SpaceX is constructing a foundry in Bastrop, Texas, to cast blades and vanes for industrial gas turbines. The move aims to circumvent supply chain bottlenecks that are delaying the deployment of power infrastructure critical for artificial intelligence data centers.

Elon Musk confirmed on X that SpaceX is bringing the casting process in-house. He stated this vertical integration could accelerate the commissioning of natural-gas turbines by up to 18 months. The facility addresses a specific constraint in the manufacturing of components required for high-capacity energy generation. Musk noted that natural gas will still be needed to "supplement and bootstrap solar for several years," calling the result a "profound game-changer."

GE Vernova Supply Chain Pressure

GE Vernova Inc. (NYSE: GEV) has highlighted similar supply chain limitations. CEO Scott Strazik noted that the company has pressured suppliers to expand capacity to meet rising turbine demand. In summer 2024, GE Vernova instructed suppliers to increase output, providing capital for new furnaces in some instances.

GE Vernova is aiming to raise annual turbine production from approximately 20 gigawatts this year to 30 GW by the end of the decade. Strazik indicated that reaching 24 GW of annual output by 2028 depends on securing additional castings and forgings by 2027. Only a handful of companies can produce these highly specialized blades, which operate at temperatures of roughly 3,000 to 3,600 degrees Fahrenheit, requiring sophisticated casting techniques that are difficult to replicate quickly.

AI Power Demand Drivers

SpaceX has committed more than $2.8 billion to gas turbines over three years to support its Colossus data centers near Memphis. Manufacturing blades and vanes internally pushes the company further upstream into the supply chain segment that currently restricts delivery speeds. This effort connects to broader ambitions, including the development of Terafab, an ambitious semiconductor manufacturing project in Texas.

The broader context involves intensifying competition for power resources. Data Center Map lists 4,767 U.S. data centers. Kalshi traders assign a 66% probability that this number will reach at least 5,300 by year-end. This implies hundreds of additional facilities will compete for electricity capacity in the coming months. GE Vernova’s turbine business has seen orders extending into 2030.

What the Numbers Show

The divergence between GE Vernova’s production targets and its dependency on external casting capacity highlights a structural constraint in the industrial gas turbine sector. While GE Vernova plans to scale production by 50% over the decade (from 20 GW to 30 GW), its ability to hit the intermediate 24 GW target in 2028 is explicitly tied to supplier capacity expansions scheduled for 2027. SpaceX’s entry into component manufacturing suggests that hyperscalers may increasingly bypass traditional OEM supply chains to secure power infrastructure timelines. SpaceX is applying a philosophy of controlling physical systems around compute, from manufacturing to power, rather than simply buying hardware or leasing capacity.

ARK Invest Chief Futurist Brett Winton stated that SpaceX’s proposed $100 billion Starbase facility in Louisiana is "massively overbuilt" for connectivity services alone, signaling a strategic pivot toward large-scale artificial intelligence infrastructure.

The investment firm highlighted that the site’s capacity is designed to support an AI satellite constellation far exceeding current market models, positioning SpaceX to capture a significantly larger share of the emerging space-based computing market.

Starbase Infrastructure Scale

According to an investor note released on Monday, the Starbase project spans roughly 125,000 acres at Pecan Island in Vermilion Parish. The facility will feature five complexes, each equipped with two Starship towers.

Winton noted that operations will begin with ten launch pads and eventually expand to over a dozen towers. This infrastructure aims to support around 30 flights per day. The site will include on-site propellant production, power generation, deep-water shipping, vehicle processing, employee housing, and likely an airport.

SpaceX President Gwynne Shotwell indicated that current capacity cannot accommodate Starship’s intended launch cadence, necessitating this expansion.

AI Connectivity Economics

ARK Invest anticipates the capacity will serve payloads worth trillions of dollars annually. This includes billions for Starlink and trillions for the Starmind AI constellation.

Winton estimated that a single reusable Starlink-loaded Starship flight could generate about $4 billion in lifetime net cash flow. This stands against $1 billion in combined launch, satellite manufacturing, ground station, and acquisition costs.

Cost Advantage in AI Satellites

Winton expanded on these figures via X, noting that SpaceX is targeting a larger connectivity opportunity than ARK currently models. SpaceX claims a $1.6 trillion opportunity, while ARK estimates the range at $600 billion over the decade.

"Starbase Louisiana is massively overbuilt for just serving connectivity," Winton said. "The reason to build so big: the AI opportunity can compound at much larger scale."

ARK projects that terrestrial data center costs per Gigawatt will move north of $60 billion per GW in 2029 and cross $76 billion in 2032. In contrast, SpaceX’s AI satellites could weigh 2,000 kg each. Citing Starlink’s per-satellite cost of $1,000/kg, Winton noted that launch costs could fall south of $100 per kg if Starship becomes reusable.

This efficiency could translate to SpaceX launching satellites for $38 billion per GW. After the 100th launch of its AI satellites, ARK believes costs will optimize down to $32 billion per GW as manufacturing efficiency improves and weight is stripped from satellites.

What the Numbers Show

The data reveals a stark divergence between terrestrial and orbital infrastructure costs. While terrestrial data center costs are projected to rise above $76 billion per GW by 2032, SpaceX aims to reduce orbital deployment costs to $32 billion per GW through reuse and manufacturing scale. This suggests a potential cost advantage of more than 50% for space-based AI compute compared to ground-based alternatives, assuming the projected launch cadence and reusability targets are met.

SPCX shares fell 0.91% to $143.29 during pre-market trading on Tuesday.