SpaceX as an AI Company First
SpaceX (SPCX) built its story on rockets and Starlink at IPO, but the bigger driver over the next 12 months looks like AI compute. Within a year, AI compute should become the largest part of its revenue, turning it into an AI company with rockets and Starlink as side businesses.
By the end of 2027, SpaceX (SPCX) plans to have 10 gigawatts of compute. That is likely the most in-demand product in the world right now. Each gigawatt can be rented out for $30 billion to $50 billion per year. On the frontier side, selling through Grok and xAI could reach roughly $100 billion per gigawatt if demand is strong enough. That $100 billion figure matches what OpenAI and Anthropic show in semi-analysis research. So SpaceX (SPCX) holds the choice to sell anywhere from $30-50 billion up to $100 billion per gigawatt.
The Revenue Forecast
Elon Musk said on the earnings call that SpaceX (SPCX) expects $100 billion in annual recurring revenue (ARR) by the end of this year, most of it from compute. Musk said he expects to land closer to 10 gigawatts than 5 by year's end. Some analysts published research saying 10 is reachable. SpaceX (SPCX) can build data centers faster than nearly anyone in the space and should become the biggest neocloud by around the middle of next year.
At 10 gigawatts rented at $30-50 billion each, that alone reaches $300-500 billion. About 10% of the compute is set to go to Grok and xAI, which should carry higher margins and higher revenue per gigawatt, adding more on top. Even if SpaceX (SPCX) reaches only 8 or 9 gigawatts instead of 10, ARR still tops $250 billion. The full forecast: $250-500 billion or more in AI ARR by the end of 2027.
The Wider Space Economy
SpaceX (SPCX) plays an unusual role because it cut the cost of reaching space so sharply, with a projected 99% reduction. This mirrors what happened in software when AWS lowered cloud costs and triggered a shift to the cloud economy. The same kind of drop unlocks a full economy across communications, defense, logistics, and even manufacturing in space, with SpaceX (SPCX) staying the dominant player.
Does SpaceX's AI growth speed up the broader space economy, or is it a SpaceX-only story? Both. The AI buildout matters, but the real driver is the space economy opening up. That economy is set to triple by 2035, based on McKinsey estimates.
Where is the biggest opportunity - SpaceX, the companies built around it, or something else? The next generation of companies. Alumni Ventures invests in venture-stage firms that gain from the space economy unlocking:
- Impulse Space, which just raised a Series D at a $4 billion valuation. That valuation is more attractive for future growth than the trillions SpaceX already sits at.
- Northwood, building the ground infrastructure for satellites, the communications piece.
- Axiom Space, building replacements for the International Space Station.
Added energy comes from workers who may leave SpaceX once their stock fully vests and becomes tradable, seeding a fresh wave of space startups. That mix makes early space companies look very attractive right now.
