Elon Musk's Terafab chip factory has rural Texans demanding a say in the AI buildout

• Residents of Grimes County, Texas are asking for more local oversight of AI infrastructure projects.
• SpaceX is building a 100-million-square-foot semiconductor factory in the rural area.
• Their demands include commitments for local hiring and pollution controls.

Residents of a rural Texas county say they want more control over the gigantic AI infrastructure projects sprouting in their backyards.

Nearly 900 residents of Grimes County, the site of Elon Musk's planned 100-million-square-foot Terafab semiconductor factory, signed a petition calling for more stringent regulations on large infrastructure projects that receive public incentives.

The residents leading the call presented the petition to the County Commissioner Court on Wednesday.

"When a company asks Grimes County for tax abatements, grants, reinvestment zones, development agreements, or other public benefits, the County has leverage," the petition reads. "Public benefits should require public protections."

The petition's demands include a local oversight process, measurable commitments for local hiring, and pollution controls, among other asks. About 30,000 people live in Grimes, which is about an hour outside Houston.

While the petition doesn't name Terafab directly, it was inspired by recent tax breaks the county granted SpaceX, which is developing the massive factory.

SpaceX agreed to pay the county $20 million every year, or about 78% of what it would have paid in property taxes, SpaceX attorney Bucky Brannen said at the meeting.

Marie Egyed, a member of Grimes County Citizens for Responsible Development, told Business Insider it was unclear if the demands, should they be accepted, would apply to the Terafab factory or only to newly proposed projects.

"We're not sure if it's going to affect everything from the moment that it's signed," she said.

SpaceX's Terafab project is a joint venture with Tesla and Intel. Musk has said that, once online, it could vastly increase the global supply of semiconductor chips, which are crucial for both SpaceX's plans for AI data centers and Tesla's rollout of autonomous robotaxis and humanoid robots.

Jordan Buss, the senior director of environment, health, safety, and medical for SpaceX, said during Wednesday's meeting that the factory is essential for the United States to compete in the AI race.

"This is something that is strategically vital for the United States, and for, I would argue, Western Civilization," he said. "America faces a clear and urgent challenge with the offshoring of manufacturing."

Many Americans across the country are resisting the large AI infrastructure projects popping up in their communities. Grassroots campaigns have taken aim at the AI data centers powering products from companies like Anthropic, OpenAI, Google, and Meta.

Some towns and cities have responded to the growing resistance by ordering moratoriums on new data center construction. Others have banned them altogether.

Texas Gov. Greg Abbott, who has helped turn the state into one of the country's data center hot spots, paused new data center construction on Monday until state power agencies can "conduct a comprehensive verification and audit" of data centers seeking access to the Texas grid.

The residents of Grimes County who attended Wednesday's meeting also voiced concerns about power consumption, pollution, and the impact of a large influx of construction workers and contractors.

"It certainly caused a huge amount of anxiety among the residents in Grimes County," one man said at the meeting.

Riley Trettel, the factory's lead developer, said the factory would generate its own power by building natural gas power plants. "We can say for a fact we will not increase the cost of power for ratepayers," he said.

The Grimes County Commissioner Court said it would appoint a committee to review some of the petition's demands.