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The million-dollar home is becoming surprisingly normal

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A $1 million home no longer guarantees luxury in much of the United States, as years of rising prices have pushed millions of properties into seven-figure territory.

The number of owner-occupied U.S. homes worth at least $1 million climbed from about 1.5 million in 2005 to 6.9 million in 2024, according to an analysis from the National Association of Realtors (NAR). Those homes now make up 8% of the market, up from 2% two decades ago.

The shift is most dramatic in high-cost markets. About 40% of owner-occupied homes in Hawaii are valued at $1 million or more, while roughly one-third of homes in California and Washington, D.C., have reached that level, the report noted.

By contrast, million-dollar homes account for about 1% of properties in Mississippi, North Dakota and West Virginia.

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Billy Rose, founder and vice chairman of real estate brokerage The Agency, told FOX Business that the $1 million mark stopped representing true luxury in Los Angeles years ago.

“In L.A., it seems like there’s so much wealth here and there’s so much elevated housing that the million-dollar threshold now is truly entry,” Rose said.

Some first-time buyers in the region begin their searches at around $2.5 million or $3 million, he added.

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Buyers are also confronting stubborn prices and limited inventory in many markets. Rose said sellers remain anchored to values reached when borrowing costs were lower, while buyers are waiting for better deals.

“That has put kind of a staring contest between buyers and sellers,” he said.

The $1 million threshold also appears to shape buyer behavior.

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Since 2015, about 2.4 times more homes have sold just below $1 million than just above it, according to NAR. Buyers may set searches below the round number, face different mortgage requirements or encounter taxes that begin at $1 million.

New York’s mansion tax is one example. The tax has applied to purchases of $1 million or more since 1989, even though that amount would equal about $2.7 million today after adjusting for inflation, the report noted.

The 1% tax adds $10,000 to the purchase of a $1 million home.

“I think you need to be looking at whether those thresholds need to increase and be more keeping with the times,” Rose said.

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The changing definition of luxury is also not limited to the U.S., according to a recent report from The Agency

INSIDE FLORIDA’S $85M JAMES BOND-INSPIRED MANSION BUILT TO ‘MAKE A BILLIONAIRE’S JAW DROP’

In markets near Toronto, 1 million Canadian dollars, or about $731,000, no longer buys true luxury, Steve Bailey of The Agency noted. Bailey said luxury properties generally begin closer to 1.7 million to 3 million Canadian dollars, or about $1.2 million to $2.2 million.

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The U.S. housing market is moving in two directions, with a recent Zillow report finding that luxury demand is surging while starter-home sales are softening as inventory in that segment grows.

Rose said the trend reflects a broader “K-shaped economy,” in which wealthy buyers have greater financial flexibility while lower-income buyers face more pressure.

“It’s creating a larger divide between, you know, the haves and the have-nots,” he said.

FOX Business’ Eric Revell contributed to this report.

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Met CCTV shoplifting platform quadruples charge rate

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Met CCTV shoplifting platform quadruples charge rate

A reporting platform that lets retailers send CCTV footage and witness statements directly to police has quadrupled the proportion of London shoplifting cases ending in a caution, charge or other criminal disposal, the Metropolitan Police said on 4 August, as the force extended the scheme to eight more boroughs.

Where shoplifting was reported through the platform in the six boroughs piloting it, 29.4 per cent of cases resulted in a criminal disposal, according to figures released by the Met. The force’s average before the technology was introduced was 7.3 per cent.

The platform allows retailers to submit CCTV footage, witness statements and other evidence to officers moments after a crime is committed. At present, the Met said, officers can wait 28 days or longer for that material.

The force ran the six-month pilot with major retailers including Tesco, Boots, Greggs and M&S in Bexley, Greenwich, Hammersmith and Fulham, Kensington and Chelsea, Lewisham, and Westminster.

It has now been extended to subscribing retailers in Bromley, Croydon, Ealing, Hillingdon, Hounslow, Lambeth, Southwark and Sutton, with more boroughs to follow in the coming months, the Met said.

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Cdr Andy Featherstone said the key to solving shoplifting was evidence that showed the identity of the offender, together with a statement from the company and a record of the items stolen.

“Something that may have taken months and months in the past, and sometimes evidence lost along that process, is now able to move in a matter of hours to bring in offenders to justice,” he said.

The Met said reported shoplifting offences across London fell by 3.7 per cent in the last financial year, around 3,500 fewer offences, while arrests for retail crime rose by almost 50 per cent and the number of positive outcomes more than doubled, from 2,682 to 5,996.

The force has previously recorded more shoplifting offences than any other in the UK, logging over 215,000 between 2019 and 2024, according to police data reported when shoplifting offences reached a record high across England and Wales.

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The platform is the Met’s latest use of technology against retail crime. In 2023 the force began using facial recognition to match CCTV stills of prolific shoplifting suspects against custody images, while retailers themselves have introduced measures including body-worn cameras for shop staff.

The British Independent Retail Association welcomed the technology but said smaller shops, which also experience shoplifting, needed help too.

Andrew Goodacre, the association’s chief executive, said the technology was “largely good news”.

“There’s that bit of challenge for independent retailers who don’t have the technology and the resources to maybe deal with this crime in a way that a large Tesco might do,” he said.

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Jamie Young

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

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The role of train stations in driving economic growth

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This role of railway stations is set out in a recent report by Development Economics

Cardiff Train Station.(Image: WalesOnline/Rob Browne)

We usually think of railways and railway stations as places to catch trains. And so they are. They provide us in parts of Wales with an alternative to the motor car particularly for longer journeys; and within the UK where air travel options are few.

Train travel has of course to be accessible, convenient and at an acceptable price to play a more socioeconomic role. It can support inward investment in jobs, our tourism industry (vitally important to Wales) and support housing in relation to work and leisure.

This role of railway stations is set out in a recent report by Development Economics: Growing Places – Railway Stations: Engines of Economic Growth. It illustrates the impact of Great Western main line stations including Carmarthen, a medium size station in terms of passenger numbers handling nearly half-a-million entries and exits annually.

Carmarthen is a historic town with a wide catchment area with a growing rail passenger market (21.5% up on pre-Covid levels).

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Also relevant to the south Wales context and considered in the report are Moreton-in-Marsh and Okehampton railway stations which are not dissimilar to Llandrindod or Llandovery on the Heart of Wales Line (HoWL). Bristol Parkway, parallels proposals for a new station at Felindre on the Swansea District Line (SDL) north of Swansea at M4 junction 46.

The six new stations on the main line between Cardiff and Newport proposed in the Burns Report for south Wales commuter services also fall into the type of stations suggested in the Development Economics report.

This report highlights the expected future developments, in housing or offices, near stations particularly where land is available, as at Felindre. High frequency reliable train services at Bristol Parkway have attracted over 4,000 houses to date and a further 12,000 expected over the next 10 years. Employment generated at the 12 stations analysed in the report has reached 3,600 over the past five years and estimates of 20,000 by 2040.

Moreton-in-Marsh in the Cotswolds has features not dissimilar to those of Carmarthen and Llandrindod with historic origins and mid-nineteenth century railway stations.

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They all have tourism and agriculture as their economic core.

Good train services and modernised comfortable railway stations will make stations on the HoWL and those west of Swansea more attractive to longer distance visitors from Manchester, London and south-east Wales.

The development of 4,000 houses at Newquay is being significantly enhanced by the Mid-Cornwall Metro (based on heavy rail) and an upgraded Newquay station. “Strengthening rail connections will open up new opportunities for residents and businesses, attract investment and re-enforce Cornwall’s position as a well-connected and vibrant place to live and work.

Developments such as the Newquay suburban site will support local business, encourage sustainable travel and create a thriving local economy” is the view of the Duchy of Cornwall who are behind the scheme.

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This column has often identified the contribution of good transport connections to inward investment. If enhanced rail services are seen as essential in providing greener, more reliable travel choices and stronger links to jobs, education and leisure across south west England then surely this also applies to Wales.

While the scale at Felindre and the six stations in south-east Wales may not quite match the 2.25 million passengers at Bristol Parkway, the principles are the same. There are therefore parallels to be drawn with railway station developments in south Wales.

Railway stations can provide faster home/business to business movements in particular to city centres. Bristol Parkway provides a parallel to the proposed (SDL) West Wales/Swansea North Parkway station at Felindre as an access point from Swansea and west Wales into the Cardiff jobs market avoiding the congested M4 to the capital.

Adjacent government-owned land on the old Felindre tinplate works site can provide for housing (and a source of commuters) with local economic benefits though household expenditure and employment.

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Felindre Parkway and the enhanced SDL route as the Swansea Metro (using heavy rail) will provide a more efficient means of reaching tourism centres in Carmarthenshire and Pembrokeshire saving up to 22 minutes in rail journey times.

The arguments made in the Development Economics report show the importance of railways services and stations in economic development and consequently increased jobs and wealth.

These arguments have been put forward in my Wales in Motion column many times particularly in relation to rural, less densely inhabited parts of Wales and the electrification of the north Wales and south Wales main lines.

  • Professor Stuart Cole CBE is Emeritus Professor of Transport (Economics and Policy), University of South Wales.
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(VIDEO) North West, 13, Releases Horror-Themed ‘Aishite’ Video Filmed in Japan After Tour Cancellation

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Kim Kardashian and North West

North West, the 13-year-old daughter of Kim Kardashian and Kanye West, released the music video for her single “Aishite” on Aug. 7, a horror-inspired visual filmed entirely in Japan that arrives days after she abruptly canceled her first headlining concert tour.

The track is part of North’s debut EP, “N0rth4evr,” which she released in May under her stage name North. Directed by Ty Akimoto, the video opens inside an abandoned school building, where North is shown walking through dimly lit corridors with neon blue pigtails, later moving through what appears to be a deserted arcade as blood-effect imagery drips across the screen throughout the visual, evoking the aesthetic of Japanese horror anime.

A Song About Isolation and Betrayal

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“Aishite,” which translates from Japanese as “love me,” samples the 2013 Vocaloid track “Aishite Aishite Aishite” by producer Kikuo, performed using the Hatsune Miku voice synthesizer software. The chorus repeats the phrase “just love me,” with lyrics that explore themes of isolation, feeling pursued, and struggling to trust the people around her. Lines from the song describe not being able to escape those chasing her and feeling unable to let others in, themes North has said throughout her debut project reflect her experience growing up as the child of two globally famous parents.

A Tour Canceled Without Explanation

The video’s release comes just over a week after North announced that her planned 14-date “Kimokawaii Tour,” a co-headlining run with 21-year-old rapper Molly Santana, would not move forward. The tour had been scheduled to kick off Aug. 5 in Dallas and wrap up Aug. 27 in Los Angeles, with stops planned in cities including Houston, Atlanta, Philadelphia, New York, Boston, Toronto, Chicago, Phoenix and San Francisco.

North announced the cancellation on her Instagram Story on July 30, writing, “I was really excited to go on tour w Molly Santana. Sadly it isn’t happening anymore.” She did not offer a specific explanation for the decision but added, “I have something special for u guys see ya soon,” a message widely interpreted by outlets covering the news as a tease for the “Aishite” video that followed. All 14 tour listings were subsequently removed from ticketing platforms Ticketmaster and AXS, and the tour’s official website has since returned a “not found” error.

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Santana also addressed the cancellation on her own Instagram Story the same day, writing, “To everyone who bought tickets to the tour i sincerely apologize. i know a lot of you have taken time out of your busy schedules and spent your hard earned money planning to be there. nothing makes me more happy than the opportunity to share more amazing memories with you all and i hope to see you soon.”

Building a Music Career

North signed with independent label Gamma, run by former Apple Music executive Larry Jackson, earlier this year. Her self-produced debut EP, “N0rth4evr,” released in May, includes tracks such as “H0w Sh0uld ! f33l” alongside the title track, which she also accompanied with a separate music video at the time of the project’s release.

Prior to launching her own solo material, North had already appeared on other artists’ projects. She was featured on FKA twigs’ 2025 album “EUSEXUA,” rapping a verse in Japanese on the track “Childlike Things.” Speaking about that collaboration in a previous interview, FKA twigs said she wanted someone with a “childlike energy” and a strong point of view for the track, and recalled being struck by North’s confidence after watching an interview with her, saying it made her wish she had a friend like North growing up who could speak up for herself.

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A Family Legacy on Stage

North is no stranger to live performance, having appeared on stage multiple times alongside her father, the rapper and producer known as Ye. The two performed a surprise duet together in Mexico City in January and North joined him during a string of comeback concerts in Los Angeles in April. The father-daughter pair also released a collaborative track titled “Piercing On My Hand,” a song that appeared to directly address public criticism North had received over her facial piercings, a recurring feature of her public style that she references again in “Aishite.”

A Rising Profile Amid Public Scrutiny

As the eldest of Kim Kardashian and Kanye West’s four children, alongside younger siblings Saint, 10, Chicago, 8, and Psalm, 7, North has grown up almost entirely in the public eye, drawing both a large following and ongoing scrutiny over her evolving public persona as she has moved from childhood social media appearances into an independent music career. Several members of the extended Kardashian-Jenner family have promoted North’s music on their own social media platforms since the release of “N0rth4evr” in May, contributing to the project’s visibility ahead of the now-canceled tour.

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With the “Aishite” video now released and framed by outlets covering the story as the “something special” North had teased following her tour’s cancellation, attention turns to whether she will announce a rescheduled version of the Kimokawaii Tour or pursue additional new music and visuals in the coming months. Neither North nor representatives for Molly Santana have provided further public explanation for the tour’s cancellation, and no rescheduled dates had been announced as of the video’s release.

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OpenAI Developing $300-$400 Donut-Shaped Smart Speaker With Jony Ive for 2027 Launch, Report Says

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OpenAI

OpenAI is developing its first piece of consumer hardware, a battery-powered, donut-shaped smart speaker priced above $300, according to a Bloomberg report citing people familiar with the matter, marking the ChatGPT maker’s first direct move into a device market long dominated by Amazon and Google.

The device, roughly the size of a hockey puck, is being developed in partnership with LoveFrom, the design studio founded by Jony Ive, the former longtime chief design officer at Apple credited with shaping the look of the iPhone, iPad and Apple Watch. OpenAI acquired Ive’s hardware startup, io Products, for $6.5 billion last year, a deal that marked the company’s formal entry into physical device development and that OpenAI is now working to justify commercially through this first standalone product.

A Premium Price for a Premium Design

According to Bloomberg reporter Mark Gurman, who first detailed the device, OpenAI is planning to price the speaker somewhere between $300 and $400, positioning it well above most of the existing smart speaker market. Amazon’s current lineup of Echo devices ranges from roughly $40 to $240, while Apple’s HomePod starts at $299 and the Bose Lifestyle Ultra retails around $299, meaning OpenAI’s device would sit at or above the very top of the category rather than competing on price with mainstream offerings from Amazon or Google.

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The company is reportedly aiming for what has been described as a “premium look,” built from high-quality metal and other upscale materials consistent with Ive’s design reputation. Sources told Bloomberg the speaker will feature distinct moving parts intended to give the device a sense of personality, along with speaker grilles, microphones, and lights that indicate when it is actively listening to a user.

Designed to Move With You

Unlike traditional smart home hubs such as the Amazon Echo or Google Nest, which typically remain plugged into a wall in a fixed location, OpenAI’s device is designed to be portable enough to carry from room to room, according to the report. The device is intended to sit comfortably on a nightstand or kitchen counter, or be held during a conversation, reflecting an ambition for the product to function less like a stationary appliance and more like a constant companion moving through a user’s daily routine.

A camera system and additional sensors are also planned as part of the hardware, according to people familiar with the project, allowing the underlying AI to incorporate awareness of its physical surroundings into how it responds to users. One report indicated the device could observe users through video and proactively nudge them toward actions the AI believes would be beneficial, such as suggesting someone go to bed if it detects them staying up unusually late before an important commitment the next day.

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An ‘AI-First Computer,’ Not Just a Speaker

OpenAI is reportedly positioning the device as something closer to an “AI-first computer” than a conventional voice assistant, according to Bloomberg, designed to support natural, ongoing conversation similar to the existing Voice Mode feature already available within ChatGPT. The underlying AI models powering the device are intended to learn about individual users over time, according to the report, allowing interactions to become increasingly personalized the longer someone uses it.

That framing echoes earlier public comments from Ive and OpenAI CEO Sam Altman, who first previewed elements of their hardware collaboration in late 2025, describing an early prototype device at the time as intended to feel “peaceful” and function as an “active participant” in a user’s life without being intrusive or annoying.

A Timeline Still Taking Shape

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Reports on the device’s expected launch window have varied somewhat. Bloomberg’s more recent reporting points to a 2027 release, while earlier reporting from February suggested a possible launch as soon as February 2027, alongside a narrower price estimate at the time of $200 to $300, a range that appears to have crept upward in more recent reporting to the $300 to $400 range. Beyond the speaker, OpenAI is also said to be exploring additional hardware products, including a smart lamp and smart glasses, though those projects reportedly remain in considerably earlier stages of development and are not expected to be ready before 2028 at the earliest, with the possibility that either could ultimately be canceled before reaching consumers.

A Legal Cloud Over the Hardware Push

OpenAI’s broader move into consumer hardware has not proceeded without obstacles. The company is currently being sued by Apple, which has accused OpenAI of misappropriating trade secrets in connection with its hardware development efforts. OpenAI has denied any wrongdoing and has continued moving forward with development of the speaker despite the pending litigation, though the lawsuit and any associated injunction requests could potentially affect the device’s eventual launch timeline.

A Difficult Market to Break Into

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Historically, the smart speaker category has proven a challenging business for hardware makers, with companies including Amazon acknowledging in the past that their voice-assistant devices were often sold at a loss or minimal profit in order to drive broader engagement with their platforms and services. OpenAI’s decision to pursue a premium price point well above the bulk of the existing market could make it more difficult to convince budget-conscious consumers to choose the device over cheaper, more established alternatives from Amazon or Google, even if OpenAI’s underlying AI capabilities prove more advanced.

Part of a Broader Long-Term Hardware Strategy

Industry analysts have characterized the speaker as an initial step in a broader hardware strategy that OpenAI is reportedly pursuing, with some reports suggesting the company’s longer-term ambitions include eventually developing devices capable of reducing consumers’ reliance on traditional smartphones altogether. Whether the speaker, as the company’s first tangible hardware product, can build sufficient momentum and consumer trust to support that more ambitious long-term vision remains to be seen.

With a 2027 launch window still roughly a year or more away, additional details about the device’s final pricing, specific features and official release date are expected to emerge as OpenAI and LoveFrom continue refining the product. In the meantime, the pending Apple lawsuit, along with broader questions about consumer appetite for a premium-priced AI speaker in an already crowded smart home market, are likely to remain key storylines as OpenAI works to translate its software dominance in conversational AI into a viable standalone hardware business.

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Scottish subsea robotics firm opens North East base

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Film-Ocean said the move will give it access to talent

Film-Ocean is a Scottish company.

Members of the Film-Ocean team at the newly opened Newcastle office, from left: Abi Thompson, project manager; Sophie Bryce, commercial manager; Mike Mackie, operations director, and Gary Mills, project manager.(Image: Film-Ocean)

Scottish subsea technology firm Film-Ocean has launched a North East office, citing the importance of the region in its market.

The £28m turnover firm says it has plans to expand its Cobalt Business Exchange-based team having moved into the Tyneside location. Film-Ocean is based in Aberdeenshire and is an independent subsea contractor that provides remotely operated vehicle (ROV) inspection and intervention services to the global offshore energy industry.

It operates large fleet of work class, inspection class and micro-class ROVS supplied with crew to locations around the world. Bosses say the North East has emerged as a region of growing importance to the subsea and offshore energy industry, with a strong and expanding talent base in ROV project management and technical support.

They say establishing a presence in the area gives Film-Ocean access to expertise it uses for worldwide operations. The new office will serve as an operational and project delivery base, growing Film-Ocean’s technical support offering and giving it chance to build relationships with clients and partners across the region as it takes on more work.

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It comes as the firm says it has grown rapidly since the start of the year. Latest available accounts for Film-Ocean – covering 2025 – show a significant jump in turnover and profits, with directors talking of continued improvement in market conditions and the renewal of several legacy contracts, along with strong utilisation of the company’s equipment.

Film-Ocean’s commercial manager, Sophie Bryce, said: “Expanding our UK footprint to Newcastle is about being closer to our clients and easier to work with — faster response times, closer day-to-day collaboration, and more capacity to take on new projects. Sustainability was also front of mind when choosing where to base our new office.

“Cobalt’s environmental credentials mean our growth in North East England is happening in a way that’s consistent with how we operate at Ocean House in Aberdeenshire, and with the values our clients increasingly expect from their supply chain partners.”

Film-Ocean says it opted for Cobalt Business Exchange, partly thanks to its sustainability credentials with a surrounding 39-acre biodiversity park with wildflower meadows, wildlife habitats and carbon-reduction and sustainable travel initiatives.

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Climbing ropes recalled over defect that could cause deadly falls

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Climbing ropes recalled over defect that could cause deadly falls

More than 1,000 climbing ropes are being recalled over a fall risk that could potentially lead to injury or death, according to federal regulators.

Wichard Groupe North America issued a recall of about 1,050 Courant Spliced Kalimba Climbing Ropes, the U.S. Consumer Product Safety Commission announced on Thursday.

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“The spliced termination ends on the recalled ropes can fail unexpectedly, posing a risk of serious injury or death from fall hazard,” the commission said in its alert.

MORE THAN 1.7M LADDERS RECALLED NATIONWIDE OVER POTENTIALLY DEADLY FALL HAZARD

Courant Spliced Kalimba Climbing Ropes

Wichard Groupe North America issued a recall of about 1,050 Courant Spliced Kalimba Climbing Ropes. (U.S. Consumer Product Safety Commission)

The recalled climbing ropes include the 45m, 50m and 60m items in lollipop and bubblegum color, as well as any additional spliced Kalimba ropes spliced under Courant splicing protocols before June 15, according to the commission.

The ropes are designed for tree climbing and pruning, and they are commonly used by arborists.

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The company has received three reports of splices failing, but no injuries have been reported thus far in connection with the recalled ropes.

Courant Spliced Kalimba Climbing Ropes recalled over fall hazard

The company has received three reports of splices failing, but no injuries have been reported. (U.S. Consumer Product Safety Commission)

The ropes were sold by Vertical Supply Group, Arbsession, RBI Corporation and nationwide retailers from January 2023 through June of this year for between $250 and $350.

Consumers are instructed to stop using the recalled ropes immediately.

RECALL ISSUED FOR DOG AND HORSE MEDICATION AFTER FIBERGLASS FOUND IN VIALS

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Arborist

The ropes are designed for tree climbing and pruning, and they are commonly used by arborists. (Jim West/UCG/Universal Images Group via Getty Images / Getty Images)

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They can contact Wichard Groupe North America for a free replacement rope, including shipping.

Consumers will be offered one of two free replacement options: one with immediate availability and another with availability beginning in the middle of September.

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Belgian Boys hires new chief commercial officer

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Belgian Boys hires new chief commercial officer

Louisa Lawless brings nearly two decades of commercial leadership experience.

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(VIDEO) SpaceX and Tesla Confirm Texas Site for ‘Terafab’ AI Chip Complex With Intel, xAI as Demand Soars

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SpaceX and Tesla Confirm Texas Site for 'Terafab' AI Chip

SpaceX and Tesla have formally confirmed the site for Terafab, an enormous artificial intelligence chip manufacturing complex being developed in partnership with Intel and xAI, moving the ambitious project from paperwork toward ground-breaking as Elon Musk’s companies contend with a chip supply gap they say existing global manufacturers cannot fill.

According to a report from Benzinga, the confirmation followed a $10 million payment SpaceX sent to Grimes County, Texas, earlier this week, satisfying a deadline built into a tax abatement agreement the two sides signed in June. Foundation preparation is expected to begin almost immediately, with construction renderings expected within days and physical construction to follow within months, according to Teslarati.

Why This Particular Site

SpaceX selected the Gibbons Creek Reservoir, the former home of the Gibbons Creek Steam Electric Station, as the location for the full-scale facility, citing the site’s rainwater storage capacity and its proximity to Houston’s labor pool, with more than 15.9 million people living within a three-hour radius of the property. The company plans to power the complex using its own natural gas plants rather than drawing electricity from Texas’s ERCOT grid, and it has acquired the Navasota River pumping station it intends to use to divert stormwater into the reservoir for cooling and industrial use.

A Venture Bringing Together Four of Musk’s Key Partners

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Terafab brings together three companies tied to Musk, SpaceX, Tesla and xAI, alongside chipmaker Intel, which joined the project in April following a meeting between Musk and Intel CEO Lip-Bu Tan at Intel’s campus. Musk first unveiled the venture in March at a launch event held at the defunct Seaholm Power Plant in Austin, describing it at the time as, in his words, the most epic chip-building exercise in history.

An initial prototype fabrication facility is already underway at Tesla’s Giga Texas campus in Austin, designed to feed into the larger, full-scale Grimes County complex. SpaceX has estimated that the first phase of the Grimes County site could cost approximately $55 billion, with total costs across all planned phases potentially reaching as high as $119 billion.

A Staggering Compute Target

At full scale, Terafab is targeting 1 terawatt of annual AI compute capacity, a figure the project’s backers say would roughly double current total U.S. semiconductor output. The plan calls for reaching 1 million wafer starts per month using Intel’s advanced 14A manufacturing process, a considerably more ambitious target than the current global AI chip output, which analysts have estimated at roughly 20 gigawatts annually, meaning Terafab’s stated goal would represent something on the order of 50 times current worldwide production.

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Intel, in a statement posted to social media platform X when it joined the project, said its ability to design, fabricate and package ultra-high-performance chips at scale would help accelerate Terafab’s aim of producing 1 terawatt per year of compute to power future advances in AI and robotics. Intel CEO Lip-Bu Tan separately characterized the partnership as representing a step change in how silicon logic, memory and packaging will be built in the future.

The Supply Problem Driving the Project

The scale of the undertaking traces back to a supply constraint SpaceX has described explicitly in its own regulatory filings. In its Form S-1 filed ahead of its recent initial public offering, SpaceX warned that its orbital AI ambitions depend on chip access significantly beyond what is currently available, pointing specifically to capacity constraints at established foundries including TSMC and Samsung Foundry. Musk has repeatedly argued that existing global chip fab output covers only a small fraction of what Tesla and SpaceX will eventually require to power vehicles, Optimus humanoid robots and space-based data centers.

According to Musk’s stated division of labor for the project, Tesla is focused on the smaller prototype fab, while SpaceX is taking the lead on the initial phase of the full-scale Grimes County facility. The venture is designed around two primary facilities: one focused on terrestrial AI chip production, manufacturing processors that power Full Self-Driving software and the Optimus robot, and a second, more experimental facility intended to produce chips specifically engineered for use in orbital data centers.

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Not Without Skeptics

Despite the scale of the announced investment, some industry analysts have offered a more measured read on what Terafab actually represents. Writing shortly after Intel’s involvement was confirmed, one technology publication argued that the venture functions less like an independent Tesla-built chip fab and more like an Intel Foundry expansion project for which Tesla, SpaceX and xAI are serving primarily as anchor customers, rather than a fully vertically integrated manufacturing operation built from scratch by Musk’s companies. That analysis noted that leading-edge chip fabrication typically takes established players like TSMC, Samsung and Intel roughly a decade and tens of billions of dollars to stand up, making the idea of an automaker, a rocket company and an AI startup independently building a competitive advanced process node a considerably more difficult proposition than the project’s public framing suggests.

SpaceX’s own regulatory disclosures have echoed a version of that caution. The company’s Form S-1 explicitly warns investors that Terafab “may not be successful” in closing the chip supply gap it was designed to address, an acknowledgment that stands in contrast to the more triumphant framing the project has received in promotional materials and social media commentary surrounding its launch.

Financial Scale Required

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Some industry analysts have separately calculated that achieving the full 1-terawatt annual capacity target would require capital expenditures ranging from $5 trillion to $13 trillion over the project’s full lifespan, given the roughly 22.4 million advanced logic wafers that scale of output would require processing each year. To help generate additional liquidity for its broader ambitions, SpaceX previously acquired xAI in an all-stock merger, creating a combined entity valued at approximately $1.25 trillion at the time of that transaction.

With site confirmation now finalized and construction expected to begin within months, Terafab moves into a phase where its backers’ ambitious timelines will face their first real test. Traditional semiconductor fabs typically take five to seven years to progress from initial groundbreaking to full volume production, meaning even an aggressive construction schedule at Grimes County would likely place meaningful chip output for Tesla, SpaceX and xAI’s most demanding AI and robotics applications several years away, even as the underlying chip supply constraints the project is meant to address continue to intensify across the broader technology industry in the meantime.

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CEO calls Krispy Kreme ‘compelling global growth story’

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CEO calls Krispy Kreme ‘compelling global growth story’

Profitable US expansion, capital-light international growth key to turnaround.

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WK Kellogg: Artificial colors to be out this year

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WK Kellogg: Artificial colors to be out this year

Updated cereal recipes to contain naturally sourced colors. 

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