NAACP lawsuit challenges SpaceX data centers over public health concerns
More than 20 years after Elon Musk got his start in California, his companies have expanded into the southern United States with major infrastructure investments for Tesla and SpaceX. This year alone, the electric-vehicle maker and rocket company have announced billions of dollars in new projects across Texas and Louisiana, ranging from factories that would manufacture chips and solar panels to data centers built to support artificial-intelligence capabilities. Construction will take years. States have responded by racing to offer tax-incentive packages and, in some cases, passing business-friendly legislation to attract the developments.
States are racing to offer lucrative tax-incentive packages to win new business from Musk’s companies and, in some cases, introducing laws that make it easier for the companies to operate, according to the Journal. In exchange, government officials hope to secure their regions’ economic future through increased tax revenues, new jobs and higher wages for residents.
SpaceX and Tesla plan to spend $16.8 billion in the first phase of a project called Terafab, a joint venture that calls for a campus in Grimes County, Texas, where the companies will develop and manufacture cutting-edge chips. The site would house a 100-million-square-foot factory, making it one of the world’s largest. SpaceX said in a regulatory filing that its investment eventually could total $119 billion.
SpaceX said the project would create thousands of new jobs in Grimes County, including more than 600 operations roles with an average annual salary of $159,181 when it makes its first hires in 2029. The figure stands in contrast to the county’s average annual household income of $63,340 in 2025. Tom Johnson, president and CEO of the Greater Brazos Partnership, the economic-development group in Grimes County, said the salary figure drew an unusual reaction. “We’ve never seen anything like that. We were in awe of that number. That is a good salary,” Johnson said.
Texas has won the largest share of Musk’s infrastructure projects since his California exodus. SpaceX first leased a rocket engine-testing facility in McGregor, Texas, in 2003, taking over an old test site from the defunct Beal Aerospace. The state now houses operations for all of Musk’s major enterprises: SpaceX, Tesla, The Boring Company and Neuralink.
Musk moved Tesla’s headquarters from Fremont, California, to Austin in 2021. Just 20 miles away from the Giga Texas manufacturing facility, other Musk companies have completely overhauled what was primarily a rural, residential area. The tunneling firm The Boring Company moved to Bastrop in 2021. That campus includes Snailbrook, a neighborhood of homes for company employees, as well as the Boring Bodega, a cafe and store open to the public that sells Musk-themed T-shirts, food and drinks. Across the street, SpaceX in 2023 opened a factory for building Starlink satellite internet receivers. A tunnel links the SpaceX and Boring properties, which straddle a public road. SpaceX is also developing Gigasat facilities with buildings for manufacturing AI satellites and solar cells that could eventually cover 11 million square feet.
SpaceX’s development near Brownsville, Texas, has transformed the landscape along the U.S.-Mexico border since breaking ground in 2014. The company has since expanded the experimental test grounds to include a launchpad, assembly bays for the 400-foot-tall Starship, offices, staff housing and a hotel. In 2025, SpaceX incorporated its campus into a new town called Starbase, Texas, complete with a city commission and a mayor who works as an executive at SpaceX. Its footprint is set to expand. On Monday, a federal judge cleared the legal pathway for a land-swap plan allowing SpaceX to convert a federal wildlife refuge into an expansion of the launch site, with the U.S. Fish and Wildlife Service giving SpaceX around 700 acres near Starbase in exchange for a similarly sized plot in another part of the county.
Beyond Texas, SpaceX is working to make another Gulf Coast area its home for rockets. The company said it would spend $100 billion to build dozens of rocket-launch sites dedicated to refueling its Starship vehicles while in space — a critical step that could eventually enable more frequent trips to the moon and potentially Mars. At an event for the project last month, Louisiana Gov. Jeff Landry framed the development as different from those that historically sought to extract wealth from the state. “Today, what Elon Musk and his team is offering Louisiana is different. They are offering us a permanent future and lasting prosperity,” Landry said. Before the announcement, Louisiana passed several state bills into law aimed at the aerospace industry. One extends a tax exemption for aerospace manufacturers, while another protects companies like SpaceX from noise complaints and other nuisance claims.
SpaceX is also expanding its data-center footprint with a new 660,000-square-foot campus and power plant, adding to a sprawling complex that spans two states in the greater Memphis area. Once complete, the company will have three major data-center campuses in the area. Colossus I was built in 2024 by xAI, which is now part of SpaceX. The Colossus II campus, which includes projects called Macrohard, Macrohardrr and Minihard, is still under development.
Those data-center projects have prompted local opposition. Earlier this year, the NAACP sued SpaceX in Mississippi federal court, arguing that the gas turbines powering the data centers pose a serious public health risk to people who live and work nearby. xAI filed a motion to dismiss the case, and the U.S. Justice Department moved to intervene, arguing that any slowdown in xAI’s data-center development would hurt U.S. national security.
The overall scale of Musk’s announced spending reflects what he described to Tesla investors in July as a major capital-expenditure year. “This is a massive capex year, but I’m confident all the things we’re investing in will yield incredible returns,” Musk told investors, referring to capital expenditures.