The facility is intended at narrowing the gap between global chip supply and the more than 1 terawatt of computing power that SpaceX and Tesla expect to need in the coming years.

Future expansion ​phases could push total investment much higher, SpaceX said in a statement on ​its website on Thursday, adding that the facility would employ at ⁠least 3,000 people.

"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.

Musk has been tightening integration of AI efforts across his companies, with SpaceX acquiring his startup xAI earlier this year in a deal focused on ​building space-based data centers, before going public in June in the largest-ever IPO.

The vertically ​integrated, 100-million-square-foot Terafab plant will make, package and test advanced logic and memory chips under one roof, ‌producing ⁠processors needed to power Tesla's Optimus robots and Cybercabs, as well as high-power chips to run SpaceX's space-based data centers.

A May filing showed SpaceX has proposed an initial investment of $55 billion to build the Terafab, with the total amount rising to $119 billion if extra ​phases are completed.

To aid ​the efforts, SpaceX ⁠earlier this year partnered with Intel, which has been trying to expand its chip contract manufacturing business as part of a turnaround effort.

Tesla broke ​ground in April on a research facility at the North ​Campus of ⁠its Giga Texas plant, a precursor to Terafab.

The Grimes County site sits near the Gibbons Creek Reservoir, whose water the companies plan to use for industrial operations rather than local groundwater.

It ⁠adds ​to SpaceX and Tesla's growing Texas footprint, alongside sites ​at Starbase, Bastrop and McGregor.

"Texas is where big ideas grow even bigger," the state's governor, Greg Abbott, said ​in a statement.