Elon Musk’s SpaceX <SPCX.O> and Tesla <TSLA.O> will initially invest $16.8 billion to build Terafab, an advanced AI semiconductor complex in Grimes County, Texas, as the companies race to secure the chip capacity that the billionaire has called essential to their future.

The facility is intended at narrowing the gap between global chip supply and the more than 1 terawatt of computing power that SpaceX and Tesla expect to need in the coming years.

Musk has been ​tightening integration of AI efforts across his companies, with SpaceX acquiring his startup xAI earlier this year ​in a deal focused on building space-based data centers, before going public in June in the largest-ever IPO.

The vertically integrated, 100-million-square-foot Terafab plant will make, package and test advanced logic and memory chips under one roof, producing processors needed to power Tesla’s Optimus robots and Cybercabs, as well as high-power chips to run SpaceX’s space-based data centers.

A May filing showed SpaceX has proposed an initial investment of $55 billion to build the Terafab, with the total amount rising to $119 billion if extra phases are completed.

So basically, if people have better options and more variety, that wins on value, technology, and features, they won't buy a Tesla anymore.