Confronting the industry-wide challenge of electricity shortages for AI data centers, Elon Musk is applying his signature vertical integration strategy, aiming to break through the bottleneck at its most fragile point in the supply chain.
According to a report from The Information on August 30, SpaceX is establishing a foundry in Bastrop, Texas, dedicated to producing large-scale gas turbine blades and vanes. These components represent the most technically challenging and scarce parts within the global turbine supply chain.
Following the report, Musk confirmed the plan on social media platform X, stating that by casting blades and vanes in-house, SpaceX can bring gas turbines online up to 18 months sooner, calling it "a profound game changer."
Musk also noted that SpaceX and Tesla Motors are each working rapidly to build 100GW of solar power capacity annually, but emphasized that "natural gas will be a necessary supplement to and guide for solar power for years to come."
Adding weight to the report, Morgan Stanley analyst Adam Jonas highlighted that the foundry will also cater to the casting needs of SpaceX's Raptor rocket engine turbopumps, allowing for shared costs between the aerospace and AI ventures.
The Hidden Constraint On Global AI Expansion
The report explains that gas turbine blades and vanes must operate in extreme temperatures ranging from 3,000 to 3,600 degrees Fahrenheit (approximately 1,650 to 1,980 degrees Celsius), which is about 800 degrees Fahrenheit above the melting point of the materials themselves, making the casting process exceptionally demanding.
Currently, only four foundries globally possess this technology, creating a highly monopolistic landscape. This oligopoly has led major turbine manufacturers like GE Vernova to see their order books filled through 2030, posing a significant obstacle to accelerating AI infrastructure development.
In a podcast earlier this year, Musk referred to blades and vanes as the "limiting factor" for faster turbine delivery, warning that with current production capacity, he is uncertain there will be enough available electricity to power all the AI chips being manufactured.
From Satellite Factory To Turbine Casting Hub
SpaceX has already established multiple industrial operations in Bastrop, located about 30 miles from Austin, including a facility related to its Starlink satellite business.
According to Corey Trinetti, a due diligence expert at AI infrastructure research publication Measured AI, SpaceX purchased approximately 830 acres of surrounding land between March and June. Satellite imagery reveals two new buildings adjacent to the Starlink plant appeared in July, a location that was empty just a year prior.
In terms of hiring, SpaceX has recently posted several positions, including a senior operations engineer, senior materials engineer, automation engineer, and senior tooling engineer for the foundry's construction and ramp-up. They are also seeking a programmer for high-temperature superalloy milling on a new "industrial gas turbine (IGT) blade and vane manufacturing line" in Bastrop.
However, Trinetti noted that no permits or construction filings for the foundry have yet been found in Texas environmental or building records, leaving it unclear whether SpaceX has initiated the approval process.
Dual-Purpose Economics: Sharing Costs Between Space And AI
Morgan Stanley's Adam Jonas indicated in a recent report that SpaceX's turbine component foundry in Texas will serve both data center demand and the production of Raptor rocket engine turbopump castings.
Jonas explained that Raptor turbopump castings and data center turbine airfoils use the same alloys, furnaces, and skilled labor. A single foundry can spread fixed costs across both the aerospace and AI businesses.
This dual-purpose logic significantly enhances the foundry's commercial viability, though observers remain cautious about whether SpaceX can truly replicate the casting expertise that industry leaders like Precision Castparts have accumulated over decades.
Bridging The Gap: Acquisitions And Partnerships For Interim Power
Before its in-house casting capacity comes online, Musk is pursuing multiple avenues to secure gigawatt-scale transitional power. The Information reports that Musk has been quietly working with Wall Street hedge fund Fortress Investment Group, which has invested in at least two turbine suppliers.
According to a Federal Trade Commission filing from May, Fortress has sold mobile industrial turbine supplier APR Energy to Musk personally. APR Energy stated in January that its fleet comprised about 1GW of turbines, meaning these assets are now accessible to Musk.
Additionally, SpaceX may be sourcing turbines from FTAI Aviation, a company specializing in the modification and refurbishment of commercial aircraft engines. FTAI, spun off from another Fortress-owned company, announced a $1.465 billion turbine sales contract through its Chinese joint venture partner in July, with the buyer identified as "a leading international cloud service provider." Adam Jonas has listed FTAI as a potential supplier to SpaceX.
Morgan Stanley estimates that Musk could secure approximately 3 to 4GW of power by the end of 2027 through a series of procurement agreements.
Carbon Emission Concerns And Industry Divisions
The report also acknowledges that Musk's efforts to unlock additional fossil fuel power generation capacity have raised concerns among low-carbon energy advocates.
BloombergNEF estimates that if all planned off-grid natural gas projects for data centers were to materialize, U.S. carbon dioxide emissions could increase by 20%. This figure does not yet account for Musk's latest plans, but already includes a 2GW off-grid natural gas installation for SpaceX's xAI division's data center in the Memphis, Tennessee area, expected to be operational by year-end.
Opinions are sharply divided on whether Musk can truly realize this ambitious vision. Dylan Patel, founder of semiconductor research firm SemiAnalysis, expressed confidence in Musk's ability. In contrast, Jigar Shah, a clean energy entrepreneur who previously led the Biden administration's energy loan office, countered directly: "That's because you have no idea how to build infrastructure."
Musk previously stunned the industry with the rapid completion of the Memphis Colossus data center, despite its facilities not being top-tier. SpaceX is now generating substantial revenue by leasing the facility to Anthropic. Observers are closely watching whether this latest gamble on the power front can replicate that same speed of execution.
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