SpaceX plans to launch its first artificial intelligence satellites powered by Nvidia technology in the fourth quarter of 2027. Elon Musk announced the plan earlier this week, saying that running AI workloads in orbit could eventually cost less than operating data centers on Earth.
Space Exploration Technologies Corp., SPCX
Musk also said the orbital approach could have a smaller environmental footprint than land-based data centers. He expects the orbital network to reach scale by 2028.
During Nvidia’s earnings call on August 26, CFO Colette Kress confirmed that the company’s Vera Rubin system is now in full production. Shipments are going to Oracle, Amazon, and SpaceX.
Nvidia also disclosed that it owns 122.8 million SpaceX shares. That makes Nvidia both a major technology supplier and a shareholder in SpaceX.
Evercore ISI analysts said this relationship runs both ways. They described SpaceX as among the earliest customers for the Vera Rubin system.
Musk confirmed that SpaceX data centers will run exclusively on Nvidia hardware. SpaceX also completed its $60 billion all-stock acquisition of Cursor in August. The AI coding tool has an annualized revenue run rate of more than $1 billion.
Evercore ISI analyst Kutgun Maral sees orbital computing as a potential growth opportunity. The firm does not expect it to generate meaningful revenue for SpaceX until at least fiscal year 2029.
Evercore models the first 1 gigawatt of orbital capacity coming online in 2029. It expects that to reach 8 gigawatts of orbital capacity by the end of that year, compared to 10 gigawatts of land-based capacity.
The firm said if some of the 2029 build moves into 2028, that would be a meaningful capacity unlock. Musk has discussed economics of $30 to $50 per watt for the orbital systems.
Evercore holds an Outperform rating on SpaceX stock with a $230 price target. The average analyst price target sits at $228.59, implying upside of around 61% from current levels. SpaceX carries a Moderate Buy consensus based on 24 buys, six holds, and three sells.
The project faces real technical challenges. Cooling systems are much harder to build in space because there is no atmosphere to carry heat away.
A Brookings Institute report noted that properly expelling heat from a single orbital data center could require 2.15 million square feet of radiators. That is a major engineering challenge with no simple solution yet.
Satellites also face radiation from the sun and the growing risk of collisions in orbit. Regulatory approval could slow the rollout as the network scales.
The central question is whether SpaceX can move from a single test launch in 2027 to a large working network in the years that follow.
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