Aerospace major SpaceX and electric vehicle maker Tesla are investing USD 16.8 billion to build ‘Terafab’, an advanced AI semiconductor complex in Texas, designed to narrow a looming gap in global chip supply, according to official statements. The mega facility aims to meet an anticipated requirement of over one terawatt of computing power for Musk’s ventures. The plant will make, package, and test advanced logic and memory chips under a single roof to power Tesla’s Optimus humanoid robots and Cybercabs, as well as high-performance processors for SpaceX’s planned orbital data centres. The expansion comes as Musk tightens the integration of artificial intelligence efforts across his enterprises following SpaceX’s acquisition of AI startup xAI earlier this year. Welcoming the project, Texas Governor Greg Abbott announced a USD 30 million Texas Enterprise Fund performance grant to support the investment, stating in an official press release that the facility will “accelerate chip production in Texas at an unprecedented scale and expand economic opportunity across the region.”