SpaceX seeks Texas tax break for $24 billion supercomputer project

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SpaceX Texas supercomputer tax break

Highlights

SpaceX proposes a $24 billion gas-fired power plant and supercomputing facility at Starbase, seeking a property tax abatement from Cameron County, Texas.
The project would generate 748 megawatts with 35 turbines, reflecting technology firms' shift toward dedicated power as AI infrastructure demand accelerates.
The Starbase initiative faces increased political risk after Democrat Gina Hinojosa, an opponent of energy-intensive AI data centers, won the Texas governor race on Nov. 3.

Starbase project and tax incentive plan

As reported by CoinDesk, citing the City of Starbase notice, SpaceX proposes to build, own and operate a gas-fired power plant and a super-compute facility at its Starbase site in Cameron County, Texas. The project is valued at $24 billion, and the city commission is scheduled to hold a public hearing on Dec. 9 over a requested property tax abatement that would reduce the company’s tax burden and allow use of the Cameron County Enterprise Zone for the development.

The proposed power plant would reportedly use 35 turbines and generate 748 megawatts, setting the project apart from many AI data centers that rely on local electricity grids. The notice does not explain why SpaceX wants dedicated generation capacity for the facility.

SpaceX, which went public in June, also holds bitcoin on its balance sheet. Its 18,712 bitcoin are worth about $1.39 billion, according to Bitcointreasuries.net, making the planned Starbase investment roughly 17 times larger than the value of those holdings.

AI infrastructure demand and political risk

SpaceX’s move adds to a broader push by technology companies to secure electricity supply directly as AI infrastructure demand grows. Anthropic recently agreed to buy 1.7 gigawatts of gas-fired generators for $3.4 billion, underscoring how data center operators are increasingly turning to dedicated power assets rather than waiting for utilities to expand grid access.

Global Commodity Trader Index said on X that tech groups are going directly to power sources and scarce equipment, creating a new long-term demand driver for gas producers, turbine makers and pipeline operators. SpaceX’s AI expansion is recent, following Elon Musk’s February stock-swap merger of xAI into SpaceX, which valued the combined company at about $1.25 trillion.

The Starbase plan also faces a potentially tougher political backdrop in Texas. Democrat Gina Hinojosa won the state’s governor race on Nov. 3 after campaigning against AI data centers and criticizing the spread of energy-intensive facilities under the previous administration.

In our earlier coverage of the U.S. AI data center boom, we examined how rising financing costs, construction delays, and grid limitations are making it harder for developers to deliver on ambitious buildout plans. We also noted growing local opposition and a push from regulators for new projects to secure dedicated power sources—adding another hurdle to scaling computing capacity quickly.

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