SpaceX plans to use 440,000 Nvidia Rubin chips for new AI cluster

SpaceX enters the AI era

SpaceX is pivoting toward a massive expansion in artificial intelligence through its new business unit, Super Intelligence (SI). This division recently reported an 835% year-over-year increase in sales, fueled by compute deals and the acquisition of the coding company Cursor. The unit also achieved its first profit, generating $431 million in operating income.

Elon Musk noted that he utilized the same team responsible for the success of SpaceX's rocket business to build out this AI infrastructure. He described the current state of the competition as lopsided, comparing the company's capabilities to the New York Yankees playing in Little League. This aggressive expansion is supported by the enterprise adoption of the Grok AI model.

The company is already establishing itself as a major player in the cloud compute space. It currently rents out power from its Colossus I data center cluster, securing monthly revenue agreements worth $920 million from Alphabet and $1.2 billion from Anthropic. These partnerships provide a steady foundation as the company scales its hardware footprint.

The Colossus II expansion

To meet growing demand, SpaceX is currently constructing a second massive data center cluster known as Colossus II. Musk announced that this facility will predominantly feature Nvidia's Vera Rubin chip infrastructure. He specified that the company needs 440,000 Vera Rubin computers deployed to achieve optimal training for its models.

The distinction between chips and computers is important for understanding the scale of the investment. While a chip is a single component, a computer system represents a full-stack infrastructure that generates more revenue for the manufacturer. By opting for the full-stack Vera Rubin computers, SpaceX is moving toward a more comprehensive hardware integration.

The goal is to have the most powerful training cluster online by the second quarter of next year. This infrastructure will primarily serve Grok Bot, which Musk envisions acting as a human agent in various roles. The company expects the bot to be the primary consumer of the additional compute power provided by the new cluster.

Impact on Nvidia's outlook

This announcement provides a significant boost for Nvidia investors who are watching for signs of sustained demand. While Wall Street expects Nvidia sales to reach $692 billion next year, the company is aiming for even higher figures. Nvidia CEO Jensen Huang has forecasted $1 trillion in sales through 2027 from the Blackwell and Rubin lines alone.

The demand from SpaceX aligns with broader trends in the AI industry as it moves from research to global rollout. Analysts suggest that the current phase is just the beginning of a much larger expansion. If SpaceX succeeds in its goals, it could become one of the largest companies in the world by sales, creating a massive customer for Nvidia's hardware.

Nvidia's CFO, Collette Kress, expects a 70% increase in sales next year despite a supply-constrained environment. The commitment from a major player like SpaceX suggests that the appetite for high-end compute remains robust. This could provide the necessary momentum to reach the multi-trillion-dollar sales targets set by the company's leadership.

SpaceX's financial trajectory

SpaceX's financial health is showing a sharp upward trend as it diversifies its revenue streams. The company recently reported a 161% increase in revenue and a net income of $4.4 billion. This marks a significant milestone as it represents the company's first quarterly profit, signaling a shift toward sustained profitability.

Musk has set ambitious targets for the company's growth over the next few years. He believes SpaceX could reach between $500 billion and $1 trillion in annual recurring revenue by the end of 2027. Achieving these numbers would place the company among the largest entities in the global economy based on total sales.

The company's growth is being driven by a combination of its core rocket business and its new AI ventures. By perfecting reusable spaceships and increasing satellite bandwidth by 100x, SpaceX is building a multi-faceted tech giant. The integration of these technologies with high-performance AI compute creates a unique position for the company in the next decade.