Elon Musk's artificial intelligence company, SpaceX AI, is extending its data center network into Texas, with an expansion scale aimed at matching or even surpassing its existing Memphis facility, further highlighting the company's aggressive investment strategy in AI infrastructure.
According to a Wednesday report by tech media outlet The Information, SpaceX AI has been evaluating multiple sites in Texas and has begun laying the groundwork for at least one large-scale data center. The company has deployed some existing data center staff to the area and recently posted several infrastructure-related job openings in Austin, Bastrop, and Corpus Christi.
This expansion will further increase the already heavy capital expenditure burden for SpaceX AI. The company's AI-related capital expenditures for the first quarter surged to $7.7 billion, approximately three times the year-ago figure. Morgan Stanley analysts have previously predicted that SpaceX AI could consume a total of $120 billion in cash between 2026 and 2027, primarily due to AI infrastructure investments.
Multi-Site Strategy Targets Memphis Scale
SpaceX AI currently possesses approximately 1 gigawatt of computing power across two operational data centers, housing hundreds of thousands of NVIDIA GPUs.
Two individuals familiar with the matter told The Information that SpaceX AI has discussed various plans for the Texas expansion, including building multiple new data centers from scratch and retrofitting existing warehouses—the latter approach mirroring the company's conversion of an abandoned manufacturing facility in Memphis into its first data center.
In June of this year, Supermicro CEO Charles Liang stated on the X platform that his company was assisting SpaceX AI in building "another brand new gigawatt-scale AI data center" within a year, though he did not disclose the specific location. Supermicro has previously publicly promoted its partnership with SpaceX AI, supplying servers and cooling equipment based on NVIDIA technology.
It is worth noting that this expansion plan currently lacks a definitive timeline.
High Capital Consumption Spurs Diversified Revenue Efforts
In the face of continuously rising capital expenditures, SpaceX AI has begun seeking new revenue streams to achieve balance.
In June of this year, the company announced it would lease significant computing capacity to companies including Anthropic and Google, with Musk stating the company could reclaim the capacity if needed.
Concurrently, SpaceX AI has reached an agreement to acquire AI startup Cursor for $60 billion. Cursor is focused on expanding its business beyond programming and plans to develop a leading general-purpose model before the end of this year.
Management Restructuring and Infrastructure Team Expansion
Over the past year, SpaceX AI has undergone a series of organizational changes. Co-founder Ross Nordeen departed in March, having previously overseen the company's data center construction and reported frequently to Musk.
In early April, SpaceX AI President Michael Nicolls announced a new leadership structure via an internal memo: Jake Palmer would oversee physical infrastructure, while Daniel Dueri, SpaceX's Director of Software Engineering, would be responsible for computing infrastructure.
In terms of personnel, SpaceX AI's data center team, Colossus, added over 40 employees in the past year and, following the merger of SpaceX and XAI in February, brought in SpaceX employees to assist with operations.
Gas Dependency Sparks Controversy, Energy Strategy Spans Multiple States
Regarding energy security, SpaceX AI heavily relies on natural gas turbines to supplement grid power for its data centers. The company has installed dozens of mobile turbines in Tennessee and Mississippi and is developing a permanent gas-fired power plant in Mississippi through a joint venture with Houston-based Solaris Energy Infrastructure.
However, this energy strategy has faced strong opposition in Memphis. Local residents, politicians, and environmental groups have continued to pressure the company over the use of natural gas turbines and water consumption issues.
Earlier this year, SpaceX AI delayed the construction of an $80 million wastewater recycling facility as part of cost-cutting measures, further escalating tensions.
In the Memphis region, SpaceX AI is still advancing construction on a third data center and purchased a warehouse of approximately 75,000 square meters in Mississippi late last year. Additionally, SpaceX AI has stationed employees in Jacksonville, Florida, and posted data center job openings there. APR Energy, a power generation equipment supplier acquired by Musk in May, is headquartered in Jacksonville and operates in Tennessee, Mississippi, and Texas. SpaceX AI has previously purchased turbines from APR Energy.
Texas holds particular strategic significance for Musk—SpaceX and Tesla Motors are jointly building a semiconductor manufacturing facility in Grimes County near Corpus Christi. SpaceX AI's choice of Texas for this expansion aligns with the geographic consolidation trend across Musk's business ventures.
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