State governments are fiercely competing for billions of dollars in planned capital expenditure, with projects spanning chip fabrication plants, rocket launch sites, and data centers. Colossus I and II (supercomputing clusters), the Starbase facility in Texas, the Vegas Loop, and the Terafab chip factory (a joint venture between Tesla and SpaceX); involved companies include The Boring Company, Neuralink, SpaceX, and Tesla.
Elon Musk's Tesla and SpaceX are rolling out a series of large-scale infrastructure projects across the southern United States, continuously expanding their business footprint. More than two decades after leaving California to start his ventures, the serial entrepreneur is spreading the infrastructure of his business empire across the southern half of the country. This year alone, his electric vehicle company Tesla and rocket company SpaceX announced multi-billion-dollar new projects in Texas and Louisiana. These new facilities will rapidly manufacture chips and solar panels; the accompanying data centers will provide computing power for both companies' artificial intelligence operations, with all construction expected to take several years.
Speaking about capital expenditure in July, Musk stated: "The scale of capital expenditure this year is enormous, but I firmly believe that all the projects we are investing in will deliver extremely generous returns in the future."
U.S. states are eagerly offering lucrative tax incentives to attract Musk's companies, with some even passing legislation specifically to lower operational barriers for these businesses. In exchange, local governments hope the projects will boost tax revenue, create jobs, raise residents' wages, and secure the region's future economic development.
Since Musk relocated the headquarters of X and SpaceX out of California, Texas has taken on the vast majority of his infrastructure projects. SpaceX first leased a rocket engine testing site in McGregor, Texas, back in 2003, taking over the old test grounds of the defunct Beal Aerospace. Today, all of Musk's major companies — SpaceX, Tesla, The Boring Company, and Neuralink — have operations in Texas.
Grimes County, Texas — Companies Present: SpaceX, Tesla
SpaceX and Tesla have jointly launched Phase One of the Terafab project, building a campus for research, development, and production of cutting-edge chips. The planned building area spans 100 million square feet, which upon completion will rank among the largest factories in the world. SpaceX has disclosed that the project's eventual total investment could reach $119 billion. According to filings submitted by the aerospace and satellite company, the project will create a substantial number of jobs for Grimes County; during the first round of hiring in 2029, operational positions alone will exceed 600, with an average annual salary of $159,181. By comparison, the county's average annual household income in 2025 is just $63,340.
Tom Johnson, President and CEO of the Greater Brazos Partnership, the economic development organization for Grimes County, said: "We've never seen a project like this. We were all stunned when we saw that salary figure — it truly represents a very high income level."
Bastrop County, Texas — Companies Present: SpaceX, Tesla, The Boring Company
In 2021, Tesla relocated its headquarters from Fremont, California, to Austin, Texas, just 20 miles from Gigafactory Texas. Several of Musk's other companies have completely transformed this area, which was once predominantly rural residential land. The tunneling company The Boring Company set up operations in Bastrop in 2021, with its campus including Snailbrook, a dedicated town for employees; it also opened a public-facing "Boring Bodega" cafe selling Musk-branded T-shirts and light meals. Across the street, SpaceX built a new factory in 2023 for manufacturing Starlink satellite internet receiver equipment. A tunnel crosses over a public road, connecting the SpaceX and Boring Company campuses. SpaceX is constructing the Gigasat facility for manufacturing AI satellites and solar panels, with total building area eventually expected to reach 11 million square feet.
Vermilion Parish, Louisiana — Company Present: SpaceX
With one Starbase already operating in Texas, SpaceX plans to turn this area along the Gulf of Mexico into a new rocket headquarters. The company announced it will invest $100 billion to build a facility specifically for refueling massive Starship spacecraft in orbit, enabling more frequent lunar and eventually Mars missions. At a project event last month, Louisiana Governor Jeff Landry said the SpaceX project is different from past outside investments that merely extract local resources. "Elon Musk and his team are bringing something different to Louisiana — they are bringing us a lasting future and sustained prosperity." Before the project was officially announced, Louisiana had already passed multiple pieces of legislation supporting the aerospace industry: one bill extending tax exemptions for aerospace manufacturers; another helping companies like SpaceX avoid civil claims related to noise disturbances.
Cameron County, Texas (around Brownsville) — Company Present: SpaceX
SpaceX's development near the U.S.-Mexico border has completely reshaped the local landscape. The company broke ground in 2014 and has since continuously expanded its rocket testing site, building launch pads, multiple 400-foot-tall Starship assembly buildings, office buildings, employee housing, and an accompanying hotel. In 2025, SpaceX formally incorporated the area as the City of Starbase, Texas, establishing a municipal commission with a SpaceX executive serving as mayor. The project footprint will continue to expand. On Monday, a federal judge cleared the legal obstacles to a land swap plan, allowing SpaceX to modify a federal wildlife refuge to expand its launch site. Under the swap plan, the U.S. Fish and Wildlife Service will transfer approximately 700 acres of land near Starbase to SpaceX, in exchange for an equal-sized parcel elsewhere in the county.
Memphis, Tennessee & Southaven, Mississippi — Company Present: SpaceX
SpaceX is building a new 660,000-square-foot campus and accompanying power plant, with the project spanning the Memphis metropolitan area across both Tennessee and Mississippi. Once fully completed, SpaceX will have three major data center campuses in the region. The Colossus I data center was built in 2024 by xAI, which has now merged into SpaceX; the Colossus II campus includes the Macrohard, Macrohardrr, and Minihard computing facilities and is still under construction. The project has faced opposition from local residents. Earlier this year, the NAACP sued SpaceX in federal court in Mississippi, alleging that the data center's gas turbine units pose a significant threat to the public health of surrounding residents. xAI filed a motion to dismiss the lawsuit, and the U.S. Department of Justice submitted filings to intervene in the case, arguing that blocking the construction of xAI's data center would harm U.S. national security.
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