SpaceX plans to spend $74B developing a pair of large-scale data center campuses in Arizona and Texas, marking a significant expansion of the Elon Musk-owned company’s digital infrastructure footprint.
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The company announced the plans Thursday, outlining a $50B project at a new site in Cochise County, Arizona, and a $24B development on 444 acres near the firm’s headquarters in Starbase, Texas.
The two campuses are taking different approaches to power. The Texas facility is planned to be powered by a natural gas power plant that SpaceX itself would develop, own and operate, Bloomberg reported.
The Arizona campus, by contrast, would rely at least in part on gird electricity from local cooperatives. SpaceX has said the project will utilize existing renewable resources and cooling systems designed to avoid consuming groundwater — one of the most controversial elements of data center development in the desert Southwest.
While SpaceX has been known as a commercial spaceflight company, Musk has increasingly repositioned the firm as an AI infrastructure provider for its own Grok models and outside hyperscale customers. The centerpiece of that shift was SpaceX’s February acquisition of Musk’s xAI in a $1.25T all-stock deal, merging the AI lab’s computing infrastructure into SpaceX’s launch and satellite business.
SpaceX’s existing computing infrastructure is almost entirely concentrated in the Memphis, Tennessee, area at a pair of campuses called Colossus I and Colossus 2.
The gigawatt-scale cluster has become a focal point for controversy, with environmental and civil rights groups alleging the company operated gas-powered generators to power its data centers without obtaining required Federal permits. Subsequent lawsuits from the NAACP and the Southern Environmental Law Center were opposed by the Trump administration, with the Justice Department asking a judge to dismiss the litigation on national security grounds.
While Musk’s data center projects have courted controversy before, the timing of this week’s announcement is notable.
It comes just over a week after voters across the U.S. delivered a sharp rebuke of data center development in numerous state and local elections in the industry’s most important markets. At the center of this shift was Texas, which has emerged as the country’s fastest-growing data center hub.
Democrats scored upset victories across the state after campaigning in part on tighter oversight of data center development. Democrat Gina Hinojosa defeated Republican incumbent Gov. Greg Abbott after making more restrictive data center policies a centerpiece of her campaign.
The political shift occurred despite Musk reportedly spending roughly $180M supporting Republican candidates in Texas, including a $5M contribution to Abbott’s campaign. In the immediate aftermath of the election, Musk made clear that data center development was among the issues on his mind.
"Data centers in space looking pretty appealing right now," Musk wrote in a post on X.
Arizona also faces the potential for more restrictive regulations on data centers following the midterms.
Democrats claimed control over both chambers of the state legislature and retained the governor's office, with legislative Democrats openly discussing a potential pause on new data center development. Gov. Katie Hobbs, however, has said she is opposed to a blanket data center moratorium.
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