SpaceX, targeting a $1.77 trillion valuation, just got a 100% property tax exemption for a planned factory near Austin, Texas

Commissioners voted four-to-one in approving the deal on June 4, despite complaints from the community that the approval process lacked sufficient transparency and could strain critical infrastructure in the county.

An ambitious goal

Terafab, Elon Musk has said, will eventually create a terawatt of computing power each year. The company is expected to make two kinds of chips — one of which would be used for Tesla vehicles and Optimus robots, while the other was designed to be used in space, as part of Musk’s plans for space-based data centers.

The facility has been met with skepticism, as none of Musk’s companies have semiconductor manufacturing experience. Tesla, at one point, did have a chip design team, but most left the company after Musk killed the Dojo project, which was working on Tesla’s custom-built supercomputer. (And even if they had stayed, chip design is a much different job than chip manufacturing.)

Musk’s own comments about the process have also fueled doubt. In January, he said the semiconductor industry is “getting clean rooms wrong,” betting Tesla would build a 2nm fab where he can “eat a cheeseburger and smoke a cigar.”

Intel joined forces with SpaceX in April to help build out the facility.

Environmental concerns

The Terafab facility will be built at the Gibbons Creek Reservoir site, roughly 90 miles northeast of Austin, Texas. The $55 billion price tag is nearly triple the $20 billion Musk said it would cost when he announced the project in March.