Key Takeaways
- SpaceX wants a Starbase, Texas, tax break for a gas plant and supercomputer that a city notice puts at $24 billion. The city votes Dec. 9.
- Governor-elect Gina Hinojosa wants to pause new data center permits, ban state subsidies and require union labor.
- Analysts expect SpaceX’s free cash flow to hit negative $142.3 billion in 2027.
SpaceX (SPCX) wants a property tax break from Starbase, Texas, for a gas-fired power plant and supercomputer whose first phases a city notice prices at $24 billion. The city posted the notice three days after Texas elected a governor who wants to rein in data centers.
A Big Ask With Few Details
The Nov. 6 notice shows SpaceX seeking a Chapter 312 tax abatement, plus a Chapter 380 economic development agreement, for about 444 acres east of Brownsville. It doesn’t size the break, the plant or the computing load.
The 956 Report described a pending air filing for a SpaceX facility at Boca Chica: 35 temporary turbines of about 748 megawatts, later eight permanent ones of about 708. Texas law makes the final deal list the improvements and claw back the taxes if they aren’t built.
Austin Is the Bigger Hurdle
A city run by SpaceX employees will likely approve the break. Gina Hinojosa, who won on Nov. 3, wants a statewide pause on new data centers until lawmakers write rules, though she has said it “would only apply to new permit applications.”
Atreides Management’s Gavin Baker wrote on X that Hinojosa “has explicitly said that all currently permitted datacenters in Texas will be allowed to finish construction.” Newly permitted ones, he added, will have to pay taxes, hold consumer power prices flat and protect water supplies.
Governor Greg Abbott already froze new projects in August and September pending reviews by ERCOT and environmental regulators. TD Cowen called Texas “the flash point for data center policy” and expects Hinojosa to keep that review through the first quarter of 2027, possibly followed by a new moratorium. GLJ’s Gordon Johnson said projects with power but no environmental permits could wait 12 to 18 months. Starbase’s pending air permit could put it there.
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Texas Matters Most for SpaceX in 2028
Super Intelligence brought in $7.56 billion of SpaceX’s $14.6 billion in third-quarter revenue. Analysts expect total revenue to climb from $48.9 billion in 2026 to $335 billion in 2028.
Baker thinks permitted projects cover “all of the 2027 and likely well into 2028.” Texas capacity SpaceX still seeks could face tighter rules if Hinojosa’s proposals become law, just as 2028 estimates add $154 billion.
Capex rose from $4.4 billion in 2023 to $20.9 billion in 2025, then $48.1 billion in the first nine months of 2026, with $35 billion to $40 billion guided for the fourth quarter.
Free cash flow fell from about breakeven in 2023 to negative $14.1 billion in 2025. Analysts expect negative $56.4 billion in 2026 and $142.3 billion in 2027.
SpaceX held $89.9 billion of cash and marketable securities at Sept. 30, so it can afford Starbase.
Bringing Its Own Power Is SpaceX’s Smart Move
An on-site plant could spare the site a grid-connection wait, though Abbott’s Sept. 21 order halts state permits even for self-powered data centers. It also matches Trump’s Nov. 8 Truth Social post backing S. 5653, a permitting bill he said “codifies my RATEPAYER PROTECTION PLEDGE, ensuring Data Centers build and pay for their own Electricity.”
The Bottom Line on SpaceX’s Texas Bet
The break may survive, since a site that makes its own power may be exactly what Hinojosa’s rules let through. Still, I expect SpaceX’s cost per gigawatt in Texas to rise. The best case is a city tax break Austin leaves alone; every other case adds lost subsidies, union labor or delay. Dec. 9 should show how big the break is. The rules written after Hinojosa takes office Jan. 19 will show whether bring-your-own-power sites get a pass.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
