NVIDIA shares rose 0.5% in premarket trading on Friday, but the stock is still down 9.1% over the past month as worries about stronger competition in AI chips continue. The upcoming SpaceX IPO could be a positive development. If the IPO does well, it may support one of Nvidia’s biggest long-term growth stories. Here’s how SpaceX’s success could impact Nvidia’s business, and why orbital data centers, though still speculative, offer real potential.
SpaceX is already a major Nvidia customer through its xAI unit, and their partnership goes beyond just buying chips. Last week, SpaceX signed a cloud service deal with Google, where Google is paying $920 million each month to use about 110,000 Nvidia GPUs. Anthropic also pays $1.5 billion per month to access 325,000 Nvidia GPUs. These deals show that SpaceX’s infrastructure is now an important way for Nvidia to distribute its hardware on Earth, separate from any plans for space.
Looking further ahead, there is potential in orbital data centers. SpaceX has asked the FCC for approval to build a network of data centers in orbit that could one day include up to one million satellites. Global X’s director of thematic research says this idea is still highly speculative. Whether it makes financial sense depends a lot on launch costs. According to Google’s Project Suncatcher, orbital computing could become more affordable if the cost to launch to low Earth orbit drops below about $200 per kilogram by the mid-2030s, compared to around $1,500 per kilogram now.
NVIDIA has been cautious but is becoming more involved in space computing. CEO Jensen Huang has pointed out real challenges, like how to cool equipment in the vacuum of space, when asked about Elon Musk’s plans for space data centers. Still, in March, Nvidia introduced a computing module made for space missions and possible orbital data centers. Huang described space computing as a new frontier where intelligence needs to go wherever the data is.
If SpaceX’s IPO is successful, it would show that investors are interested in the kind of long-term, infrastructure-heavy projects that support Nvidia’s involvement in space-based computing, even though orbital data centers are still years from being commercially viable.
