Elon Musk's AI venture, SpaceXAI, is laying the groundwork to construct at least one new large-scale data center in Texas, according to three individuals familiar with the project. This move could substantially increase the company's AI computational capacity beyond its existing data center hub in Memphis, Tennessee.
As the company's current AI business expansion has fallen short of expectations, and following a series of agreements to lease out computing power to external firms, this expansion could help position SpaceXAI as a significant cloud services provider.
Two of the informed sources revealed that SpaceXAI has been evaluating multiple potential sites for data centers in Texas over recent months. The company is reportedly exploring various expansion models, including building multiple new facilities from the ground up and repurposing existing warehouses. This approach mirrors the strategy used for its first data center in Memphis, which involved converting an old manufacturing plant.
One source indicated that the goal is to establish a data center cluster in Texas that matches or even surpasses the scale of the existing Memphis campus. SpaceX has stated that its two operational data centers collectively possess approximately 1 gigawatt of computing power, deploying hundreds of thousands of Nvidia graphics processing units (GPUs).
Two insiders disclosed that SpaceXAI has already reassigned some staff from its existing data centers to Texas to prepare for the local expansion project. Recent job postings show the company hired a Data Center Development Lead last month in Austin and Bastrop, Texas. This role involves overseeing construction and managing related affairs, including "screening potential land parcels and negotiating leases or acquisitions." Earlier this month, SpaceX also posted temporary positions to support the construction, expansion, and operation of data centers in locations like Conroe, Texas.
SpaceX has publicly stated its long-term ambition is to build and operate a large-scale network of orbital data centers. However, its current AI infrastructure expansion efforts remain focused on terrestrial projects. The company has noted that, in addition to its existing facilities, it may continue to expand ground-based data centers, though it has not publicly disclosed specific locations for planned increases in AI computing capacity.
This new wave of expansion is likely to further increase the already substantial investment in AI infrastructure. SpaceX's AI-related capital expenditure surged to $7.7 billion in the first quarter, roughly triple the amount from the same period last year. Ahead of its initial public offering in June, analysts at Morgan Stanley projected that the company would consume a combined $120 billion in cash during 2026 and 2027, primarily driven by AI-related capital spending.
Data from LinkedIn shows that SpaceXAI significantly expanded its data center team over the past year, adding more than 40 employees to its "Colossus" team. One source mentioned that since the merger of the two entities was completed in February, the AI division has also transferred several SpaceX employees to support data center operations.
According to the sources, SpaceXAI has been assessing the feasibility of expanding its data center presence in Texas for several months. The past year has seen multiple organizational restructurings and frequent management changes within the company. Notably, xAI co-founder Ross Nordeen departed in March. Two sources stated that Nordeen was previously responsible for the company's data center construction projects and reported directly to Elon Musk on their progress.
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