SpaceX's Terafab Could Reach $119B as Records Fight Heads to Court

SpaceX's Terafab chip complex in Grimes County, Texas, could grow into a $119 billion, four-phase buildout over the next decade, according to state incentive filings reviewed by ENR, even as SpaceX goes to court to keep cost, land and design records about the project out of public view. Site preparation is already underway on the rural property about 20 miles east of College Station ENR.

What Happened

On September 8, SpaceX sued Texas Attorney General Ken Paxton and Grimes County in the 126th Civil District Court in Travis County to block the release of records tied to Terafab Spectrum News 1. The suit followed public information requests from Grimes County Citizens for Responsible Development and a separate county resident, who sought the company's full tax abatement application and records of how the incentive deal was negotiated KBTX.

The county asked the attorney general for a ruling. On July 28, the attorney general's office allowed the county to withhold certain attorney-client communications but ordered most of the remaining records released, noting that trade secret and competitive harm protections belong to the affected business rather than the county KBTX. SpaceX now asks the court to permanently protect land acquisition records, its tax break application, county negotiation correspondence, project costs, structural design details and employee contact information, arguing that release would cause "substantial competitive harm" Spectrum News 1. The company also argues that some technical information is protected under state homeland security law covering critical infrastructure KBTX.

Bill Aleshire, an attorney for the citizens group, said SpaceX has "no more right to keep secrets from the taxpayers than any other business" Spectrum News 1. As of October 6, the court docket listed both defendants as unserved, and a First Amendment attorney told the outlet such cases are rarely resolved in under a year Spectrum News 1.

The Scale of the Project

Gov. Greg Abbott announced the first phase on August 6 at more than $16.8 billion, with 3,000 jobs and a planned facility of 100 million square feet ENR. Elon Musk has described the complex as combining logic, memory and advanced packaging under one roof to make AI chips ENR.

Eight applications under the state's Jobs, Energy, Technology and Innovation (JETI) program split the buildout across two school districts and four phases ENR:

• Phase 1 (2026 to 2028): about $16.8 billion, with operations from 2028.
• Phase 2 (2029 to 2031): about $38.6 billion.
• Phase 3 (2032 to 2034): about $38.6 billion.
• Phase 4 (2035 to 2036): about $25.3 billion.

That totals about $119.4 billion, though phases two through four depend on later decisions ENR. A separate county notice estimated $55 billion for the initial phases ENR.

The planned scope reads like a full industrial city: fab buildings, cleanrooms, sub-fabs, a central utility plant, substations, water treatment and recycling, industrial wastewater treatment, onsite power generation and a space-compute test facility ENR. Power is expected to come mainly from onsite gas turbines, battery storage and backup generation rather than the grid, and water would be drawn from Gibbons Creek Reservoir rather than groundwater ENR. The reinvestment zone covers more than 22,000 acres, and six county roads are designated for construction traffic that the company must maintain and repair ENR.

Incentives on the Table

Grimes County approved tax abatement and economic development agreements on June 3, including a 100 percent abatement of county taxable value for up to 10 years ENR. In return, SpaceX must pay $10 million up front and $20 million a year from 2027 through 2036, invest at least $5 billion and create at least 1,800 full-time-equivalent jobs ENR. The state added a $30 million Texas Enterprise Fund grant ENR.

The filings say the project's return would fall short without the tax limitation and that Arizona would otherwise be more attractive. Sites in New Mexico and Nevada were also considered ENR.

Who Is Building It

No outside architect, engineer, general contractor or construction manager has been publicly identified ENR. Tesla is hiring an internal construction team in Anderson, Texas, including senior and civil project managers, site superintendents and logistics staff, and job postings describe Tesla personnel overseeing bid packages, contractor selection and field execution ENR. On October 7, Musk wrote that his companies would "build and run the fab," and said Taiwan Semiconductor Manufacturing Co. might sublease part of the site but rejected a larger operating role ENR.

Implications for Owners, Developers, Contractors and Subs

• Owner-led procurement changes the bid path. When the owner runs bid packages directly, trade contractors may be buying work from an in-house team rather than a national CM. Relationships and prequalification with the owner's construction group will matter.
• Utility scope is a project in itself. Onsite generation, substations, water treatment and wastewater recycling mean heavy electrical, mechanical and civil packages well before any cleanroom finishes.
• Disclosure is becoming a project risk. Incentive records requested by residents can end up in court. Owners seeking abatements should expect their applications to be scrutinized, and plan schedules that do not depend on the outcome.
• Phasing is not a promise. Only the first phase is committed. Contractors and suppliers planning capacity around a ten-year program should weigh the later phases as possibilities.
• Fab labor demand keeps climbing. A project of this size competes for the same electricians, pipefitters and controls technicians needed on fab, data center and power work nationwide, including in New York.

What to Watch

• Service of the lawsuit and responses from Grimes County and the attorney general, due three weeks after service.
• Any naming of design, engineering or construction partners.
• Progress of the early earthwork and site preparation captured in October drone footage.
• Whether phase two investment decisions are made on the 2029 schedule.

Bottom Line

Terafab is among the largest private construction programs proposed in the United States, with $16.8 billion committed up front and a possible $119 billion over four phases. The fight over records shows that incentive deals at this scale draw public scrutiny, and the in-house construction model signals that the owner intends to control how the work is bought and built.

Related Coverage

• $500B in U.S. Factories Under Construction as $3.4T Pipeline Waits
• GlobalFoundries to Run Two Japan-Funded Malta Fabs Worth Up to $21 Billion

Image credit: Rendering courtesy SpaceX. Image from the source article. ENR.

Sources

• ENR, SpaceX Records Fight Exposes $119B Terafab Buildout Plans: https://www.enr.com/articles/63809-spacex-records-fight-exposes-119b-terafab-buildout-plans
• Spectrum News 1, SpaceX sues Texas AG Ken Paxton, Grimes County over release of Terafab records: https://spectrumlocalnews.com/tx/austin/news/2026/10/06/spacex-sues-ken-paxton-and-grimes-county-over-release-of-terafab-records
• KBTX, SpaceX sues to block release of Terafab records: https://www.kbtx.com/2026/09/10/spacex-sues-block-release-terafab-records/