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While it is building you will see a regular update of the number of packages left to build.
Once the command finishes, the chroot will take up total disk space of a little over 3GB.
It compiles quite a bit of software, which it installs into your chroot, and downloads some additional items (around 300MB).
Not only is it a bad idea to build directly from NFS for performance reasons, but builds won't actually work (builds use sudo, and root doesn't have access to your NFS mount, unless your NFS server has the no_root_squash option).
Wherever you place your source, you can still add a symbolic link to it from your home directory (this is suggested), like so:above.
Most developers working on Chromium OS are using Trusty (the LTS version of Ubuntu).
It is possible that things will work if you're running a different Linux distribution, but you will probably find life easier if you're on this one.
NOTE: if you want to run a single command in the chroot (rather than entering the chroot), prefix that command with Calling this will also install a chroot, if you don't have one yet, for example by not following the above.