SpaceX has applied to the City of Starbase, Texas, for a property tax abatement on a project it describes as a “gas-fired power plant and super-compute facility”, according to the city’s notice of public hearing. The notice puts the “Estimated capital investment for initial phases of the project” at “approximately $24 billion”.
By our arithmetic, $24 billion is about 1.5 times the $16,444 million SpaceX’s SI segment spent on capital expenditures in the third quarter, and about half of the $48,069 million the whole company spent on property, plant and equipment in the first nine months of 2026, according to its 10-Q.
The City Commission will consider “approval of a property tax abatement agreement under Chapter 312 of the Texas Tax Code” and “a related economic development agreement under Chapter 380 of the Texas Local Government Code”. The meeting is on Wednesday, December 9, 2026 at 7:00 p.m., and “Interested persons are invited to attend the meeting and to be heard on the proposed agreements”.
The applicant and property owner is “Space Exploration Technologies Corp., a Texas corporation”. The site is “an approximately 444-acre tract just east of the City of Brownsville, between Boca Chica Blvd and the Port of Brownsville”, inside the Cameron County Enterprise Zone. The notice says the $24 billion “may be constructed over multiple phases and include future expansions”.
The land was until recently inside Brownsville. KRGV reported that “Brownsville commissioners approved removing the property from the city’s boundaries in August”, and that the same meeting approved “a separate agreement that could provide up to $220 million from SpaceX for water and wastewater projects”.
SpaceX’s capital expenditures by segment in the third quarters of 2025 and 2026, from its 10-Q, against the approximately $24 billion the Starbase notice gives for the initial phases. The ratios are our arithmetic.
Business Pill · Capex and Depreciation
An evergreen Business Engineer explainer on capital spending and depreciation in AI hardware. It teaches the general idea only and does not discuss SpaceX or Starbase.
The key insight: As we read the notice, SpaceX wants to put its own gas-fired power next to its own compute: the initial phases alone are put at about $24 billion, about 1.5 times what its SI segment spent on capex in the third quarter, by our arithmetic. The notice prices the project but not the tax break, so what Starbase would give up is not yet known.
The $24 Billion Against SpaceX’s Capex
SpaceX’s 10-Q shows capital expenditures of $19,593 million across its segments in the third quarter, of which $16,444 million was in SI, the compute, Grok, Cursor and X business. That puts SI at about 84% of the quarter’s capex, by our arithmetic. A year earlier SI capex was $4,760 million, so it has grown about 3.5 times.
Against those numbers, the initial phases at Starbase are about 1.2 times SpaceX’s total third-quarter capex and about 1.5 times SI’s, by our arithmetic. Spread over the 444 acres, the $24 billion is about $54 million an acre. The 10-Q puts SI’s nameplate compute at 1.7 GW on September 30, against 0.6 GW a year earlier; we compared that with CoreWeave in SpaceX vs CoreWeave: Both Near 1.7 GW.
Why Power Is in the Plan
SpaceX lists power among the risks to its compute build-out. Its 10-Q names “our ability to expand nameplate compute, complete data center buildouts, obtain sufficient power, GPUs, other critical components and related infrastructure” among the matters its forward-looking statements cover.
Gas already runs part of its AI fleet. The 10-Q discloses an NAACP lawsuit “alleging that the mobile gas turbines powering the COLOSSUS II data center with the permission of the Mississippi Department of Environmental Quality are in violation of the Clean Air Act”; the 10-Q says the SpaceXAI entities opposed the NAACP’s preliminary injunction motion.
This is a different incentive from the state’s JETI program, which halves school taxable value for ten years on Musk’s Terafab chip plant, as we set out in Musk’s $1.66B Texas Tax Break Is 8 Terafab School Deals. The Starbase notice is a city abatement under Chapter 312, with a Chapter 380 agreement alongside it.
The Structural Read
As we read the 10-Q, the SI segment already drives SpaceX’s spending: $16,444 million of the $19,593 million of third-quarter capital expenditures, about 84% by our arithmetic, against $4,760 million a year earlier.
As we read the two Texas records together, the Starbase abatement is a city deal under Chapter 312, separate from the state JETI school-tax limits on Terafab, which our earlier piece put at $1.66 billion of estimated benefit.
City of Starbase, notice of public hearing
“SpaceX proposes to construct, own, and operate a gas-fired power plant and super-compute facility.”
Three Implications
FOR SPACEX The notice puts the initial phases at approximately $24 billion and says they may be constructed over multiple phases and include future expansions.
FOR STARBASE The City Commission will consider the abatement and a Chapter 380 economic development agreement on December 9, 2026 at 7:00 p.m., with the public invited to be heard.
FOR THE POWER QUESTION SpaceX’s 10-Q names its ability to obtain sufficient power among the matters its forward-looking statements cover, and discloses an NAACP lawsuit over the gas turbines powering Colossus II.
The framework says: “The structural bottleneck isn’t computing, it’s electrons.”
As we read it, a company that applies to build its own gas-fired power plant beside its own super-compute facility is working on the electron side of that bottleneck. The framework predates the notice and does not discuss it.
What Is Not Established
The notice gives no abatement percentage, term or dollar value, no generating capacity for the power plant, no size for the compute facility and no construction dates. It does not say who would use the computing power. We did not contact SpaceX or the City of Starbase for this piece.
The comparison with quarterly capex is a scale marker: the $24 billion covers several phases with no dates in the notice, while the 10-Q figures are spending already made.
This Week In The AI Supercycle
The Great Convergence of Capital, Power, and Geopolitics
This week’s issue: for two years the AI build-out was priced as a supply story, and last week as a credit story. This week it was priced as a permission story, and the answer arrived as a cost, not a ban.
SpaceX has asked Starbase for a property tax abatement on a gas-fired power plant and super-compute facility whose initial phases it puts at about $24 billion, with a hearing set for December 9. By our arithmetic that is about 1.5 times the SI segment’s third-quarter capex, on a 444-acre site that Brownsville removed from its city limits in August.
A note on sourcing. We read the City of Starbase’s one-page notice of public hearing for its 9 December 2026 meeting in full, and KRGV’s report on it. The capital expenditure figures, the nameplate compute figure, the power wording and the Colossus II lawsuit description are from SpaceX’s Form 10-Q for the third quarter of 2026. The ratios and the per-acre figure are our arithmetic. We did not contact SpaceX or the City of Starbase for this piece.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
