Over the last year, Space Exploration Technologies (NASDAQ: SPCX) -- more commonly known as SpaceX -- has quietly made itself into a critical supplier of artificial intelligence (AI) infrastructure. The company has channeled enormous sums into capital expenditures, building out data center capacity rapidly. During the second quarter alone, SpaceX allocated $15.8 billion of capex toward AI compute.
The company's aggressive investments have already delivered 1.4 gigawatts (GW) of nameplate capacity online, and it has ambitions to reach 10 GW by the end of next year. This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » The scale of this expansion raises the question of which companies might help underwrite SpaceX's data center expansion plans. According to a new report from research firm SemiAnalysis, Microsoft (NASDAQ: MSFT) emerges as a potential partner.
Here's why it's a logical candidate to be SpaceX's next AI data center customer. SpaceX has secured a few landmark agreements that underscore the viability of its AI infrastructure ambitions. A couple of months ago, Anthropic committed to pay $1.25 billion per month for access to over 300 megawatts (MW) of capacity at SpaceX's Colossus facility.
The multiyear agreement is valued at more than $40 billion through 2029. Google Cloud swiftly followed with a deal valued at $920 million per month. That partnership is scheduled to begin later this year, with Google Cloud accessing 110,000 Nvidia graphics processing units (GPUs) and supporting hardware.
The contract represents more than $30 billion in spend over its full term. Lastly, an Nvidia-backed start-up called Reflection AI has contracted with SpaceX to pay $150 million per month for compute in a deal that has a total value of $6.3 billion through 2029. These deals are central to the SpaceX investment thesis because they prove that the company can convert its underutilized data center capacity into high-margin recurring revenue -- validating secular demand from both frontier model developers and cloud hyperscalers.
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