SemiAnalysis thinks Elon’s aim to build and deliver “conservatively” an incremental 6-8GW in 2027 alone with potential for 10+GW is plenty feasible:
Elon Musk shocked the world, once again, when he announced on SpaceX’s first earnings his Gigawatt ambitions for next year. He “conservatively” aims to build & deliver an incremental 6-8GW in 2027 alone, with potential for that number to be well above +10GW. At 50B per GW, that’s $300-500B in capex in 2027, on par with what we expect from AWS and Google – an unbelievable number for a company significantly less profitable than rival hyperscalers.
Yet, we believe that the number is real. We see SpaceX on track to build about 10GW by year-end 2027. We’ve evaluated all sites suitable for SpaceX and provided the list to our Datacenter Model subscribers. Our Energy Model subscribers also have the precise list of gas generation equipment available, quarter by quarter, by 30+ turbine, engine, fuel cell suppliers. We provided much of this data, before the market woke up to it.
SpaceX will develop anything they can and bring it online as fast as possible. As explained in our Meta Compute deep dive, large-scale + near-term compute is a remarkably scarce combination, and it’s priced at a huge premium – up to $50B/GW/year. However, AI labs can handle it and make a good living off it.
Our Tokenomics Model and our Inference Simulator demonstrate that at realistic performance levels (e.g. tokens/sec per GPU), both OpenAI and Anthropic can generate over $100B/GW/year of revenue when selling API inference on a GB300 cluster. This is significantly more than the costs of renting a GB300 cluster for a year at current neocloud prices.
Serving inference tokens is unbelievably profitable for the frontier model companies.
… Beyond OpenAI and Anthropic, there is actually a third company in the world capable of printing such economics per GW: Microsoft. Having full access to OpenAI models, they can generate the exact same revenue and margin per MW, while paying none of the training costs. Satya nailed the negotiations with OpenAI: the deal reworked in April 2026 dropped the old 20% revenue share from the equation. Put simply, Microsoft has a giant incentive to procure as many MWs as possible, as fast as possible. While much of their datacenter capacity currently goes to OpenAI at ~14M/MW/year, they have the opportunity to improve that mix. The potential impact is Microsoft Azure accelerating revenue growth from ~42% to over 100% by next year. A once-in-a-generation opportunity, that SpaceX is incredibly well positioned to serve.
While Microsoft signing 3GW with SpaceX for 50B/GW/year sounds insane, we view it as realistic for two reasons:
1/ Microsoft is already preparing for an epic datacenter ramp. As discussed below, they’ve signed 10GW of contracts year-to-date, for over $300B of total contract value. We expect much more to be signed. Caveat: these contracts contribute to late 2027 and 2028 capacity. There is a near-term gap to fill.
2/ With a 90-day cancellation policy, akin to the SpaceX deals with Anthropic and Google, there is zero balance sheet risk. This is remarkably easy for Amy Hood to sign off, given the revenue opportunity.
For SpaceX, the next natural question is financing. How can Elon afford to pay so much CapEx without the balance sheet of the leading hyperscalers? We expect a combination of the two following items:
1/ Support from Nvidia, in the form of vendor financing to lower the upfront cash cost. This is likely why Elon declared to be Nvidia exclusive on the earnings call! As our Accelerator Model has repeatedly explained, xAI/SpaceX have actively evaluated alternatives like TPU and AMD – so the financial argument likely made them abandon these and focus on Nvidia.
2/ Industry-high pricing, enabled by fastest timelines: SpaceX will continue to sell large-scale compute with 3-5 months lead time, an unbeatable offering, and price it accordingly at 30-50M/MW/year. That pays back the capex in less than a year. We dived into this in our Meta Compute article.
The implications of this are a path to $300B of ARR by the end of 2027 for SpaceX. This assumes only 50% of their 2027 incremental compute is monetized, the reminder being for the Grok & Cursor teams for training (no inference revenue modelled).
… In our Meta Compute article, we explained in depth why Elon has proven, yet again, to be a commercial genius. He understands that AI lab margins have dramatically surged, and accordingly introduced a “value-based pricing” for his GPU clusters, as opposed to the more common “cost plus”.
To keep the machine going, Elon needs to build datacenters faster than anyone else. We believe that he can. What gives us this confidence? We’ve written a few times about Elon’s speed, with 122 days to build Colossus 1’s 300MW, six months to build 200MW at Colossus 2, the decision to build an onsite generation plant 1km across the border to avoid permitting, and much more.
There’s been even more displays of speed since then. The power plant in Southaven has expanded from 27 turbines (~495MW) in February 2026, to 69 turbines (>1.2GW) in July 2026. As well as the arrival of “MiniHard,” which upon vertical construction in March 2026, will likely reach 450-500MW in just ~5 months! That leaves more than enough time to build many such shells by 2027. It also was his first true greenfield, so he can probably do better for the next. Another option is, of course, to retrofit. Colossus 1 and 2 have been built remarkably fast through retrofits, as explained in our xAI deep dive last year.
Building 10+GW in a year will be a different story. SpaceX will need to scout all over the country to find suitable land, with easy permitting and access to gas. We however believe that there are more than enough options to support a material ramp-up. This will, naturally, extensively rely on onsite gas generation – check our energy deep dives here to understand how it works and why it’s necessary.
(To be clear the 10+GW isn’t in space. SemiAnalysis thinks that’s feasible too, but not pre-2028; that said they’re surprisingly much more conservative than Forethought in that SA’s optimistic scenario only gets space to near-parity with terrestrial datacenters whereas Forethought’s median scenario already has space winning.)
SemiAnalysis thinks Elon’s aim to build and deliver “conservatively” an incremental 6-8GW in 2027 alone with potential for 10+GW is plenty feasible:
(To be clear the 10+GW isn’t in space. SemiAnalysis thinks that’s feasible too, but not pre-2028; that said they’re surprisingly much more conservative than Forethought in that SA’s optimistic scenario only gets space to near-parity with terrestrial datacenters whereas Forethought’s median scenario already has space winning.)