Musks xAI Takes Over Seaholm Office Sublease in Austin

Elon Musk’s growing Austin kingdom is starting to take physical shape downtown.

xAI, the artificial intelligence firm tied to Musk’s social media platform X, subleased roughly 112,000 square feet at the Seaholm Power Plant — virtually all of the building’s office space — according to multiple first-quarter market reports from brokerages tracking the Austin office sector. The Austin Business Journal reported that the space was previously occupied by Athenahealth, which has leased space at the building since 2014.

The deal, first surfaced in recent reports from firms including Cushman & Wakefield and CBRE, appears to confirm speculation that Musk’s companies are moving into the historic redevelopment along Lady Bird Lake, following last month’s splashy Terafab announcement at the site.

CoStar data shows xAI as the subtenant as of March, while CBRE’s report suggests an even broader cohort of coinhabitants, listing a joint venture involving xAI, Tesla, SpaceX and Intel as the occupants, according to the publication. Intel recently signed on to the $20 billion-plus Terafab chipmaking initiative, which Musk has described as a cornerstone for scaling artificial intelligence production.

Neither xAI nor Seaholm landlord Endeavor Real Estate Group responded to requests for comment from the outlet, and details about the tenancy remain sparse. But signs of activity are already visible, as construction crews were observed completing interior work this week, with building access restricted and signage limiting photography.

The move marks one of the first tangible real estate deals tied to Terafab, which Musk claims could eventually produce up to one terawatt of computation annually — enough to support tens of millions of AI chips powering everything from autonomous vehicles to robotics and aerospace systems.

The sublease is notable in Austin’s office market beyond the tenant’s profile, as blocks of space have been slow to absorb as companies have reduced office occupancy since 2020. A full-floor-plus commitment by a fast-scaling tech powerhouse stands out, according to the publication.

Questions remain about the permanence of the move, as Musk has said Terafab’s long-term home will require thousands of acres and significant power capacity, with sites under consideration across the region.

— Eric Weilbacher