Amid growing opposition to data centers in Texas, SpaceX is planning an estimated $24 billion investment in a massive AI computing facility and natural gas power plant in Starbase, Texas, as Elon Musk moves to secure energy infrastructure to support his ever-expanding AI business.
The project, detailed in a public notice from the City of Starbase, would be developed on approximately 444 acres near Brownsville, Texas. SpaceX would build and operate both the computing facility and its supporting power plant, giving the company direct control over a critical source of electricity.
The Starbase City Commission is scheduled to consider a property tax abatement and economic development agreement on December 9. The $24 billion figure covers the initial development phases, with additional construction and expansion possible. The proposal doesn’t specify the computing facility’s processing capacity or the amount of electricity the gas plant would generate. Nor does it disclose the proposed tax incentives.
The investment supports SpaceX’s strategy to reduce its reliance on outside energy providers while expanding its presence in the AI infrastructure market. The company acquired Musk’s AI developer xAI earlier this year, combining its space technology operations with a business that requires enormous computing resources.
In the third quarter of 2026, SpaceX reported a 161% year-over-year increase in total revenue and a more than ninefold increase in revenue from its AI business. The company has been supplying computing capacity to major tech vendors, including Google and Anthropic.
These developments place SpaceX in a growing group of tech companies seeking greater control over the infrastructure required to train and operate advanced AI models.
A major challenge is electricity. Not only do AI data centers consume vast amounts of electricity, but connecting new facilities to regional electrical grids can take years. Building dedicated natural gas generation could allow SpaceX to begin operations without waiting for a conventional grid connection.
Natural gas also plays an important role in SpaceX’s rocket operations. A SpaceX affiliate, Lone Star Mineral Development, has proposed an eight-mile pipeline called Starpipe to deliver natural gas to Starbase. Scheduled to enter service in January 2027, the pipeline would supply a facility that converts natural gas into liquid methane for Starship rockets.
SpaceX has also proposed a company-owned gas pipeline at Cape Canaveral, Florida, and has recruited natural gas traders to support its operations in Texas and Florida. In addition to Starbase, Musk is pursuing another natural gas power project to support a semiconductor manufacturing facility being developed with Tesla in Grimes County, near Houston.
Taken together, these projects demonstrate Musk’s strategy of bringing energy production, fuel transportation and computing infrastructure under greater company control.
New Governor, New Data Center Challenges
With the ongoing data center backlash, SpaceX’s ambitious investment faces political and regulatory challenges. Texas Governor-elect Gina Hinojosa campaigned on a proposal to halt new data center development across the state, and she has also opposed tax incentives for data centers, putting her policy position in direct conflict with the financial assistance SpaceX is seeking. However, Republican control of the Texas Senate could complicate efforts to enact statewide restrictions on data center development.
Public opposition to data centers has also become a significant concern nationwide. Voters rejected data center proposals in 40 of 41 local ballot measures, indicating concerns about electricity prices, environmental effects and the demands these facilities place on local infrastructure.
