SpaceX secured a 35-year property tax exemption from Grimes County, Texas, for its planned Terafab semiconductor facility. County commissioners approved the deal in a 4-1 vote. SpaceX will pay the county $10 million upfront and $20 million annually in lieu of taxes.
The project involves an initial capital investment of $55 billion. This figure could potentially grow to $119 billion over time.
The facility is a joint project between SpaceX, Tesla, and xAI. The site will produce advanced AI chips to reduce reliance on third-party suppliers.
Local residents fiercely opposed the agreement, citing potential strain on water and power resources. Critics also raised concerns regarding environmental impacts and the ethics of granting tax breaks to a high-value private company.