SpaceX Commits $2.8 Billion to Gas Turbines for AI Data Centers

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Elon Musk's SpaceX has committed to spending over $2.8 billion on gas turbines to power its artificial intelligence data centers, according to a regulatory filing on Wednesday. This significant investment underscores Musk's continued reliance on gas turbines, despite public complaints, a lawsuit, and regulatory scrutiny over potential air pollution and environmental violations. The use of gas turbines has become a crucial strategy for SpaceX as it expands its data center operations to support its AI unit, xAI, which develops the Grok chatbot.

Alongside its rocket launches and satellite internet services, SpaceX owns xAI, which operates two data centers, Colossus 1 in Memphis, Tennessee, and Colossus 2 in Southaven, Mississippi. The company leases server access to AI startup Anthropic for $15 billion annually. The data center boom in the US is facing a critical constraint: a shortage of electricity.

Portable gas turbines have emerged as a quick solution until more robust energy sources come online. SpaceX's recent deals include an $805 million agreement in March to buy turbines through 2029 and a $2 billion deal in late April for mobile gas turbines and related items. As SpaceX prepares for its initial public offering, the company's prospectus reveals a surge in construction, with over $14 billion in projects underway, including data center equipment.

The company's power needs are expected to grow significantly, with its current servers requiring about 1 gigawatt of power, equivalent to the electricity used by a large US city. The use of gas turbines has sparked controversy, with the NAACP and other advocacy groups suing xAI over allegations that it operated 27 turbines without proper permits, posing health and climate risks. In response, SpaceX has added new turbines, including 19 units at Colossus 2 over the past two months, bringing the total to 46.

According to regulatory rules, portable turbines can operate without a clean air permit for a year, a provision that SpaceX has utilized. Musk indicated that SpaceX plans to sign additional deals, as the company aims to list on the Nasdaq stock exchange in the coming weeks.