SpaceX announced this week that its planned semiconductor manufacturing plant — projected to exceed 100 million square feet and become the largest building in the world — will be constructed in Grimes, Texas, located outside of Houston.

"Terafab Texas will be the largest and most valuable building on Earth by far," Elon Musk wrote on X on Thursday. "And it will be stunningly beautiful."

The facility is a joint undertaking between SpaceX and Tesla, Musk's electric vehicle company.

"This facility will house the manufacturing, packaging, and testing of advanced logic and memory devices," SpaceX said in a Thursday press release. "Terafab will produce chips optimized for edge computing and inference for use in hardware like Tesla's Optimus robots and self-driving Cybercabs, along with high-power chips designed for operating SpaceX's space-based data centers."

SpaceX noted that the combined chip demand from SpaceX and Tesla is expected to surpass global supply capacity.

"While we are deeply appreciative of our current chip suppliers, and encourage them to expand production whenever possible, this looming gulf between supply and demand is at the core of Terafab's necessity," SpaceX explained.

The announcement places Musk's companies squarely in the middle of a broader U.S. push to expand domestic semiconductor manufacturing, accelerated by the 2022 CHIPS and Science Act. Texas has emerged as a major beneficiary of that trend, with Samsung operating a foundry in Austin and building an estimated $40+ billion fabrication complex in nearby Taylor, and Texas Instruments investing in new wafer fabs in Sherman. Terafab would dwarf those projects in stated scale.

The company stated that Terafab would employ more than 3,000 people, with the initial phase estimated to cost approximately $16.8 billion.

"The Terafab is bringing cutting-edge manufacturing to America, creating thousands of high-paying jobs in the Lone Star State, and enabling us to produce AI chips at scale for use on Earth and in space," Musk said.

According to a May filing, SpaceX initially proposed investing $55 billion into Terafab, an amount that could ultimately increase to $119 billion.

In April, Tesla broke ground on a research facility at the North Campus of its Giga Texas plant, which the company described as a precursor to Terafab.

For context, the Pentagon currently ranks as the largest building in the United States at 6.6 million square feet, while China's New Century Global Center in Chengdu holds the title of the world's largest building at 18.9 million square feet. At more than 100 million square feet, Terafab would be over five times the size of the New Century Global Center.

Reuters contributed to this report.