Musk's Terafab skips Tesla solar for gas turbines
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- SpaceX confirmed its $16.8 billion Terafab chip megafactory in Grimes County, Texas will be powered by newly built natural gas power plants and "very large battery arrays," with no Tesla solar included — despite Tesla co-owning the project and selling solar, Powerwalls, and grid-scale batteries.
- Terafab, built on the site of a former coal-fired power plant, is targeted to produce over a terawatt of compute per year for SpaceX and xAI data centers plus future Tesla Optimus and Cybercab chips, with the first-phase budget revised down from a $25 billion figure floated in March to $16.8 billion.
- Musk personally acquired gas-turbine company APR Energy for roughly $1 billion in July, picking up more than a gigawatt of turbine capacity, while SpaceX has separately committed more than $2.8 billion to gas turbines for its data centers.
- xAI's Colossus data center near Memphis has run on gas turbines since 2024, many of them unpermitted; the NAACP, Southern Environmental Law Center, and Earthjustice are suing over 27 unpermitted turbines in Southaven, Mississippi, alleging they emit more than 1,700 tons of nitrogen oxides and 19 tons of formaldehyde annually next to homes, schools, and churches.
- Trump's DOJ intervened to keep the unpermitted Southaven turbines running on national-security grounds when regulators moved against them, per the lawsuit.
- Tesla sells Megapack and solar-plus-storage as an AI-power answer — xAI itself bought $269 million of Tesla Megapacks earlier this year, and in June Tesla and Sunrun launched a 16 GW virtual power plant pitched at data centers — yet none of that hardware is in the Terafab power plan.
Why it matters: The financial logic is laid bare in the article: Musk owns roughly 20% of Tesla but 100% of APR Energy, the gas-turbine firm he acquired for about $1 billion in July. Communities in Southaven, Mississippi already allege 1,700-plus tons of annual NOx emissions from xAI turbines next to schools and churches, and Terafab's on-site gas plants will extend that footprint at a former coal-plant site in Grimes County.
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