SpaceX's AI Cloud Business Is Taking Off, Says Deutsche Bank

Summary

Deutsche Bank's Edison Yu discusses SpaceX's rapidly growing AI cloud compute business, which could reach a $40B+ run rate by year-end and is central to the company's $100B annualized revenue target. He also covers the challenges of scaling orbital data centers, the exclusive Nvidia chip deal, and Starship's progress toward reusability, which underpins SpaceX's long-term ambitions.

• SpaceX's cloud compute leasing business is estimated to hit a $40B+ annualized run rate by December 2025.
• The company disclosed an additional $6.7 billion in cloud services contracts over six months in early Q3.
• Combined with AI segments like Grok and advertising, total AI revenue could approach a $60B run rate.
• SpaceX plans to launch orbital data center prototypes next year using Nvidia Vera Rubin architecture.
• Scaling orbital data centers to gigawatt level remains the major challenge due to cost and volume requirements.
• Elon Musk pulled forward his $1 trillion revenue expectation for SpaceX from 2031 to 2030, with a nonzero chance for 2029.
• Analyst Yu models revenue closer to one-third of that target but sees significant upside for the stock even at lower levels.
• Starship's operational cadence is on track, with expectations for 15-20 flights next year, pending second-stage recovery and heat shield improvements.