How Much Is SpaceX's AI Business Really Worth? Here's the Math.

Space Exploration Technologies (NASDAQ: SPCX) is one of the most ambitious and aggressive companies on the planet. Among CEO Elon Musk's more hyperbolic assertions is that it could eventually be worth more than the entire economy of Earth. It has huge goals that extend beyond this planet into space, eyeing ventures such as deploying a fleet of data center satellites, mining asteroids, and colonizing Mars.

While those more ambitious undertakings will likely be further out, the company's biggest growth driver in the nearer term will be its artificial intelligence (AI) businesses, which now fall under its newly named "super intelligence" (SI) segment. This includes its AI infrastructure business, AI software engineering platform Cursor, its Grok large language model (LLM), and social media platform X.

In the third quarter, that segment's revenue climbed 830% from $813 million a year ago to $7.56 billion, making it the largest segment by revenue. Meanwhile, the segment reported an operating profit of $431 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of nearly $5 billion.

Huge growth ahead

The bulk of the SI segment's value will come from its AI infrastructure business. SpaceX is on track to become the world's largest neocloud. It ended Q3 with compute capacity of 1.7 gigawatts, as it continues to build out its Colossus II data center cluster. It plans to end the year with between 2.5 gigawatts and 3 gigawatts of compute power.

However, that is small potatoes compared to where Musk and company plan to take SpaceX's computing capacity next year. After originally saying the company would likely end 2027 with total computing capacity closer to 10 gigawatts of power than 5 gigawatts, he upped his forecast: He now is setting a target for the company to reach 13 gigawatts by the end of next year. Meanwhile, Musk said his moonshot goal was to reach 20 gigawatts of capacity in 2027.

SpaceX has been renting some of its computing capacity on short-term monthly leases, and getting great rates for it. It has said that its chip and networking investments are reaching breakeven within one year and thinks it can push that down to around six months in the future.

Earlier this year, Musk announced that SpaceX would use Nvidia's newest Vera Rubin platform in its data centers going forward, as it was the best on the market. One gigawatt of Vera Rubin computing capacity, meanwhile, costs around $50 billion, and it said it was getting just above $50 per watt. That implies that 1 gigawatt of capacity is generating a little more than $50 billion for SpaceX in annual revenue.

Image source: The Motley Fool.

As such, it is easy to map out how much revenue SpaceX could generate at current rates if it can add 10 gigawatts of computing capacity a year going forward. Management has talked about renting out half its capacity and using 50% internally, although we'll assume both can generate similar revenue. Place a sales multiple of 5 on this revenue, and its AI infrastructure business alone would be worth $10.75 trillion in 2030.

Meanwhile, you also have Cursor, which SpaceX recently acquired for $60 billion. Morgan Stanley projected that Cursor could end 2030 with annual recurring revenue (ARR) of $33 billion. Place a multiple of 10 times sales on that, and it would be worth $330 billion.

Data source: Author AI infrastructure, Grok, and share estimates, with Morgan Stanley estimates for Cursor. *These are speculative numbers.

Combined, that would value the company's AI business at around $11 trillion. Assuming that the shares undergo some dilution as it issues additional stock to pay for its AI infrastructure build-out, the value per share of the AI business alone could be worth $585 in five years; that doesn't include its rocket launch arm or the Starlink satellite broadband business.

That's a lot of potential for the stock, and while there are certainly risks, such as market prices per watt falling, it looks like the stock has a lot of upside from here over the next several years.

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Space Exploration Technologies. The Motley Fool has a disclosure policy.