: Brendan Smialowski/AFP/Getty Images

The Facts

Elon Musk announced plans over the weekend to build a chip manufacturing facility called the "Terafab" near Austin, Texas, to be jointly run by Tesla and SpaceX, targeting the production of one terawatt of computing power per year.
Spacex on X
TechCrunch
The Straits Times
Speaking at a launch event, Musk presented the Terafab as a step toward humanity becoming what he described as a "galactic civilization," arguing that it would bring the species closer to a type II on the Kardashev scale, capable of harnessing the energy radiated by its own star.
Spacex on X
Space
Musk underlined the importance of the endeavour by claiming that existing chip suppliers — including Samsung, TSMC and Micron — could not scale fast enough to meet the demands of his companies, stating, "We either build the Terafab or we don't have the chips."
Spacex on X
The Terafab project will eventually aim to produce chips capable of supporting 100 to 200 gigawatts of computing power on Earth and a terawatt in space, falling into two categories — edge inference chips for vehicles and Optimus humanoid robots, and high-power chips designed for space use by SpaceX and xAI.
Spacex on X
Bloomberg
The Wall Street Journal
To reach the terawatt goal, Musk added that SpaceX would need to launch 10 million tons of "orbit" into space, with each unit generating 100 kilowatts of power. Musk said he was "confident" the aim was feasible, with SpaceX filing a proposal to build 1 million such satellites to the Federal Communications Commission in January.
Spacex on X
Scribd
Musk did not provide any costings, timeline or output targets for the project. Analysts at Morgan Stanley, however, have referred to the initiative as a "Herculean task," with anticipated capital expenditures ranging from $35 to $45 billion.
Spacex on X
Business Insider
Sherwood News

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The Spin

Techno-optimist narrative

The Terafab project is the most ambitious chip-building effort in history, combining Tesla, xAI and SpaceX to produce a terawatt of compute power annually — something no existing supplier can match. This initiative will establish a foundation for a multiplanetary civilization and an incredibly exciting future while investing significantly in Texas.

Spacex on X

Greg Abbott on X

Techno-skeptic narrative

Musk's Terefab project doesn't add up. To realize his vision, he would need to launch 135 Starships a day — one every ten minutes — just to put a terawatt of computer power into orbit, yet he has not explained how. These grandiose projections, however, shouldn't be a surprise from the man who promised a million self-driving Tesla taxis by 2020 but only delivered 200.

The Register