SpaceX’s AI Endgame: Owning the Infrastructure Layer of Intelligence
SpaceX IPO, TeraFab, Orbital compute, Elon Musk's promises have only just begun. Tesla to merge in 2027.
Good Morning,
With NASA’s Artemis II mission (April 1st to 11th, 2026) going around the Moon right now, there’s a lot of buzz for the aspirational Lunar economy that’s coming. But what does this have to do with AI?
From historic space missions to historic IPOs, SpaceX’s IPO and the inclusion of xAI and likely next year in 2027, Tesla merging into the company as well, is going be a sight to behold. This could also help fund Elon Musk’s AI and vast orbital datacenter ambitions.
The Space race has AI characteristics now. The race to energy, compute and new resources.
Why it Matters?
These three IPOs: SpaceX, OpenAI and Anthropic in the next year could help define the future of AI for the next decade.
The size of the IPOs and the hype behind them is unprecedented in the history of technology. The Elon Musk vs. Sam Altman story is about to get a lot more interesting.
I remember when it was a rarity for a company to be worth over $2 Trillion dollars (that wasn’t too long ago). And yet, SpaceX boosted its target IPO valuation above $2 trillion, Bloomberg News reported on Thursday. SpaceX with xAI is projected to generate only between $24 billion and $30 billion in total revenue for 2026. The bulk of that as of early 2026 is made by Starlink. That would suggest a price-to-sales ratio of easily over 64, more than twice Nvidia’s historical peak in 2024. That’s being optimistic. This would also mean SpaceX would be valued above every S&P 500 company except Nvidia, Apple, Alphabet, Microsoft, and Amazon.
Tesla likely to Merge with SpaceX Post IPO
If we assume Tesla will be merged into SpaceX in 2027, that could in theory be a company worth over $3 Trillion. Tesla’s market cap at the time of writing is still over $1 Tr. Then there are the stark ambitions of TeraFab, a mega $20–$25 billion joint venture between Tesla, SpaceX, and xAI, to create a massive, vertically integrated AI chip manufacturing factory.
SpaceX is aiming to raise approximately at least $75 billion in its initial public offering. SpaceX is targeting a June, 2026 IPO data, that will be tough to make that would put them around six months ahead of OpenAI likely in December, 2026 or early 2027. Anthropic is likely to IPO in November, 2026. Even as Elon Musk’s companies struggle to remain competitive, perhaps SpaceX has a role to play as some kind of a future catalyst.
The complexity and feasibility of both TeraFab and orbital datacenters at scale deserve their own deep dives and is way beyond the scope of this article. The magnitude of their vision dwarfs Tesla robotaxis and Optimus robots, neither of which have manifested in a timely fashion thus far.
The enormity of Musk’s projections for TeraFab, Orbital Datacenters, Humanoid robotics and a viable (“self-growing”) Lunar colony and Mars plans are truly from the dreams of which science fiction are made of. He’s not alone, as Blue Origin should IPO next year (2027 or early 2028) soon as well. The speculative nature of Elon Musk’s vision for SpaceX, that was founded in 2002, is not extremely realistic. This is not a startup, this is a 25-year first-mover rocket company that suddenly has a lot of moving parts. The proceeds of the June or later 2026 IPO of SpaceX will presumably fund the following:
Starship & Starlink Scaling
Orbital datacenters
xAI datacenters and compute
TeraFab
Scaling Optimus humanoid robots
A Lunar Colony / Outpost
The eventual colonization of Mars
SpaceX’s Y & Zs 💥
SpaceX’s IPO narrative is making Tesla robotaxis look like a walk in the park. With such lofty goals, SpaceX is surrounding itself with execution risks.
SpaceX IPO Valuation is going get some scrutiny, barely any ARR. A lot of debt, high cash-burn rates.
The valuation compared to Amazon is fairly nonsensical whether the IPO is $1.75 Bn. or more.
To give you a comparison though, Amazon also a $2 Trillion dollar company but made $717 Bn. in 2025, let’s say SpaceX will make $31 Bn. in 2026, that’s 23x less revenue for the same market cap? This while Amazon has AWS, advertising revenue and many other diversified streams including E-commerce, Third-party sellers, Subscriptions, etc… It’s not clear how SpaceX will ever make money as more rocket companies are becoming viable in even the next five years not just Rocket Lab. All of this while xAI burns at least $1 Bn. a month.
I teamed up with Matej Pretković from Croatia, who writes:
Cyclop SpaceTech
A research-driven Newsletter that explores early stage companies, startups, market trends, industry leaders and recent news in the space industry.
Cyclop SpaceTech provides:
In-depth analysis of companies and startups at all stages
Market and technology trend reports
Insights into emerging products and services
Connections to industry experts and thought leaders
Identification of the critical problems space tech must solve next
Matej Pretković is the Founder and CEO of Cyclop Corp, a Zagreb-based consulting and research company supporting the European space economy with independent research and investment facilitation for space-related startups.
The motto of xAI is to “understand the universe”, and we’ll learn a lot more about orbital datacenters in the lead up to this IPO in June or later. Blue and Starcloud have also applied to put a lot of satellites into space, among others.
Can a $75 Billion cash infusion make Tesla great again and turn SpaceX into an orbital compute giant with a terrestrial integrated Fab and enable it to become an energy & robotics leader in the 2030s and 2040s?
TeraFab looks like a fun idea on paper:
“Tesla, SpaceX, and xAI are launching the most epic chip-building effort ever - combining logic, memory and advanced packaging under one roof.” - says the TeraFab project
Elon Musk hopes the SpaceX IPO revenue can help fund orbital datacenters and the very expensive TeraFab projects. The U.S. Government is pushing corporations to make settlements and Fabs on the Moon before China. Presumably they will get funding help to do this.
Solar Arrays in Space ☀️
As global data-center power consumption (the energy for AI Infra) is expected to roughly double to nearly 1,000 terawatt-hours by the end of the decade, according to an estimate by the International Energy Agency, solar arrays in space, on the Moon, around the Moon beaming energy back to earth isn’t as crazy as it sounds. SpaceX might end up being more of an energy company with Tesla’s help than a rocket company as competition heats up. All of this presumably to power the future of AI as well.
SpaceX carries a lot of Debt and Expenses amid a Highly speculative Future 🌊
SpaceX has to carry a lot, X still carries roughly $12 billion in acquisition debt while making 35% less revenue as compared to 2022. TeraFab as a future project makes even less sense than most of Elon Musk’s projects. It was announced on March 21, 2026. A Full-stack Fab for orbital compute? The project is designed to bring every stage of chip manufacturing—design, lithography, fabrication, memory production, advanced packaging, and testing—under one roof to enable "recursive loops" of rapid iteration.
What would a SpaceX led lunar colony look like? If Elon Musk becomes Earth’s first Trillionaire I’m guessing he’ll want his space legacy to flourish. But what will be the price tag? Meanwhile xAI is being rebuilt in a massive pivot of its own. Tesla’s sales declined 14.3% from the previous quarter with deliveries only improving 6% from a year ago when the backlash for his politics had hit. Just two models, 3 and Y accounted for 97% of the company’s deliveries last year. From Optimus robots to a space-age full-stack Chips Fab, it always seems Elon Musk is starting over. The proceeds from the IPO will at least help with the mounting debt. But the specs look disorientating.
TeraFab is targeting 1 terawatt ($10^{12}$ watts) of total annual AI compute capacity. Targeting a node level of the 2-nanometer (2nm) process. A prototype facility is currently being built at Giga Texas in Austin, with a larger-scale facility planned for a yet-to-be-determined location. They ain’t no TSMC.
📚 Cyclop SpaceTech Articles:
If you enjoy speculating on the future of space and technology, check out some of the articles of the guest contributor:
The Rise of Data Centers in Space: Solving Earth’s Growing Digital Demand
Top 5 Emerging SpaceTech Trends to Watch in 2026
SpaceTech Stock Performance: Public Equities and Top Subsector Winners
Elon Musk’s SpaceX: The Triple Engine Behind Success
The 2026 Space Investment Landscape: Key Capital Shifts
What sectors of Space-Tech will be the most profitable for investors? How much will Aerospace companies of the future intersect with national defense?
Top Space-Tech Areas to Invest?
Analysts project the global space market will grow from approximately $630 billion in 2023 to over $1.1 trillion by 2030. With capital also coming from higher National Defense budgets Space-tech seems poised to have considerable geopolitical implications in the future of technology.
Space-Tech as the intersection of National Defense
"The Golden Dome" & Hypersonic Defense
Proliferated Warfighter Space Architecture (PWSA)
In-Space Infrastructure & Servicing
Satellite Data & AI-Driven Analytics
Satellite Communications
Lunar Economy & Deep Space Logistics
Aerospace National Defense: Tactically Responsive Space (TacRS)
Become a Paying Subscriber to Cyclop SpaceTech
If you consider thinking about this important, consider going deeper with the contributing writer’s expertise. Learn more about what to expect.
How Bullish are you on SpaceX’s Futuristic Ambitions? ⏳
Guys we still have the deep dive to get into:
SpaceX’s AI Endgame: Owning the Infrastructure Layer of Intelligence
By Matej Pretković, March, 2026.
The strategy is simple: don’t just join the AI race - own the infrastructure behind it.
1. SpaceX is becoming the infrastructure powerhouse of the 21st century
SpaceX is “quietly” becoming the defining infrastructure layer of the 21st century, as critical to the coming decade as fiber cables were to the 1990s internet boom.
In the past four months alone, the company completed the largest private merger in history, filed to launch one million orbital data center satellites, pivoted from Mars to the Moon in response to a $185 billion government defense program and confirmed an IPO targeting mid-2026 at a potential $1.5 trillion valuation.
SpaceX is not a company that AI is happening to. It is a company actively positioning itself as the physical stack on which the next phase of AI gets built.
The xAI merger, the orbital data center FCC filing and the Starlink global connectivity network are not separate bets. They are three parts of the same thesis.
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