Elon Musk has told SpaceX employees that the power capacity of xAI's data centers will grow sevenfold to 10 gigawatts by the end of 2027. If that happens, Musk says the data centers could bring the company between 300 and 500 billion US dollars in annual revenue. The announcement comes at a time when SpaceX's market capitalization had dropped by nearly 570 billion US dollars in less than two months.
From 1.4 to 10 gigawatts
Currently, xAI's data centers in Memphis and Southaven have a rated power draw of 1.4 gigawatts. By the end of 2027, roughly a year and a half from now, the company wants to increase that capacity sevenfold. "We have already built the most powerful AI training clusters in the world," Musk told SpaceX employees at a meeting. "What we expect to do by the end of next year is about 10 times more than what we have done thus far. If the value per watt is probably going to be $30 to $50, which means if we bring 10 GW of AI compute online by the end of next year, it will be $300 to $500 billion a year in revenue."
The stated power draw doesn't directly translate into actual compute capacity. With typical data center efficiency, part of the power goes to cooling, power distribution, and other facility systems, and of the remaining IT power, only a portion goes to the AI accelerators themselves, with the rest consumed by CPUs, memory, networking, and storage.
A race with an uncertain outcome
For the planned expansion, xAI is currently betting mainly on Nvidia's upcoming Vera Rubin systems. If the company actually reaches the targeted 10 gigawatts with this hardware, the resulting cluster would far exceed the combined compute performance of every system on the Top 500 list of the world's fastest supercomputers, as well as every AI cluster currently in operation.
Whether that compute capacity can actually generate 300 to 500 billion dollars in annual revenue remains to be seen. SpaceX isn't the only company selling compute capacity to AI companies, and competition is likely to stay fierce. After peaking at 2.44 trillion dollars in market capitalization on June 20, SpaceX's value had dropped to 1.43 trillion dollars by August 1, before rebounding to 1.87 trillion dollars by August 12.