Land purchases tied to Musk emerge near proposed Texas Terafab

A company tied to Elon Musk has been buying up properties in the rural Texas area where SpaceX is seeking tax breaks for a massive computer chip-making facility dubbed Terafab.

Wit Tech LLC, which has a Palo Alto, Calif., address associated with xAI, a SpaceX-affiliated company, has entered contracts to acquire parcels encompassing more than 6,000 acres near Gibbons Creek Reservoir in Grimes County. 

James Burnham, general counsel for xAI, is also listed in deed records for the deals. 

RELATED: ‘Immoral’: Why some Texans oppose Elon Musk’s bid for tax breaks for SpaceX Terafab

The activity comes as the Grimes County Commissioners Court is set to consider property tax breaks Wednesday for SpaceX to construct what a notice for the meeting describes as a semiconductor manufacturing and advanced computing fabrication facility. 

In March, Musk announced plans for Tesla and SpaceX build what he said would be the world’s largest chip manufacturing plant. He later noted that several locations were under consideration and that Intel Corp. had joined the project. 

Then, in May, the public hearing notice indicated SpaceX was considering the Grimes County area about 20 miles east of College Station. It noted the plans included an estimated capital investment of $55 billion for the initial phase and a total capital investment of $119 billion if additional phases are constructed. 

But even with large investment dollars being touted and Musk saying the facility could grow to 100 million square feet, SpaceX has cautioned potential investors about whether the project will move forward. In the recent registration statement for its upcoming initial public offering, SpaceX said the development is not a sure thing. 

“Terafab is intended to expand our internal chip manufacturing capabilities and alleviate potential future AI chip shortages at SpaceX, particularly as we pursue orbital AI at scale,” it said. “There can be no assurance that we will be able to achieve our objectives with respect to Terafab within the expected timeframes, or at all,” SpaceX wrote. 

On Tuesday, commissioners had a closed-door meeting to discuss commercial or financial information that SpaceX provided. Residents turned out to question the possibility of Grimes County striking an incentives deal in the area.

“Tax abatements are intended to attract investment that might otherwise go somewhere else. SpaceX has already chosen Grimes County,” resident Michael Hart said. “The richest man on Earth does not need tax incentives to do what he’s already decided to do and I do not believe Elon Musk became the richest man on earth by making bad business decisions. If this facility is truly going to be as successful and profitable as supporters claim, then it should be able to pay its fair share of taxes, just like every homeowner, rancher, farmer and small business person in this county.”

Discussions on the possibility of Grimes County offering tax breaks to SpaceX have become heated in recent weeks. Before resident William Graham spoke, commissioners said, “I ask that you leave your adjectives off this.” 

Graham said he’d try his best and added, “Texas has incentives to do business. We have low regulations, cheap energy. Grimes County has incentives to do business. We have good internet infrastructure, good road infrastructure. You’re giving him free money for no reason. It is dumb.” 

For other locals, the possibility of a tech project moving in contradicts the way of life in Grimes County. 

“Grimes County has flourished over the past 180 years with generations of families building lives that were based on farming and ranching. The imminent loss of agricultural land, along with its rural identity, deserves just as much consideration, if not more, than any commercial, industrial, or large growth development,” said resident Joseph Reznichek. 

“Progress is always needed for communities to grow and thrive,” Reznichek said. “It should, however, not attack the very soul of this county.”