SpaceX is set to expand its presence in Central Texas with an $8 million project to enlarge its Bastrop facility, as per state filings. 

The 80,000-square-foot addition, which is scheduled to begin construction on September 24 and wrap in early January 2026, was registered with the Texas Department of Licensing and Regulation and initially reported by My San Antonio. 

New investment

Bastrop is already the site of several Elon Musk-led ventures. The upcoming expansion will extend SpaceX’s office at 858 FM 1209, near Starlink’s operations and The Boring Company’s facilities. Just down the road, X is housed in the Hyperloop Plaza at 865 FM 1209.

SpaceX’s expansion reflects a steady buildup of resources in Bastrop since the private space firm established its presence in the area. The addition was praised by Tesla Governor Greg Abbott, who wrote on X that the expansion will “bring more jobs, innovations and will strengthen Starlink’s impact worldwide.” 

State support

In March, Gov. Greg Abbott announced a $17.3 million state grant to SpaceX for an “expansion of their semiconductor research and development (R&D) and advanced packaging facility in Bastrop.” The project is expected to create more than 400 new jobs and generate over $280 million in capital investment.

Following the grant award, the Texas Governor also noted that SpaceX’s facility would be growing by 1 million square feet across three years to boost its Starlink program. SpaceX’s Starlink division is among the company’s fastest-growing segments, with the satellite internet system connecting over 6 million users and counting worldwide. 

Recent reports have also indicated that Starlink has struck a deal with EchoStar to acquire 50 MHz of exclusive S-band spectrum in the United States and global Mobile Satellite Service (MSS) licenses. This should pave the way for Starlink to provide 5G coverage worldwide, even in remote areas. 

SpaceX has struck a deal with EchoStar to acquire 50 MHz of exclusive S-band spectrum in the United States and global Mobile Satellite Service (MSS) licenses, paving the way for its next-generation Starlink Direct to Cell constellation. 

The agreement strengthens Starlink’s ability to expand its mobile coverage worldwide. With the upgraded system, SpaceX aims to deliver full 5G connectivity to unmodified cell phones and eliminate mobile dead zones worldwide.

Expanding mobile coverage

Starlink’s Direct to Cell service was first launched in early 2024 with satellites designed to connect directly to standard LTE mobile devices. Within days of deployment, engineers demonstrated texting from unmodified phones, followed by video calling. Over the past 18 months, SpaceX has grown the system to more than 600 satellites, which now offer service across five continents. Today, Starlink Direct to Cell is considered the largest 4G coverage provider worldwide, connecting over 6 million users and counting, according to SpaceX in a post.

The constellation integrates with Starlink’s broader fleet of 8,000 satellites via a laser mesh network. Operating at 360 kilometers (224 miles) above Earth, the satellites connect directly to devices without hardware or firmware modifications. The system is already supporting messaging, video calls, navigation, social media apps, and IoT connectivity in remote areas.

Next-generation system

Through its new EchoStar spectrum acquisition, SpaceX plans to develop a second-generation constellation with far greater capacity. The upgraded satellites will leverage SpaceX-designed silicon and advanced phased array antennas to increase throughput by 20x per satellite and increase total system capacity by more than 100x. These enhancements are expected to support full 5G cellular connectivity in remote areas, with performance comparable to terrestrial LTE networks.

Partnerships with major mobile carriers remain central to Starlink’s expansion. Operators including T-Mobile in the United States, Rogers in Canada, KDDI in Japan, and Kyivstar in Ukraine are integrating Direct to Cell services for coverage in rural areas and during emergencies. The service has already provided critical communication during hurricanes, floods, and wildfires, enabling millions of SMS messages and emergency alerts to be delivered when ground networks were unavailable.

Elon Musk is setting high expectations for Tesla’s in-house silicon program. As per Musk in a set of recent posts on X, Tesla’s AI5 and AI6 will be game-changing. 

Tesla’s AI5 and AI6 are incredibly important for Tesla’s future, which will likely be built on the back of very high-volume products like Optimus and the Cybercab.

Musk sets high expectations

Musk confirmed this week that Tesla had just completed a design review for AI5, which will initially be manufactured by TSMC in Taiwan before production ramps in Arizona. As per Musk, consolidating Tesla’s chip design efforts into one architecture has allowed the company to focus its silicon talent on delivering a single high-performance platform. 

“Just had a great design review today with the Tesla AI5 chip design team! This is going to be an epic chip. And AI6 to follow has a shot at being the best (by) AI chip by far. Switching from doing 2 chip architectures to 1 means all our silicon talent is focused on making 1 incredible chip. No-brainer in retrospect,” Musk wrote in his post.

In a follow-up post, the CEO also stated that the company’s upcoming AI5 chip “will probably be the best inference chip of any kind” for models below ~250 billion parameters, with the “lowest cost silicon and best performance per watt.” Musk added that AI6, which follows AI5, “has a shot at being the best AI chip by far.”

AI6 as Dojo’s successor

While AI5 is nearing production, Musk has also pointed to AI6 as Tesla’s next major target. The chip will be manufactured at Samsung’s upcoming Texas facility, part of a multibillion-dollar deal to support Tesla’s next-generation products such as the Cybercab and the Optimus humanoid robot. Musk also noted that AI6 could effectively replace Project Dojo as Tesla’s training platform, given its potential for both inference and training workloads.

Industry veterans have echoed this view, with former Apple and Rivian engineer Phil Beisel suggesting that “AI6 is now Dojo.” Musk appeared to agree, responding with a “bullseye” emoji. Musk has also noted on X that he would personally be walking the line in Samsung’s upcoming AI6 factory in Texas, to make sure that the facility’s output is accelerated according to Tesla’s requirements.