SpaceX Wants To Turn AI Compute Into A $500B Business Next Year – And Elon Musk Says NASA’s Annual Budget Is No Match

Baron touted $50 billion in annual rental revenue from $35 billion data-center investments.

• Musk sees annualized revenue exceeding $100 billion this December and $500 billion by December 2027.
• Chamath said SpaceX could seek two to three times Anthropic’s current compute price after giving 90 days’ notice.
• However, Musk warned that cheaper capacity could also reduce revenue.

SpaceX (SPCX) shares jumped over 2% overnight late Sunday as CEO Elon Musk projected a $500 billion annual revenue run rate next year and said one quarter’s revenue would exceed NASA’s entire annual budget.

SPCX stock jumped nearly 9% to $134.27 on Friday but finished the week down 0.3%, posting its second consecutive weekly decline. 

Musk’s $500B Revenue Vision

At Friday’s Baron Investment Conference, Musk projected SpaceX’s annualized revenue could exceed $100 billion this December and $500 billion by December 2027, driven by ambitions in AI infrastructure, chips and orbital computing. SpaceX acquired xAI in February, bringing Grok into the company.

The $500 billion figure was his “best guess” and not a promise, putting the chance of reaching $1 trillion at 2%. Musk estimated revenue grew more than 80% between the second and third quarters, with 70% growth possible in each of the next two quarters.

“SpaceX revenue this quarter alone will be substantially higher than NASA’s entire annual budget!” he said separately on X. He pointed to NASA’s $18.8 billion fiscal 2027 budget request. The agency received about $24.4 billion in fiscal 2026 appropriations, according to the Congressional Budget Office. 

Baron also spoke about renting data centers to other companies before their capacity is needed for Grok. “So we’re getting 50 billion a year for 35 billion dollar investments,” he said, adding that construction takes eight or nine months, versus two-and-a-half years and $60 billion for competitors. “It is extraordinarily difficult to bring on compute at scale,” Musk cautioned.

His Terafab plan targets a terawatt’s worth of AI chips annually, which is 30 times his estimate of next year’s global production. Costs could exceed $1 trillion. “But we won’t need that money immediately. We’ll be building phases,” Musk said.

The plan pairs an Austin research fab with production in Grimes County, Texas, aiming to shorten chip-development cycles from a year to a month and reduce exposure to Asian supply disruptions.

Compute Squeeze Could Strengthen SpaceX’s Hand

Meanwhile, billionaire tech investor Chamath Palihapitiya argued that a squeeze in data-center supply could allow SpaceX to charge Anthropic substantially more for computing power.

On the All-In Podcast, he said their agreement allows either company to terminate on 90 days’ notice. SpaceX could then seek two to three times the current price, potentially doubling or tripling its revenue from Anthropic, which he argued would have little choice but to accept.

He said tighter supply could also force independent cloud providers to pay higher prices or risk being pushed out. Musk noted that prices could move the other way on X. “It works both ways, of course. If compute becomes plentiful and cheap, SpaceX revenue will drop. No crying in the casino for either party,” he said.

Musk’s Orbital AI And Telecom Ambitions

Musk expects SpaceX to begin launching Nvidia-co-designed StarMind computers in the third quarter of 2027, with deployment increasing in 2028 and 2029. “When we unveil the details of the Starmind computer next year, it will blow people’s minds,” he said on X.

At the conference, Musk outlined a hypothetical scenario in which deploying 100 gigawatts of orbital AI computing annually could add $1 trillion in annual revenue, depending on pricing. For Starlink, he predicted 100-fold bandwidth growth within two or three years and floated buying a legacy telecom operator for its spectrum, without naming a target.

His longer-term vision includes more than 100,000 satellites, each potentially carrying around 100 laser links operating above 10 terabits per second. Musk said such a network could compete with undersea cables.

“Information traveling through space in our solar system will ultimately exceed current Earth traffic by a trillion trillion times. People have no idea,” he said on X.

Starship’s Next Flight Puts Full Reuse To Test

Musk said full Starship reuse could eventually cut launch costs below $100 per kilogram and, in principle, allow a Super Heavy booster to fly once an hour. SpaceX’s next flight will attempt to catch both Super Heavy and Starship, advancing its push toward full reusability.

“If both are successful, it will mark the first time that all parts of an orbital rocket return to Earth intact. This is the critical breakthrough needed to make life multiplanetary,” Musk said. He also floated replacing the booster’s outer-ring engines with a 500-ton-thrust Raptor 4, doubling the thrust of the 250-ton Raptor 3.

SpaceX Joins NASA’s Lunar Delivery Competition

NASA named SpaceX among eight companies eligible to compete for lunar deliveries under CLPS 2 on Saturday. The 10-year program has a shared $10 billion contract ceiling.

The agency also selected SpaceX to launch communications satellites aboard Starship into the region between Earth and the Moon in 2028, helping develop networks for future lunar missions.

How Do Retail Traders Feel About SPCX?

On Stocktwits, retail sentiment for SPCX flipped to ‘bullish’ from ‘bearish’ levels a week ago amid ‘high’ message volume.

One user said, “$SPCX During the conference yesterday Elon threw out a lot of lofty numbers and goals. Even if only half of the goals come true I can see SpaceX  could be  a 10x stock. Buy, accumulate and hold.”

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Another user said, “$SPCX below $130 soon this week is choppy.. keep your powder ready.”

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SPCX stock has declined 17% year-to-date.

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