SpaceX's AI Cloud Business Is Taking Off, Says Deutsche Bank

By Bloomberg Technology

Categories: Startup, VC, AI

Summary

SpaceX's cloud computing business could hit $60B in annualized revenue by year-end 2024, driven by $6.7B in newly contracted deals—positioning the company on track for a $100B+ revenue run rate largely from leasing GPU compute capacity to enterprises like Google and Anthropic.

Key Takeaways

  1. SpaceX contracted $6.7B in cloud services revenue in Q3 alone, with deployment beginning October 2024. The cloud business (leasing compute capacity) represents the primary revenue driver toward the $100B+ annualized run rate target.
  2. Revenue forecasting framework: $20-40B from core cloud compute leasing + $5B+ from Grok/X advertising + $35-40B from other space/connectivity segments = ~$100B run rate. This multi-segment approach validates the bull case without requiring $1T by 2030.
  3. Orbital data center scaling is the real test, not prototype deployment. SpaceX's success depends on reducing solar and radiator costs while achieving gigawatt-level operations—a harder engineering problem than initial launches.
  4. Starship reusability targets 15-20 flights in 2025 at 50-60 satellites per launch, supporting plans to deploy 1,000 Starlink Gen 3 satellites. This cadence is tracking Deutsche Bank's operational expectations despite heat shield and second-stage catch challenges.
  5. Stock valuation doesn't require hitting Elon's $1T/2030 target. Deutsche Bank models ~$350B revenue by 2030—roughly one-third of the bull case—and believes this alone justifies current stock valuations and price targets.

Related topics

Transcript Excerpt

It is the business of cloud services. Leasing. Renting. Compute capacity uh to third parties. Google anthropic. That seems to have the most momentum right now. Yeah, yeah. And you probably noticed they they announced another deal, right? Uh, another customer undisclosed. Um, in the beginning of three. So, so the cloud business, by our estimates. Right. It probably can end December probably running at a 40 plus billion dollar runway, which is obviously much higher than now and generating the bulk of revenue. So we actually feel very good about that trajectory, um, going into the year end. Uh, let's get to what you just mentioned, which is there was a disclosure of the cloud business, uh, in the current period. Let's listen to CFO Brett Johnson. In the first few weeks of the third quarter, w…

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