Elon Musk’s rocket firm SpaceX filed a Grimes County notice revealing the first phase of its Texas chip fab will cost at least $55 billion, with total outlay potentially climbing to $119 billion. The venture, dubbed Terafab, aims to produce AI‑grade processors for SpaceX’s own rockets and Musk’s electric‑vehicle unit Tesla. A public‑utility hearing on tax incentives is slated for later this quarter.

SpaceX’s chip push dovetails with recent AI acquisitions: a $60 billion purchase of code‑writing startup Cursor and the earlier $1.25 trillion valuation of Musk‑owned xAI. Intel announced it will join the Terafab effort to design, fabricate and package ultra‑high‑performance chips, a move that could revive the struggling U.S. foundry. The project arrives as Nvidia’s market cap tops the world in the semiconductor sector today.

Analysts see the $55 billion outlay as a bet on vertical integration, giving Musk control over the compute pipeline that fuels both SpaceX launches and Tesla’s autonomous driving stack. By anchoring production in Texas, the company sidesteps overseas supply constraints and courts local political support through tax breaks. The filing cements the chip plant as the centerpiece of Musk’s impending public offering soon.