Deutsche Bank says SpaceX stands to gain as political opposition to artificial intelligence data centers intensifies, according to a report.
After Democrats won a sweeping midterm victory, markets are worried that the party, once empowered in Congress and multiple states, will tighten oversight of artificial intelligence. Stricter AI regulation and local restrictions on data center construction could slow the pace of US AI infrastructure investment.
Deutsche Bank expects that after the US midterm elections, political pressure may slow data center construction, with the impact mainly appearing in 2028, keeping compute supply persistently tight and leasing prices for compute power elevated for longer.
Deutsche Bank maintained its "Buy" rating on SpaceX (SPCX.US) with a price target of $250. Analyst Edison Yu raised the company's 2028 EBITDA forecast by $18 billion to $237.1 billion, while lifting its revenue estimate by $18.7 billion to $315.3 billion. The revision also reflects a larger contribution from the company's cloud business.
SpaceX has already been leasing compute capacity to Alphabet (GOOGL.US) and Anthropic. Deutsche Bank expects the cloud business to account for more than half of SpaceX's fourth-quarter revenue.
Why fewer data centers could mean more revenue
AI developers need massive amounts of compute. When new facility construction is delayed, customers have fewer places to rent compute, giving operators that already own ready capacity stronger pricing power.
Musk acknowledged the stakes on Monday. He wrote on social platform X: "If compute becomes abundant and cheap, SpaceX's revenue will fall."
Deutsche Bank believes SpaceX could exploit the compute shortage by giving customers 90 days' notice to terminate existing compute contracts, then demanding higher prices when signing new deals. The bank sees this as a possibility but has not yet factored it into its earnings forecasts.
Venture capitalist Chamath Palihapitiya made a similar point on the "All-In" podcast. He said that if compute remains scarce, Anthropic may have no choice but to accept higher prices.
Tighter regulation could also hinder SpaceX's expansion plans
However, political pressure could likewise constrain SpaceX's expansion plans. SpaceX is advancing a $24 billion gas-fired power project and compute facility construction in Texas. But Texas Governor-elect Gina Hinojosa has pledged to pause approval of new projects until state lawmakers establish safeguards to protect electricity costs, water supply and local communities.
Deutsche Bank believes SpaceX can still add about 1 gigawatt of compute capacity in Texas, and specifically cited the company's 6-gigawatt construction plan in Arizona, though the construction cost per gigawatt of compute capacity may rise.
Musk said last Friday: "It's extremely difficult to increase compute supply at scale." He believes construction workers have been spread across too many projects, straining labor resources.
Meanwhile, traders on prediction market Polymarket put the probability of a statewide data center construction moratorium in Texas before the end of 2027 at about 22%, and at about 34% before the end of 2028, with roughly $828,000 in trading volume on the related contracts. Those contracts require restrictions to be formally established through legal or constitutional provisions, meaning a government pause on issuing construction permits could still slow projects without necessarily triggering payouts.
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