Elon Musk may have pitched a future where space powers AI, but Wall Street analysts stated that SpaceX’s near-term value stays strongly anchored to Earth, in which it is constructing out the infrastructure driving the AI surge.
Infrastructure providers, specifically data facilities, are likely to be amongst the largest beneficiaries of the AI growth as businesses and consumers hastily adopt the technology for applications varying from software coding and robotics to everyday tasks which includes shopping and planning.
SpaceX, a major AI player, has already began monetizing compute via striking deals with enterprise clients, along with Anthropic, for its Colossus supercomputer clusters. In contrast, its orbital AI plan stays an extended-term opportunity that relies upon on the introduction of Starship rockets, lower release costs and technological advances.
Company filings interpreted by Reuters and commentary from research houses reflects that revenue from its latest compute contracts is about to a exceed sales from other segments this year.
“The narrative that (orbital) will essentially disrupt terrestrial data centers is a little bit overblown. Any type of displacement of terrestrial data centers is 10 years plus out,” stated Anthony Milovantsev, a partner at consultancy firm Altman Solon.
J.P. Morgan anticipates SpaceX to broaden terrestrial AI compute capacity to approximately 9 gigawatts by 2029 – aroun equivalent to 4 times the power formed by the Hoover Dam.
“Beyond 2029, we anticipate SpaceX to pivot to orbital compute for incremental capability additions, while persisting to operate and keep its terrestrial compute clusters,” the brokerage stated.
Terrestrial Compute Starts to Pay Off
SpaceX’s deals with Anthropic, Alphabet’s (GOOGL.O), and Reflection AI for its Colossus compute facilities are anticipated to create more than $28 billion in annual revenue.
That figure a long way exceeds SpaceX’s 2025 AI revenue of approximately $3.2 billion and exceeds revenue from its release and Starlink connectivity businesses individually, as per Reuters calculations.
Analysts advised that the contracts contain termination provisions and should not be reviewed as guaranteed long-term recurring revenue.
SpaceX invested around $18 billion in AI infrastructure and development in 2025, including around $12.7 billion in AI-associated capital expenditure and $5.1 billion in AI research and development, dwarfing spending on its space and connectivity businesses, as per company filings analyzed via Reuters.
Colossus and Colossus II collectively provide around kind one gigawatt of AI compute potential, placing SpaceX among the world’s largest AI compute operators. Analysts anticipate that footprint to amplify numerous-fold over the next few years.
Numerous brokerages also cite SpaceX’s $60 billion acquisition of AI coding startup Cursor as evidence the company is broadening past infrastructure into enterprise software, permitting it to monetize both AI applications and the computing capacity behind them.
Orbital AI Stays a Long-Term Bet
Most brokerages that introduced coverage of SpaceX following its IPO are treating orbital AI as a longer-term opportunity, even as basing their near-term period financial forecasts around terrestrial AI infrastructure.
“We view the long-term viability of orbital data centers as unproven and highly depending on main technological milestones that have yet to be absolutely realized,” BofA analysts stated in a note.
Analysts widely anticipate terrestrial compute to drive SpaceX’s growth and earnings for the rest of the decade, with orbital AI depending on Starship accomplishing fast reusability, lower release prices and advances in satellite engineering.
Most say that Starship may eventually support deploy solar-powered computing satellites that should lessen costs related with energy, cooling and land – some of the bugbears of terrestrial data centers.
The debate, analysts say, is not about SpaceX’s ability to build and monetize AI infrastructure. Instead, it’s more about how rapidly it turns that opportunity into a viable business beyond Earth’s atmosphere.
