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- Construction of Elon Musk's Texas chip factory is projected to cost up to $119 billion.
- The Terafab project aims to supply AI chips for Musk's companies.
- Morgan Stanley analysts had previously estimated the Terafab would cost $45 billion.
SpaceX just shared the estimated construction cost of Elon Musk's ambitious chip factory in Texas — and it's higher than analysts' predictions.
The Terafab project could initially cost $55 billion and rise to $119 billion if additional phases are constructed, according to a public notice posted on the Grimes County website.
Musk announced the joint project between his companies, SpaceX, xAI, and Tesla, in March. His goal is for the Terafab to produce critical AI chips for Tesla's robotaxis and Optimus robot.
"SpaceX proposes construction of a multi-phase, next-generation, vertically integrated semiconductor manufacturing and advanced computing fabrication facility, which would represent a transformative investment in domestic semiconductor manufacturing capacity," the Grimes County document states.
The proposed location for the Terafab site is the Gibbons Creek Reservoir in rural Texas, the notice said. The reservoir is about 100 miles from Tesla's HQ in Austin and close to College Station, home of Texas A&M University.
County Commissioners will meet on June 3 to consider approval of a property tax abatement for the project, it added.
The price tag is notably higher than analysts' estimates, which had already raised questions about how SpaceX and Tesla would pay for the moonshot project.
Morgan Stanley analysts estimated in March that a factory capable of producing chips at the scale Musk had previously suggested could cost up to $45 billion.
Analysts have also said that the Terafab project would face challenges outside the capital cost, such as securing specialist technical talent.
Since Musk unveiled Terafab in March, the project has announced US chip giant Intel as a partner and listed job ads for the moonshot, including one role with a base salary of up to $240,000.
It comes as SpaceX is preparing for what's expected to be the largest IPO in history, with its public filings expected to reveal more details about Terafab.
Read the original article on Business Insider
