Elon Musk’s Neuralink brain implant company is planning to build a three-story building with office and manufacturing space in Austin, Texas, an area that's drawing more tech companies and large-scale economic development.

Neuralink’s new building, expected to cost at least $14.7 million to build, at 2200 Caldwell Lane in Del Valle, Texas, is located about 10 miles east of Tesla's headquarters and manufacturing plant that opened in 2022.

The company plans a 112,000-square-foot building with offices and a machine shop in Del Valle, according to a state work permit. Construction is expected to start this month and be completed in May 2025.

“The move signifies another big bet on Austin by a big company, further legitimizing Central Texas’ claim to becoming a top destination for tech-oriented companies,” Ryan Bohls, regional managing director based in Austin for commercial real estate brokerage Franklin Street, told CoStar News. Franklin Street is not involved with Neuralink's plans.

Large tech companies have been putting operations in the Texas capital city for decades, with more recent moves by Apple, Google and Facebook, attracted by graduates of the local branch of the state university. The region has also been helped by lawmaker efforts to keep state taxes low and be welcoming to businesses. Samsung Electronics is building a multibillion-dollar semiconductor plant in the Austin suburb of Taylor, Texas, further solidifying the area as as innovation hub.

Musk co-founded Fremont, California-based Neuralink to make implantable brain chips, a form of artificial intelligence, as a means to have humans control their computers or mobile devices through their own thoughts. The company has been expanding and hiring in the Austin area. Neuralink did not immediately respond to a request for comment.

Musk has relocated or expanded operations in the Austin area for several of his companies since he relocated Tesla's headquarters to Austin in 2021 from Palo Alto, California, and personally moved to Texas from California in 2020.

Musk is also the founder of the Boring Co., a builder of tunnels and underground public transportation that moved its headquarters to Central Texas in 2021. Musk's space exploration company, SpaceX, is based in the Los Angeles suburb of Hawthorne but has manufacturing operations and test sites in South Texas and outside Waco, Texas, between Austin and Dallas.

Texas-based commercial real estate attorney Shams Merchant said Neuralink’s plans could be good for Austin’s economy overall but the city still has vacant office space. Neuralink's new office in Del Valle is located in a rural area about 30 miles southeast of downtown Austin.

“My opinion is that Musk’s projects including SpaceX, Boring and now Neuralink are beneficial to the local economy for Austin but doesn’t solve downtown Austin’s problem of high vacancy which will continue to face challenges amidst fluctuating leasing activity and a growing supply of office space. There is also still downward pressure on rents,” Merchant, a partner at M&W Law, told CoStar News. Merchant is not involved with Neuralink's plans.

Companies like Meta Platforms Inc., the parent of social media site Facebook, is trying to sublease some of its downtown office space. About 87% of new office space in downtown Austin will be vacant as soon as it hits the market, Merchant said, citing Cushman & Wakefield data.

“It seems like developers are waiting for the next wave of tech companies and other growing industries to come fill the space,” Merchant said. “That being said, on the flip side, with the current market, financing for new, Class AA office buildings has dried up, so developers that got cheap financing in 2022 are ahead of the game, since there won’t be any new development competition for a while.

“With Elon Musk continuing to bet on Austin, it seems like the money is still flowing to Austin, so only time will tell what happens to the office market,” Merchant continued.

Neuralink expanding its presence in the Austin area solidifies the region as a destination for artificial intelligence, according to Shravan Parsi, CEO and founder of Austin-based American Ventures, a commercial real estate investment company.

“Austin’s tech ecosystem thrives on innovation and collaboration, attracting leading companies and talent from around the world. With Central Texas transforming into a major semiconductor hub, highlighted by Samsung’s $46 billion plant, the region is propelling the AI boom to the next level, solidifying its status as a dynamic hub for technological advancement and growth,” Parsi told CoStar News. “This robust ecosystem not only exists but remains highly relevant in the current" era of artificial intelligence development.

Studio8 Architects is the design firm for Neuralink's new building, according to the state permit.