SpaceX moves to block release of Terafab project records over disclosure fears

Elon Musk’s SpaceX is going to court to block Texas’ Grimes County from releasing public records tied to its proposed Terafab project. The company has argued that disclosure could reveal sensitive information about the project and cause the company “substantial competitive harm.” The records include SpaceX’s tax abatement application, negotiations with the county, technical details, site information and project costs. According to a report by KBXT, SpaceX has filed a lawsuit in the 126th District Court of Travis County, naming Texas Attorney General Ken Paxton and Grimes County as defendants. In its petition, the company argues that releasing the records could reveal its negotiating strategy, project costs and technical approach to competitors and other jurisdictions it may negotiate with in the future. SpaceX is also seeking a temporary restraining order and injunction to prevent the records from being released while the case is pending. Why SpaceX wants the Terafab records kept private The case follows public-records requests made in June by Grimes County Citizens for Responsible Development (GCCRD) and a Grimes County resident. The requests sought SpaceX’s tax abatement application in full, as well as records showing how the Terafab agreement was negotiated, including communications between SpaceX, the county and its consultants. Grimes County already released some Terafab agreement documents in June, but those records differ from the documents at the centre of the current lawsuit. The county initially argued that it could withhold the requested records under several exceptions to the Texas Public Information Act. Those included attorney-client privilege, anticipated litigation and the deliberative process privilege. In a ruling from July, Paxton’s office rejected nearly all of the county’s arguments. The attorney general’s office said the county could withhold certain attorney-client communications but ordered it to release the remaining records. What SpaceX says could cause competitive harm This was also pointed out in the decision made by the Texas attorney general, in which he ruled that the two exceptions mentioned by the county, namely, trade secrets and damage to competition, could not be used by the county since they can only be used by the business. SpaceX has now raised those arguments itself in court. The company is asking a judge to exempt several categories of information from public disclosure. These include its complete tax abatement application, proposed terms and negotiating correspondence with Grimes County. SpaceX also wants technical and project information about Terafab’s design and development, site location and land-acquisition records, project cost and financial information, and personnel information, including direct contact details for employees and representatives. SpaceX contends that the documents contain information that constitutes trade secrets and other competitively sensitive information. SpaceX further contends that disclosure will cause it “substantial competitive harm” by releasing information that can be used by its competitors or other parties involved in future negotiations. SpaceX says some information involves security risks The company is also arguing that some technical information should be protected under Texas homeland security law. That provision covers records that identify vulnerabilities of “critical infrastructure” to a terrorist attack. SpaceX has asked the Travis County court to prevent Grimes County from releasing any disputed records while the lawsuit is considered. Its request includes a temporary restraining order and a longer-term injunction. Paxton is sued in his capacity, and Grimes County is also made a defendant. The individuals who sought the documents are Marie Egyed, a representative of GCCRD, and Vanessa Burzynski. What Terafab is and why the records matter SpaceX describes Terafab in its court filing as a proposed semiconductor and AI-hardware manufacturing plant in Grimes County being developed in collaboration with Tesla. The company says its move into chip manufacturing is intended to support plans to put AI data centres in space. The dispute therefore involves not only the project's proposed tax incentives but also information about how SpaceX plans to develop the facility. GCCRD says its concern is whether residents should be able to see information about a project involving public tax incentives. “Our concern has never been about obtaining someone’s private phone number or sensitive security information,” said Marie Egyed, Director of Operations for Grimes County Citizens for Responsible Development, in a statement recently released. “The question is whether information concerning a massive economic-development project, including the application for public tax incentives and the negotiations surrounding those incentives, should be withheld from the citizens whose county is making these decisions.”