SpaceX's Texas Power Play: A 748-Megawatt Bet on Compute, Weighed Against a Regulatory Paper Trail

SpaceX is lining up a supercomputer campus at its Starbase site in Texas, and the plan comes with a feature that speaks volumes about the state of AI infrastructure: its own gas-fired power plant. The project, which surfaced publicly today, carries a price tag of USD 24 billion for its initial phases and slots neatly into the company's broader push into artificial intelligence.

The generating station is no afterthought. Media reports describe 35 turbines delivering 748 megawatts — enough to keep the compute running independently of a grid that has become harder to access. Texas has ordered a pause on new data centers entering the interconnection queue, and whether SpaceX's self-supply arrangement would sidestep that freeze is not yet clear.

Tax breaks on the agenda, approvals still pending

Local officials are set to take up the matter on December 9, when the city will deliberate on requested property tax abatements and an economic development agreement. Neither the size of the incentives, their duration, nor the financial terms attached have been made public. That session is a hearing, not a green light — approval remains outstanding.

For investors, the near-term question is less about turbines than about paperwork. The site can support the expansion only if SpaceX secures the necessary permits and brings the infrastructure online as planned. Until then, the economics and the regulatory runway are what matter.

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Stifel stays bullish, with a twist

Stifel reaffirmed its buy rating on SpaceX today and kept a USD 190 price target. Analyst Jonathan Siegmann sees the company as a potential acquirer of data center sites that already have power flowing to them — a backdoor into capacity at a moment when delayed approvals make energized facilities more attractive. The financial footing for that ambition, per the firm, is roughly USD 40 billion in committed financing for graphics processors.

That thesis leans on a bottleneck rather than a breakthrough: if permits drag, existing sites with grid access gain value, and SpaceX could buy its way past the queue. It is an additional expansion option, contingent on suitable projects being available and acquirable.

One piece of that funding puzzle is already in motion. On October 26, SpaceX agreed an equipment leasing facility with Apollo covering Nvidia processors and related infrastructure. The deal's closing is subject to conditions, which means the expansion story hinges in part on that financing actually getting done.

Mississippi offers a cautionary tale

How much regulatory execution risk matters is on display in Mississippi. The state environmental agency MDEQ has accused MZX Tech, a subsidiary of the SpaceXAI unit, of building in Southaven without the required permits, according to the Biloxi Sun Herald. In a securities filing dated October 22, SpaceXAI put potential penalties at up to USD 6.1 million. A federal judge also ruled that MDEQ misapplied an exemption for temporary gas turbines. The case is ongoing.

The market's wild week

All of this lands against a backdrop of sharp swings in the stock. On Friday, SpaceX climbed 9.4% as technology and aerospace names recovered, according to media reports. The rally followed a two-day selloff after the US midterm elections — a move attributed to investors reassessing the earlier losses rather than to any single company announcement.

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The prior slump had been driven by Democratic election gains and fears of tighter scrutiny of SpaceX's Texas data center ambitions, alongside worries about a possible review of government contracts and a proposed merger with Tesla. Reports on the rebound pointed to investors who viewed the pullback as an overreaction, plus a fresh look at Elon Musk's growth forecasts amid a strengthening AI sector. Those accounts describe market sentiment, not any confirmed change in SpaceX's business outlook.

Analyst coverage and operational headlines

China Renaissance initiated coverage of SpaceX on Thursday with a buy rating and a USD 194.20 price target, a call reported before Friday's jump. On the operating side, Qualcomm confirmed that SpaceX selected its Dragonwing platforms and software for a planned terrestrial mobile network in the United States, under a multi-year agreement covering tens of thousands of sites, with buildout slated to begin in 2027. SpaceX also disclosed Friday that Don Harrison had stepped down from its board, effective immediately upon his notice to the company on Wednesday.

Weighing it all up, the bull case rests on ambitious buildout plans and the option to buy already-powered sites — provided financing and permits fall into place. The bear case writes itself from the visible regulatory conflicts. At Starbase, the December 9 hearing on tax abatements is the next concrete checkpoint.

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