SpaceX Plans Natural Gas Power Plants For Texas Chip Factory

(RTTNews) - Space Exploration Technologies Corp. (SPCX) plans to build natural gas power plants to supply electricity to its planned Terafab semiconductor factory in Texas, according to Bloomberg.

Riley Trettel, who leads energy and data centre development at SpaceX, said the company would be "bringing our own power" to the project, along with large battery arrays.

Terafab will be built in Grimes County, about 45 miles northwest of Houston, and is intended to produce chips for data centres operated by SpaceX and its xAI subsidiary.

The initial phase is expected to cost $16.8 billion. SpaceX has received a 100 percent tax abatement from the county in exchange for investing at least $5 billion by 2030 and creating 1,800 full-time jobs by 2035, while Texas is providing $30 million in incentives.

The plan comes as Elon Musk increasingly turns to natural gas to power AI infrastructure. xAI's Memphis data centres rely heavily on gas, while SpaceX has said it plans to purchase $2.8 billion worth of gas turbines over three years.

The move reflects a broader trend among AI companies using dedicated power plants to meet rapidly growing electricity demand.

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