Musk says AI to be 99% of SpaceX value, $500B revenue

SpaceX's AI revenue will exceed all other business lines by September, Elon Musk told employees this week, projecting the company's compute buildout to 10 gigawatts could generate $300 billion to $500 billion in annual revenue.

"Probably in four or five years, AI will be 99 percent of the value of SpaceX," Musk said in a 29-minute address posted on SpaceX's X account Tuesday. "I'd say five years for sure."

SpaceX ended Q2 with 1.4 gigawatts of nameplate AI compute, up from roughly 0.4 GW a year earlier, and reported $2.6 billion in AI revenue, up 213 percent sequentially. The company's first earnings call on Aug. 4 showed total revenue of $7.8 billion, up 92 percent year over year, with $14.1 billion in contracted cloud services agreements including deals with Anthropic and Google.

The AI pivot extends beyond SpaceX's own books. Musk committed the company's compute stack to Nvidia's Vera Rubin architecture, and Melius Research analyst Ben Reitzes estimates even 2 to 3 gigawatts of execution in 2027 could generate roughly $100 billion in incremental Nvidia revenue. Nvidia reports earnings Aug. 26.

Compute Buildout Targets 10 GW by End of 2027

The 10-gigawatt target represents roughly a sevenfold expansion from current capacity, with Musk projecting $30 to $50 of revenue per watt. SpaceX spent nearly $16 billion on AI infrastructure in Q2 alone, building out GPU compute capacity that CFO Bret Johnsen said would pay for itself within a year of deployment. The company is already leasing excess capacity from its Colossus and Colossus II clusters to Anthropic, Google, and Reflection AI, with those partnerships reportedly adding billions per month.

The buildout runs through Terafab, a joint Tesla/SpaceX/xAI chip manufacturing complex in Texas. Musk also outlined plans for Starmind, a constellation of up to 1 million AI satellites in low Earth orbit, launched via Starship and assembled at lunar factories using electromagnetic mass drivers. In pre-IPO filings, SpaceX identified a total addressable market of $28.5 trillion, nearly $23 trillion of it in AI — compared with U.S. GDP of roughly $30.8 trillion last year.

Pentagon Awards $8.1 Billion as SpaceX Diversifies Beyond Launch

SpaceX's military business is expanding in parallel. Two recent Space Force awards — a $2.29 billion contract for the Space Data Network, a secure LEO communications backbone, and a $4.16 billion contract for the space-based Airborne Moving Target Indicator constellation — bring the combined total to $8.1 billion. The awards reflect a shift where missile defense investment increasingly flows to commercial space companies rather than traditional radar and interceptor contractors.

Argus Research upgraded SpaceX (NASDAQ: SPCX) to Buy from Hold with a $160 price target, citing AI infrastructure investments as the primary driver. The company's AI compute capital behaves more like cost-of-goods-sold than traditional multi-year capex because new racks fill almost immediately in the current GPU scarcity environment, Argus noted.

Meanwhile, the Starlink constellation continues to grow. Two Falcon 9 missions on Aug. 11 added 53 satellites, bringing the program to 12,721 launched, 10,963 in orbit, and 10,947 working. Musk predicted Starlink will eventually carry more than 90 percent of global internet traffic.

For investors, the September revenue crossover is the key date. If SpaceX's AI revenue indeed surpasses its space business next month, and Nvidia's Aug. 26 guidance reflects the Vera Rubin allocation Musk described, the "99 percent" framing shifts from hyperbole to roadmap. Nvidia shares, trading at $224.09 and up 20.16 percent year to date, have already priced in part of the AI infrastructure supercycle — but the scale of SpaceX's commitment suggests the demand side has room to run.

This article is for informational purposes only and does not constitute investment advice.