SpaceX says its planned Terafab semiconductor factory in Texas will use company-built natural-gas power plants and large battery arrays, with no announced role for Tesla’s solar technology. The decision matters because the factory is intended to supply chips for SpaceX and xAI data centres, adding to concerns that rapid AI infrastructure expansion is increasing fossil-fuel generation and pollution.

The Grimes County project’s first phase is expected to cost $16.8 billion, although SpaceX previously estimated $55 billion; it has received a full county tax abatement in return for at least $5 billion of spending by 2030 and 1,800 jobs by 2035, plus $30 million in Texas incentives. SpaceX plans to buy $2.8 billion of gas turbines over three years, while industry demand has raised plant costs by 66%; xAI has also faced a lawsuit over allegedly unpermitted turbines in Memphis.