Everything’s bigger in Texas: Musk’s planned $16.8 billion chip factory is five times bigger than the world’s current largest building

Elon Musk is pushing SpaceX and Tesla into a new kind of megaproject: a semiconductor plant so large it would rewrite the scale of industrial real estate. The planned facility, called Terafab, is set for Grimes County, Texas, and the companies say it would span 100 million square feet. That is more than five times the size of the world’s current largest building, the New Century Global Center in Chengdu, China.

Musk has been selling the idea in the grandest terms possible. On X, he said Terafab Texas would be “the largest and most valuable building on Earth by far,” and “stunningly beautiful.” The website for the project describes it as a vertically integrated chip factory, with logic, memory and advanced packaging all under one roof. It is meant to produce more than 1 terawatt of compute annually, feeding both SpaceX and Tesla.

The money behind the first phase is already eye-watering. Texas Gov. Greg Abbott said the initial investment tops $16.8 billion and would create 3,000 jobs. Musk says the factory is about building AI chips at scale for use on Earth and in space, and the site ties it to a much broader ambition: a future with as many as 1 million Tesla Optimus robots, 10 million tons launched into orbit each year, and more than 1 terawatt of solar power.

There’s also the familiar Texas tax bargain in the background. The project has filed eight incentive applications with two local school districts, asking to freeze school maintenance and operations property taxes at roughly 48% of appraised value for 10 years per phase. It also wants the state to cover the gap through the JETI program. The application said the deal matters because, without it, the return would fall below the investment threshold and a place like Arizona could look better.

Abbott is leaning in rather than blinking. Texas already gave SpaceX a $30 million Texas Enterprise Fund grant, and he called Terafab a first-of-its-kind facility that would help speed up chip production. SpaceX is already deeply planted in the state, with its headquarters, Starbase launch site and manufacturing plant there. Terafab looks like the next, much larger move in that same direction.