SpaceX Invests $2.8 Billion in Gas Turbines for Its AI Data Centers

Elon Musk’s SpaceX has committed to investing over $2.8 billion in recent months for the purchase of gas turbines aimed at powering data centers for its artificial intelligence division, as disclosed in a regulatory filing on Wednesday.

This substantial investment indicates that Musk remains focused on gas turbines, despite public complaints, a lawsuit, and regulatory investigations surrounding potential air pollution and environmental compliance issues linked to SpaceX’s operations.

A significant electricity shortage is currently the primary obstacle in the booming data center industry across the US. Portable gas turbines—generators capable of operating independently from the grid—are being seen as quick, interim solutions until more sustainable energy sources become available.

Besides launching rockets and providing satellite internet, SpaceX also oversees Musk’s xAI division, responsible for developing Grok. To support the chatbot and other AI initiatives, xAI manages two data centers named Colossus 1 in Memphis, Tennessee, and Colossus 2 in Southaven, Mississippi. SpaceX has leased some server access from the Colossus data centers for $15 billion annually to Anthropic, an AI startup that is working on the Claude chatbot. Musk stated on Wednesday that SpaceX intends to finalize more agreements.

These fresh insights into SpaceX’s energy expenditures are part of a broader set of disclosures included in the company’s prospectus for its upcoming initial public offering, a detailed document aimed at informing potential investors about the company’s financial situation and long-term threats. SpaceX is targeting a debut on the Nasdaq stock exchange in the near future.

In March, SpaceX finalized an agreement to acquire $805 million worth of turbines from an undisclosed company through 2029, as per the IPO filing. Shortly thereafter, in late April, Musk’s company reached a $2 billion agreement for mobile gas turbines and related equipment from an unnamed supplier, a deal that remains pending.

Recently, WIRED reported that 19 new portable turbines had been installed at Colossus 2 within the last two months, bringing the total to 46 units. These portable turbines can function without a clean air permit for an entire year, a regulation that SpaceX has exploited to its advantage. Some of these units were added following a lawsuit by the NAACP and other advocacy groups against xAI, claiming that the company had been operating 27 gas turbines without the necessary permits, which posed a threat to public health and the environment.

As of March, SpaceX had enough server capacity across the two data centers to consume about 1 gigawatt of power, comparable to the electricity usage of a significant US city. However, the company anticipates continued growth, which will further increase its energy demands. According to Wednesday’s filing, SpaceX has over $14 billion in construction projects underway, including the value of data center equipment that is not yet operational.