SpaceX wants a $24 billion AI computing site in Texas that would run on its own gas power plant

SpaceX plans to spend about $24 billion on a giant AI computing site in Starbase, Texas, and to build the gas power plant that runs it. The figure comes from a public notice the city posted on November 6, according to local reporting. SpaceX is asking Starbase, the city that grew up around its rocket base, for a property tax break.

The plan matters beyond one company. It shows how the largest AI builders are trying to skip the years-long wait to plug into the power grid. It also shows a company seeking approval from a local government it largely shaped. For investors, the question is whether owning the power plant is a lasting edge or a fresh set of risks.

What the filings show

The notice says SpaceX "proposes to construct, own, and operate a gas-fired power plant and super-compute facility." The $24 billion covers only the first phases, on about 444 acres east of Brownsville. By simple division, that works out to roughly $54 million an acre.

The size of the power plant comes from a separate air-pollution permit application filed with Texas environmental regulators, the Rio Grande Valley Business Journal reports. It lists 35 natural gas turbines producing about 748 megawatts. Construction Review reports the permit filings describe those 35 turbines as a starting setup, to be replaced later by eight larger GE Vernova units totaling about 708 megawatts. Neither layout is an approved final design.

The application proposes a limit on nitrogen oxide emissions of 248.86 tons a year. Construction Review notes that sits just under a 250-ton federal threshold for classing a plant as a major pollution source, a label that can bring tougher review.

The fuel line is already in motion. Reuters reports that a SpaceX affiliate has filed plans for an eight-mile gas pipeline to Starbase, due in service by January 2027. Those plans described it as feeding a plant that makes rocket fuel. A SpaceX job posting, cited by FourWeekMBA, describes "standing up on-site power generation for the Starbase AI supercomputer."

Why build a power plant

Reuters says owning the plant could let SpaceX avoid a years-long wait to connect to Texas's main grid. That wait is now the main delay for big AI sites. Texas paused new data centers from entering the grid operator's connection process in August, pending an audit, CoinDesk reports. CoinDesk adds that it is unclear whether a self-powered plant escapes that review.

Texas politics are also shifting. Democrat Gina Hinojosa, who campaigned against AI data centers, won the governor's race on November 3. Reuters counts voters rejecting data centers in 40 of 41 local ballot measures.

Local approval should be easier in Starbase than almost anywhere. The RGV Business Journal reports that some city commissioners are SpaceX employees. Starbase annexed the 444-acre tract in September at SpaceX's request, according to local reporting compiled by FourWeekMBA. The commission will consider the tax break and a related development agreement on December 9. Nothing has been approved, and the size and length of the tax break are not public.

Two campuses, two very different roads

Starbase is SpaceX's second giant computing pitch in a week. On November 4, SpaceX presented a plan in Cochise County, Arizona, for a campus of up to 6 gigawatts and up to $50 billion, built in four phases, Baxtel reports. That plan relies on a local power cooperative. SpaceX offered to pay $3.6 billion for new transmission lines and add a large battery system and gas backup.

The Arizona meeting went badly. Hundreds of residents attended, booing interrupted the presentation, and a petition neared 2,100 signatures, according to Baxtel. Baxtel notes the first phase alone would need about six times the co-op's summer peak demand. Arizona's zoning hearing is also set for December 9.

The contrast is the lesson for anyone financing AI sites. In Arizona, SpaceX must win over a county, a utility and angry neighbors. In Starbase, it owns the land, an affiliate is building the gas line and SpaceX would own the power plant. Beyond the state air permit, it mainly needs a tax deal from a friendly commission.

The money explains the hurry. SpaceX, which absorbed Musk's xAI this year and went public in June, rents computing to Google, Anthropic and others. Reuters reports its third-quarter revenue rose 161%, with AI revenue up ninefold. Its Google contract pays $920 million a month through June 2029, Tom's Hardware reported when it was signed. That deal lets Google cancel or pay less if capacity arrives late, so speed has a direct price.

Plenty is still unknown. SpaceX has not said who will use the Starbase site, which chips it will hold, how many jobs it brings or when it will switch on. The notice did not state the computing capacity. SpaceX did not comment in the reports reviewed. The things to watch are the December 9 votes, the Texas air permit, and whether the state's new leadership extends its data center review to sites that make their own power.