Elon Musk responded that energy quality can be addressed with Tesla's Megapack. There is not enough land nearby for Terafab to be fully powered by solar energy, but it will partially use solar energy.

Terafab is a chip factory planned by SpaceX and Tesla in Grimes County, Texas, about an hour's drive northwest of Houston, with an estimated cost of approximately $16.8 billion. It claims to cover over 100 million square feet and aims to produce terawatt-level computing chips for robots, autonomous vehicles, Starlink, and orbital data centers. The site is located next to the decommissioned Gibbons Creek coal-fired power plant and reservoir, using water from the reservoir rather than local groundwater.

The previously disclosed power supply plan primarily involves on-site natural gas units and large-scale battery arrays, with documents not listing Tesla's photovoltaics as a primary energy source. Chip equipment is highly sensitive to voltage stability and harmonics, with millisecond-level disturbances potentially ruining entire batches of wafers; gas turbines produce synchronous AC power directly, while photovoltaics require inversion, necessitating additional management of harmonics and intermittency. Energy storage is described as quality buffering rather than converting photovoltaics into baseload power.

xAI has purchased approximately $2.69 billion worth of Megapacks from Tesla this year. Tesla is also planning a gigawatt-level photovoltaic manufacturing and storage facility in the Houston area, but manufacturing photovoltaics and supplying power to the wafer factory are two separate grids. Musk has directed most of the computing power goals towards space, citing that the total electricity generation in the U.S. is about 0.5 terawatts, which is insufficient to support a trillion-watt computing ambition.

Partial solar energy means the factory will still rely on gas for baseload, with photovoltaics only covering daytime needs. Land constraints have removed the "fully green electric wafer factory" from engineering options, leaving a combination of gas, cabinets, and a small area of panels. Grid connection and permitting will still follow natural gas power plant protocols, not photovoltaic power station protocols.

In market mechanisms, the seller is a unified control system selling chip capacity, natural gas power generation, and storage cabinets simultaneously, while the buyer requires stable voltage for wafer equipment and seeks narratives in the capital market. The event-driven aspect is external inquiries about why they do not use their own photovoltaics. Funding initially flows towards turbines, batteries, and land, with photovoltaic manufacturing investments accounted separately. Beneficiaries include the Megapack production line and on-site power generation construction; pressures arise from portraying Terafab as a purely clean computing base and the land planning around the factory needing to accommodate both gas and batteries.

Source: Public Information