Nvidia Breaks Ground on $2B Coherent Factory in Texas

What happened at the Nvidia-Coherent groundbreaking in Sherman, Texas?

Nvidia CEO Jensen Huang attended a groundbreaking ceremony on June 16, 2026, in Sherman, Texas — about an hour north of Dallas. The event marked the formal start of a major expansion of Coherent's manufacturing facility. Nvidia announced the upgrade as part of its $2 billion partnership with Coherent, the factory's owner.

"AI factories are the infrastructure of the new industrial revolution," Huang said in a statement.

What does the Coherent factory actually make?

Indium Phosphide is a material used to make a laser that carries data between computer chips using light. The factory expansion will increase production of this material. Each second, the laser pulses light a few hundred billion times through a fiberglass strand the width of a human hair. That lets Nvidia's chips share information and work together as one system — what Huang calls "AI factories."

The technology allows chips to operate with more power, speed, and efficiency. Power consumption would be cut by up to 50%, making AI computations faster and cheaper. Reducing the cost of tokens — the industry's term for AI usage — would help AI expand further.

How many jobs will the factory create?

Coherent estimates the factory will create 1,000 jobs total, including construction workers. About 550 of those roles will be in advanced manufacturing, engineering, and technical positions. Coherent CEO Jim Anderson said the plant's floorspace will double and its output will quadruple with the new additions.

Here's a breakdown of the key project figures:

How did the factory get government funding?

The Coherent facility received support from both administrations. The Biden administration approved $33 million from the CHIPS and Science Act. The Trump administration then added a $17 million grant to help ensure this piece of AI infrastructure would be built in the United States.

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"The reason the award was expanded was because we continue to grow capacity," Anderson said. "We saw the opportunity with the tremendous AI demand to grow capacity even more than we had originally planned."

What is Nvidia's broader strategy beyond chips?

One Nvidia executive, speaking on background, said the company is moving from making computer chips to providing entire AI systems. That shift means clustering more production in the U.S. — with chipmaking increasingly centered in Arizona and assembly increasingly located in Texas — to build a reliable domestic supply chain.

Nvidia is now worth roughly $5 trillion, making it the world's most valuable company. AI modeling companies OpenAI and Anthropic could each cross a $1 trillion valuation once their stocks are publicly traded, according to AP reporting via the Houston Chronicle.

What did economists say about the AI investment boom?

Economists Jessica Wachter and Jonathan Wachter published a paper this month noting that the five largest U.S. technology firms invested $380 billion last year as part of the AI buildout. That sum could roughly double this year. Based on that investment, they estimate AI could grow from about 3% of U.S. GDP to somewhere between 8% and 39%.

As we read the sourced reporting, the range of that GDP estimate — 3% to as high as 39% — signals just how wide the uncertainty remains, even among economists closely tracking the numbers.

What did Huang say about AI and jobs?

Huang argued that AI will create jobs rather than replace workers. He pointed to the AI infrastructure buildout as evidence. He also said AI has helped close the technological divide by letting people do advanced computer work without knowing how to program.

"We need to create new social norms," Huang told the AP. "I would advocate that everybody use AI. Just go engage it."

He compared AI's social disruption to the arrival of automobiles. Cars were once blamed for harming children, he said, but society adapted by building sidewalks and crosswalks.

What is Trump's role in Nvidia's rise?

President Trump has insisted on Huang joining him on foreign trips. Most recently, Air Force One picked up Huang in Alaska while en route to China for a state visit. Trump has called Huang "smart," a "friend," and "amazing." He also publicly said he once considered breaking up Nvidia due to its market dominance, but decided Huang was someone he needed as an ally.

Trump signed an order to have new AI models voluntarily vetted by the government. His administration also placed export controls on Anthropic's latest models, leading Anthropic to shut down public access to those models over security concerns.

What did Huang say about government ownership of AI companies?

Trump, Senator Bernie Sanders, and OpenAI CEO Sam Altman have each floated the idea of the U.S. government owning a stake in AI companies. Huang was skeptical.

"I'm not exactly sure what they're trying to achieve," he said. "I haven't had a dialogue with them about that."

Nvidia's market cap sits at roughly $5 trillion. The AI investment surge has raised concerns about wealth concentration, which is what prompted the government-ownership discussion.

The next concrete milestone from the sources: the Coherent factory expansion is underway in Sherman, Texas, with construction now formally begun as of June 16, 2026.