SpaceX has announced that its upcoming semiconductor factory, Terafab, in Grimes County, Texas, will rely on natural gas power plants rather than solar energy. The company plans to spend $16.8 billion on the initial phase of the project, which promises to create 1,800 jobs by 2035.

Elon Musk’s recent investments in natural gas have sparked debate about his priorities amid growing concerns over climate change. Terafab will join a trend of 'bring your own power' data centers that are driving up the cost of natural gas, with Google, Meta and Microsoft also planning large-scale projects.

The choice of natural gas is significant given SpaceX’s previous announcements of solar-powered initiatives. Riley Trettel, who leads energy development for SpaceX, confirmed in a public meeting that the company will be 'bringing our own power' to the project, which includes ‘very large battery arrays’ but no mention of solar.

Despite the environmental implications, Texas is offering $30 million in incentives to support the project. The boom in AI data centers has led to a surge in natural gas plant proposals, as companies seek to address rising electricity costs while speeding up project development.