If Elon Musk ever cuts the ribbon on his massive chip factory “Terafab,” it could be among the largest buildings on Earth — and one of the most expensive.
Terafab, announced in a painfully awkward conference over the weekend, is a joint semiconductor venture between Musk’s SpaceX, Tesla, and xAI companies. Should it ever come to be — we’re skeptical — the factory would be much bigger than its already-existing Giga Texas facility, and would surely be the largest chip plant on the planet.
In his early estimates, Musk said the initial costs for Terafab could come out to around $20 to $25 billion, which is not currently reflected in Tesla’s 2026 capital expenditures.
At the low end, the Terafab plant could already be tied for the sixth most expensive building in the world with the Akkuyu Nuclear Plant in Turkey. At the high end, it could also tie for fourth with the International Thermonuclear Experimental Reactor, a research facility in the south of France that could be the world’s largest fusion reactor when it finally opens after being under construction since 2013.
That’s only if costs stay within Musk’s initial estimates — which, as watchers of his business activities know well, is far from a given. According to Investopedia, Morgan Stanley estimates the total cost for a chip factory of that size could easily cost $20 billion more than Musk’s early estimates, somewhere more in the $35 to $45 billion range. That far eclipses the company’s planned 2026 capital expenditures, and at best is $10 billion more than Musk’s highest estimate, signaling a major gulf between the multi-billionaire’s fantasies and financial reality.
Such a financial clash could be underscored by the fact that Musk has no experience leading a chip company, and has a history of flubbing hardware ventures in their early days.
Either way, Musk says there’s no choice but to forge ahead. “We either build the Terafab or we don’t have the chips, and we need the chips, so we build the Terafab,” he said in his announcement. “So… yeah.”
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