Elon Musk's aerospace company, SpaceX, plans to build a roughly $24 billion data center complex in Texas and is requesting local property tax reductions to support the investment. Details of the proposed development, its permit applications and related infrastructure plans have emerged through city notices and regulatory filings.
Timing and local decision process
Starbase's city government—the community hosting SpaceX's headquarters—published a notice Friday about the company's request for a tax reduction and an accompanying economic development agreement. A three-member city commission will discuss the proposal on December 9; two of the three commissioners are also SpaceX senior executives.
Project components
According to the filing, SpaceX would construct an on-site gas-fired power plant and a "supercomputer" center intended to serve artificial intelligence workloads. The buildout would occur in multiple phases. In September the company sought environmental permits from Texas regulators to operate 35 mobile gas turbines, which would produce roughly 750 megawatts (MW) of electricity in total.
Satellite imagery shows site clearing and preparatory earthworks have already begun, a step observers say can make it harder to halt or reverse construction once it is underway.
Grid connection and self-supply
Plans call for the new data center to produce much of its own electricity for years before connecting to the main Texas grid, the Electric Reliability Council of Texas (ERCOT). To supply fuel for on-site generation, SpaceX intends to build a nearly 13-kilometer natural gas pipeline to Starbase; that pipeline is planned to be commissioned in January.
ERCOT now evaluates data center grid-connection requests in groups rather than individually. Projects in the first group—whose application deadline was in July—will receive their allocated quotas in spring. That allocation covers all of the grid's spare capacity through 2032, meaning later applicants may face multi-year waits for new generation and transmission to be built.
Political context and timing
The timing of SpaceX's permit and tax requests suggests the company is trying to secure approvals before a political turnover in January. Democrat Gina Hinojosa will take office as governor then, and she has previously criticized the state's rush of data center construction. Additionally, control of the Texas House of Representatives will shift to Democrats, raising the prospect of stricter rules on large data center projects.
Corey Trinetti, founder of the market research firm Measured AI, told analysts that the project is likely to be fully approved before Hinojosa assumes office.
Scale and company targets
Last month Elon Musk informed SpaceX investors that the company aims to deploy at least 10 gigawatts (GW) of AI-serving compute capacity by 2027. The proposed Texas facility would be a component of that ambition, but its timeline and full scale depend on permitting and grid-access outcomes.
Why this matters
SpaceX's plan for a massive data center with its own power plant and long gas pipeline touches on energy planning, local tax policy and environmental permitting. The project's size and the deliberate political timing mean its approval could affect not only the local economy but also the broader Texas energy system and the pace at which hyperscale data centers are added in the state.
Tags: investment, Elon Musk, artificial intelligence, SpaceX, tax relief, supercomputer, Texas, gas pipeline, power plant, data center
This article was prepared with the assistance of an AI tool; a journalist edited and verified the final content.
