The Motley Fool says SpaceX faces rising AI power costs and growth risks

Financing and AI expansion plans

The Motley Fool reports that Space Exploration Technologies, or SpaceX, has reportedly arranged $40 billion in debt financing for artificial intelligence chips. The article says the final terms and the status of that financing are still unclear. SpaceX expects capital spending of $35 billion to $40 billion in the fourth quarter of 2026. According to the article, the company’s next challenge is not only obtaining more AI chips, but also securing enough electricity and supporting infrastructure to run them.

Capacity, power use, and risk from delays

SpaceX said it had 1.7 gigawatts of installed AI computing capacity as of Sept. 30. The article explains that this figure is based on the power ratings of the company’s GPUs, not on the electricity they actually use, and it excludes cooling and other data center functions. The Motley Fool cites Reuters as saying electricity shortages and slow grid hookups are already leaving some expensive AI chips underused and losing value. The article says SpaceX could face the same problem if its electricity buildout lags its GPU purchases, because that would delay revenue while the equipment continues to depreciate.

Power supply efforts and related bottlenecks

In a recent earnings call, Chief Executive Officer Elon Musk said SpaceX planned to add about 10 gigawatts of computing capacity in 2027, which would bring total capacity to roughly 13 gigawatts. The company is also building its own power-generation capacity for AI data centers. The article says SpaceX is applying manufacturing methods from its rocket engines to make blades and vanes for gas turbines used to generate electricity. Musk said those components were taking 12 to 18 months longer to deliver than other turbine parts, and SpaceX expects internal manufacturing to speed up power availability.

The Motley Fool also reports that faster power can cost more. Reuters said smaller gas turbines that can be installed sooner may have up to 50% higher capital costs per unit of electricity generated than larger, more efficient options. The article adds that this is an industry estimate, not SpaceX’s own cost. Reuters also reported in July that delivery times for certain power transformers had exceeded 160 weeks by early 2026. On Oct. 22, cable maker Nexans warned that limited cable production capacity was also becoming a bottleneck for AI data center construction. The article says these shortages could affect SpaceX even if turbine delays are solved. It also notes that the Tennessee Valley Authority approved a new rate structure in August that is expected to raise electricity charges for existing data center customers by about 10% over three years, while new projects face additional charges for grid capacity.

Profit, spending, and contract risks

The Motley Fool says SpaceX’s Super Intelligence segment, formerly its AI division, brought in nearly $7.6 billion in revenue and $431 million in operating income in the third quarter. Its Connectivity business, including Starlink, generated another $2.4 billion in operating income. The company also had nearly $90 billion in cash and marketable securities at the end of the third quarter. Even so, SpaceX generated $13.1 billion in operating cash flow but spent $48.1 billion on capital expenditures in the first nine months of 2026, resulting in nearly $35 billion of negative free cash flow. About $40 billion, or 83%, of that spending went to the SI segment.

Management says new computing deployments are earning back their cost in less than a year at current prices. The article says it is not clear whether that estimate includes full electricity infrastructure and financing costs, and it notes that future GPU replacement costs could also affect returns. Another risk is customer concentration: one unnamed customer accounted for 34.5% of SpaceX’s third-quarter revenue. The article says cloud-service contracts usually last three years but can generally be ended by either side with 90 days’ notice. SpaceX also disclosed $37.8 billion in noncancelable commitments, including AI infrastructure spending, third-party cloud services, and a separate spectrum purchase that is payable partly in shares. The Motley Fool says this leaves SpaceX responsible for substantial long-term spending even if customers leave or pricing weakens.

Valuation and the article’s view

The article says SpaceX was trading at 61 times trailing-12-month sales as of Oct. 29. The Motley Fool says strong AI demand, profitable Starlink operations, and ample financing support the company’s long-term outlook, but at the current valuation the author would wait for proof that new computing capacity can produce durable cash returns after infrastructure costs. The article adds that SpaceX does not need to solve all of its power issues before becoming a buy.