Tesla and SpaceX announced on Thursday that they will construct “Terafab,” a state-of-the-art chip manufacturing facility, in Grimes County, Texas, near Houston, with an initial investment of $16.8 billion directed towards the venture.

Elon Musk, the CEO of both firms, stated in a Thursday post that the factory will be “the most extensive and valuable edifice on Earth by a significant margin.” According to SpaceX, over 100 million square feet of manufacturing area is envisioned for this site.

The companies indicate that the facility will provide jobs for at least 3,000 individuals from Grimes and the neighboring Brazos County.

“The facility will serve as a sophisticated semiconductor production site that will reconcile the gap between the existing global chip supply and the future’s computing needs,” reads a statement on SpaceX’s website.

The impetus behind Terafab is Musk’s future vision — a scenario where millions of robots replace human jobs, robotaxis handle all transportation, and satellites act as data hubs for AI development and execution — which demands an extraordinary level of computing power, greatly exceeding what present production capabilities can deliver.

SpaceX has suggested in its filings that it might allocate as much as $119 billion for the endeavor through a “multi-phase” construction initiative — although the company did not mention Terafab during its initial earnings call this week.

Intel has claimed it will participate in the Terafab initiative, though specifics of its involvement have not been disclosed.

“Terafab will be monumental in its objectives and in its massive scale, crafted to generate new computing capabilities at an unparalleled rate and magnitude. A factory that is vertically integrated with over 100 million square feet of manufacturing capacity is proposed. This site will encompass the production, packaging, and testing of advanced logic and memory technologies,” states SpaceX on its website.

“Consolidating these functions in a single location will foster rapid, iterative enhancements and speed up the deployment of new computing resources. Terafab will manufacture chips tailored for edge computing and inference to be used in devices like Tesla’s Optimus robots and self-driving Cybercabs, alongside high-performance chips intended to manage SpaceX’s orbital data centers,” the company articulated.

SpaceX mentioned in its announcement that it is “dedicating itself to utilizing” water sourced from the local Gibbons Creek Reservoir rather than groundwater from the region.

The revelation came after a widely attended county meeting on Wednesday, where hundreds of local residents expressed concerns over the substantial tax incentives granted to the project and issues regarding transparency.

“We believe this agreement will empower our district, broaden opportunities, and more effectively equip our students for their futures,” stated Dr. Sarah Borowicz, Superintendent of Anderson-Shiro Consolidated Independent School District, in a message released by the Texas Governor’s office. “There are pivotal moments in the trajectory of a school district, and this represents one of those pivotal moments. Our current commitment is to ensure that each opportunity created through this agreement is overseen wisely, transparently, and always prioritizing the students in every decision.”