SpaceX Eyes $55B Texas Chip Plant

Elon Musk's SpaceX has proposed investing $55 billion to build a semiconductor manufacturing facility called "Terafab" in Grimes County, Texas, according to a filing made public on Wednesday. The multi-phase chip fabrication and advanced computing complex could potentially reach $119 billion in total investment if additional phases are completed, aiming to boost domestic semiconductor production capacity in the United States. Local officials are expected to consider a property tax abatement agreement for the project within a newly designated reinvestment zone at a June meeting. Meanwhile, AI data center developer Hut 8 signed a 15-year lease worth $9.8 billion for its Beacon Point data center campus in Nueces County, Texas, as demand for AI infrastructure continues to surge. The agreement covers 352 megawatts of capacity in the first phase with an undisclosed tenant, who will install computing equipment to support large-scale AI training and operations. Shares of the Miami-based company jumped more than 10 percent in premarket trading following the announcement, with the contract potentially worth up to $25.1 billion if renewal options are exercised. Hut 8 CEO Asher Genoot noted the deal involves a "take-or-pay, triple-net basis with no termination for convenience" structure from a high-investment-grade counterparty. Power is expected to be connected to the Beacon Point site in early 2027, with the first building scheduled for completion later that year, and the facility is being designed using Nvidia's latest data center systems. The project is part of a planned 1 gigawatt campus, expanding Hut 8's contracted data center capacity for AI to 597 megawatts with a total contract value of approximately $16.8 billion. Both announcements reflect the accelerating competition among technology companies to secure semiconductor production and data center capacity to meet the computing and energy demands of artificial intelligence models.