SpaceX's $24 Billion Texas Data Center Sidesteps Moratorium

SpaceX will build a $24 billion gas-fired power plant and super-compute facility near Brownsville, Texas, on land that left the city's jurisdiction just months before Brownsville banned data centers. The city of Starbase disclosed the project in a public notice on Monday. The land sits inside Starbase's city limits, not Brownsville's, so Brownsville's 90-day data center moratorium, which took effect last week, does not apply.

The $24 billion figure covers the initial phases of the project and could include future expansions, according to the Monday notice. Starbase city commissioners are scheduled to hold a public hearing in December to consider tax breaks for the development. SpaceX did not respond to questions about the project.

How SpaceX moved the land out of Brownsville

The mechanism is straightforward. The project occupies 444.45 acres near the Port of Brownsville. Over the summer, SpaceX asked Brownsville to de-annex that tract. In exchange, the company offered $220 million for city water and wastewater projects. SpaceX pressed the city to approve the deal quickly, saying the $220 million would otherwise be off the table.

Brownsville agreed. The move drew widespread condemnation from residents and environmental activists, who argued the city was letting SpaceX take over more land in the area. Soon after the approval, speculation spread online that SpaceX wanted the land for a data center and to sidestep a moratorium then advancing within Brownsville. That speculation, The Texas Tribune's Berenice Garcia reported, appears to have been correct all along. Starbase later annexed the land into its own city limits.

What does the project mean for residents?

Reactions split along familiar lines. The South Texas Environmental Justice Network announced a protest, arguing the facilities would pollute the air, consume water and raise energy bills for residents. Others welcomed the jobs.

"There's a lot of people that need jobs in our community and SpaceX has contributed to those jobs," said Janie Melendez, a Brownsville resident and school teacher who previously served on the Texas Republican Party's executive committee. She said her politics do not influence her view on data centers and SpaceX.

"Since SpaceX moved in, my home has tripled in value," Melendez said. "But I'm one of those [people] that tries to find a balance in everything."

Why the power plant matters

The project's power plant is the key to its timing. In August, Gov. Greg Abbott directed operators of the state's electric grid to pause requests for data center connections until the data centers could be audited. Not all data centers rely on the state's grid, and operators that supply their own electricity can still move forward. SpaceX's planned gas-fired plant could power its data center directly, avoiding a grid connection altogether.

Abbott also ordered the Texas Commission on Environmental Quality to stop issuing data center permits, though critics say some permits have continued to advance through the permitting process.

Texas politics may tighten further. A majority of Texans oppose data center construction, and several communities have issued temporary moratoriums amid concerns about power and water demand at a time of high utility bills and water scarcity fears. Governor-elect Gina Hinojosa said she would issue a ban on all data center approvals until state legislators pass laws "to protect Texans," she said in a video posted on X.

What Brownsville says now

Brownsville stood by the de-annexation decision, which it said was based on "information and circumstances presented at the time," including the property's location, municipal service considerations and potential long-term benefits to the city. The city noted the land was privately owned and its sale to SpaceX was a transaction between private parties. The $220 million will fund water infrastructure the city says is needed to keep supply ahead of future growth.

"The City recognizes the concerns raised about data center development and takes those concerns seriously," the city said in a statement, adding it remains committed to evaluating those concerns, protecting water resources and "ensuring responsible growth that serves Brownsville's long-term interests."

The city said future de-annexation requests will be evaluated independently under state law. Had the 444.45-acre tract remained within Brownsville's limits, the SpaceX project would likely have needed a different site. The December hearing in Starbase, where commissioners will weigh tax breaks, is the project's next public checkpoint.