Elon Musk's vision for taking electric vehicles mainstream at Tesla helped make him the world's richest man.
Now he's pulling up to the gas pump.
Last week, SpaceX disclosed plans to build a natural gas power plant in Grimes County, Texas, where the company is developing a huge new chip manufacturing facility.
At other campuses in Tennessee and Mississippi, Musk is relying on dozens of gas turbines to power data centers he says are necessary to train the artificial intelligence at the center of his business plan. Earlier this year, Musk even bought a gas turbine manufacturer as a personal investment, regulatory disclosures show.
Driving the build-out, and Musk's pivot, is SpaceX's immense need for fuel and power to develop next-generation AI. The company's data centers this spring already accounted for three-quarters of the 2 gigawatts of data center power that was being generated behind-the-meter, or outside of the U.S. electrical grid.
On an Aug. 4 investor call, Musk said that capacity could swell to around 10 gigawatts by the end of 2027, or even reach 15 gigawatts. That would make SpaceX the biggest data center operator in the U.S. Amazon, the current leader, has around 13 gigawatts, according to data firm Cleanview, which tracks data center projects.
Musk built much of his fortune on technologies designed to replace fossil fuels: electric vehicles, batteries and solar cells. A decade ago he called burning fossil fuels "the dumbest experiment in history," warning they would eventually run out. Tesla's mission at the time was to "accelerate the world's transition to sustainable energy."
In recent years, though, his views have changed. As he moved right politically, donating hundreds of millions of dollars to President Trump and Republicans, he took the word "sustainable" out of Tesla's tagline.
Some Musk supporters argue that SpaceX's recent investments can reduce energy use over the long term. The company aspires to launch data centers in space, powered by solar energy. Gas allows SpaceX to move quickly, and success could lessen its need for ground infrastructure.
"I do think that AI training will continue to be on the ground but AI inference, the day to day use of AI, will be in space," Musk said in a company all-hands Tuesday, which was streamed on his social network X.
To help power those orbital data centers, SpaceX said it plans to build a new solar factory in Bastrop, Texas.
Speed to power
Plugging into the power grid quickly isn't possible with most AI-scale projects. The only kind of 24/7, do-it-yourself power generation available in the short term comes from natural gas.
A 1-gigawatt AI data center can devour roughly as much electricity as 1,000 Walmart stores, or the entire city of San Francisco. Delivering that much power to one location is difficult without major transmission investments, which take years. In many regions, new data centers may not be able to connect to the grid until the 2030s.
Companies are opting to build their own on-site gas-powered plants that may not be connected to the power grid, part of a trend known as "Bring Your Own Power."
Last week SpaceX disclosed details of its plans for a $16.8 billion, 100 million square foot chip manufacturing facility, part of a project it is calling Terafab. To power it, the company plans to build and run its own natural gas plant, alongside tapping in to the local grid.
"We're bringing our own power," said Riley Trettel, a company lead for the development of Terafab, at the Grimes County Commissioners Court last week. "We are going to be building very large battery arrays in order to store energy."
Musk embraced the concept in the summer of 2024, when semi-trucks arrived in Memphis, Tenn., carrying mobile natural gas generators for the data center project he called Colossus. The move led to friction and legal conflicts with local residents and advocacy groups. It also enabled Musk's xAI, then a stand-alone company, to build its first data center in four months.
A similar grid-connected project in a market like Virginia would have taken five-plus years, according to Michael Thomas, founder of Cleanview. SpaceX's Memphis-area sites have since grown to include four properties along the Tennessee-Mississippi border.
The original Colossus campus now receives grid power, estimated around 300 megawatts, and has almost 200 megawatts of turbines on site, according to satellite photos from May analyzed by Cleanview. About two-thirds of the mobile turbines had been removed.
The second, much larger Colossus campus relies on power from a site in Mississippi where the company has been adding turbines. As of July 30, xAI, now a part of SpaceX, had 69 temporary turbines at the site, according to an agreement with local regulators obtained through a public records request.
Deals and copycats
SpaceX's unconventional power strategy has enabled it to strike cloud computing deals with Anthropic, which is set to pay SpaceX $1.25 billion a month, and with Google, which is set to pay $920 million a month, the companies said.
Earlier this year Musk acquired a Florida-based gas and diesel turbine manufacturer, according to a Federal Trade Commission filing. That deal valued the company at around $1 billion, according to a public filing from a company that had held an ownership stake. Musk hasn't commented on the purchase.
Other players are taking cues from Musk. Cleanview is tracking 59 data centers with on-site power generation that aren't connected to the power grid. Together they have a combined capacity of about 90 gigawatts -- roughly enough to power Texas on the hottest day of the year.
Chevron recently struck a 20-year agreement to sell electricity to Microsoft in West Texas, fueled by Chevron's gas production. Pipeline giant Williams Companies is building off-grid natural gas power generation for Meta in Ohio.
A recent McKinsey survey found that 65% of power industry respondents are planning to use on-site generation. Of those, 64% said they would rely on natural gas.
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