SpaceX's near-term AI payoff seen tethered to Earth, not outer space

By Akash Sriram

July 10 (Reuters) - Elon Musk whitethorn person pitched a aboriginal wherever abstraction powers AI, but Wall Street analysts accidental SpaceX's near-term worth remains firmly tethered to Earth, wherever it is gathering retired the infrastructure underpinning the AI boom.

Infrastructure providers, peculiarly ‌data centers, are poised to beryllium among the biggest beneficiaries of the AI roar arsenic businesses and consumers rapidly follow the ‌technology for applications ranging from bundle coding and robotics to mundane tasks specified arsenic buying and planning.

SpaceX, a large AI player, has already started monetizing compute by striking deals with endeavor ​customers, including Anthropic, for its Colossus supercomputer clusters. In contrast, its orbital AI program remains a longer-term accidental that depends connected the instauration of Starship rockets, little motorboat costs and technological advances.

Company filings analyzed by Reuters and commentary from probe houses amusement that gross from its latest compute contracts is acceptable to acold transcend income from different segments this year.

"The communicative that (orbital) volition fundamentally disrupt terrestrial information centers is simply a small spot overblown. Any benignant of displacement of terrestrial ‌data centers is 10 years positive out," said Anthony ⁠Milovantsev, a spouse astatine consultancy steadfast Altman Solon.

J.P. Morgan expects SpaceX to grow terrestrial AI compute capableness to astir 9 gigawatts by 2029 - astir equivalent to 4 times the powerfulness generated by the Hoover Dam.

"Beyond 2029, we expect ⁠SpaceX to pivot to orbital compute for incremental capableness additions, portion continuing to run and support its terrestrial compute clusters," the brokerage said.

TERRESTRIAL COMPUTE BEGINS TO PAY OFF

SpaceX's deals with Anthropic, Alphabet's Google and Reflection AI for its Colossus compute facilities are expected to make much than $28 cardinal successful yearly revenue.

That fig acold exceeds SpaceX's ​2025 ​AI gross of astir $3.2 cardinal and surpasses gross from its motorboat and Starlink connectivity ​businesses individually, according to Reuters calculations.

Analysts cautioned that the contracts ‌contain termination provisions and should not beryllium viewed arsenic guaranteed semipermanent recurring revenue.

SpaceX invested astir $18 cardinal successful AI infrastructure and improvement successful 2025, including astir $12.7 cardinal successful AI-related superior expenditure and $5.1 cardinal successful AI probe and development, dwarfing spending connected its abstraction and connectivity businesses, according to institution filings analyzed by Reuters.