NVIDIA and SpaceX form a "match made in heaven"! Rubin's computing power is heading into space orbit, while Musk anchors SpaceX's valuation to a Type II Kardashev civilization.

Just as NVIDIA Corporation (NVDA.US), the "superpower" of AI chips, announced a continued rise in global AI capital expenditure expectations alongside a strong earnings report indicative of a new bullish cycle in the AI computing industry chain, Elon Musk is trying to push the boundaries of AI infrastructure expansion from the ground into orbit. His company, SpaceX (SPCX.US), plans to launch its first AI data center satellites powered by NVIDIA Corporation's next-generation computing clusterthe Vera Rubin architecture AI GPU-dominated clustersin the fourth quarter of 2027, aiming for "significant scale" by 2028. This does not imply a swift replacement of ground-based data centers but rather bets that orbital computing can circumvent major bottlenecks like terrestrial power grids, land, and water resources, becoming a new layer of AI computing supply. For NVIDIA Corporation, this signifies an extension of the Vera Rubin potential market from "ground-based AI factories" to "orbital AI factories"; for SpaceX, it integrates Starship launches, orbital energy, satellite networks, and AI cloud computing into a vertically integrated platform. However, financial institutions like Evercore expect substantial revenue data to emerge no earlier than the 2029 fiscal year, with thermal management, radiation, collision, and regulation being key constraints determining its commercialization feasibility. NVIDIA Corporation and SpaceX forge a "marriage made in heaven," planning to send Vera Rubin into orbit. In a parallel universe, NVIDIA Corporation CEO Jensen Huang and the "Mr. Everything" and worlds richest man Elon Musk could be seen as a team of cosmic superheroes. Yet, in this universe, they are still contemplating the seemingly incredible vision of space-based AIa collaboration where NVIDIA Corporation provides computing cores while SpaceX delivers launch and orbital infrastructure, pushing the physical boundaries of AI computation. The Vera Rubin and Starship together form a closed-loop system of space hardware and infrastructure, although current valuations mainly reflect long-term options rather than immediate cash flows. This project is part of NVIDIA Corporations increasingly close collaboration with SpaceX. During NVIDIA Corporations earnings call on August 26, Chief Financial Officer Colette Kress stated that the Vera Rubin system has been fully deployed, with core clients including AI cloud computing and computing lease leaders Oracle Corporation (ORCL.US), Amazon.com, Inc. (AMZN.US) AWS, and SpaceX (SPCX.US). We believe NVIDIA Corporation clearly lists SpaceX AI as one of its principal partners, further underscoring the depth of their relationship and confirming SpaceX AI is among the earliest Vera Rubin customers, stated an analyst team from Evercore ISI in an investor report. This relationship is also reciprocal: NVIDIA Corporation disclosed it holds 122.8 million shares of SpaceX stock, making NVIDIA Corporation both an important supplier to SpaceX and a significant shareholder. NVIDIA Corporations latest earnings report shows a revenue of $96.22 billion for the second quarter of fiscal year 2027, a year-on-year increase of 106%; data center revenue was $89 billion, up 117%; adjusted earnings per share stood at $2.22. The company expects third-quarter revenues to be around $108 billion, with a fluctuation of 2%, and unusually forecasts a revenue growth of about 70% for the fiscal year 2028, far exceeding Wall Street's previous expectation of 44%. NVIDIA Corporations management indicated during the earnings meeting that the full deployment and delivery of Vera Rubin largely imply that NVIDIA Corporation's growth constraints mainly come from memory capacity and the advanced process manufacturing capacity bottlenecks at Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR, rather than insufficient orders. After NVIDIA Corporation released its earnings, Wall Street raised its target prices; as of last Friday, NVIDIA Corporation's stock closed at $217.55. Citigroup raised its target price from $300 to $315, maintaining a "buy" rating; Goldman Sachs Group, Inc. increased its target price from $285 to $300, and Morgan Stanley raised its target price from $288 to $300. Their consensus bullish outlook is based on the ongoing strong demand for AI computing power, the ramp-up of Vera Rubin, and the continued strengthening of NVIDIA Corporation's comprehensive hardware and software platform advantages. Musk stated that the data centers designed by SpaceX will run entirely on NVIDIA Corporations AI GPU accelerators. Additionally, SpaceX completed the acquisition of Cursor in August through an all-stock transaction valued at approximately $60 billion. Huang recently stated in a PPT presentation that Cursor is now used across NVIDIA Corporation. The latest third-party statistics show that the annual revenue run rate for this AI programming assistant has surpassed $1 billion. Regarding the commercialization potential of the space-based AI data centers that Musk and Huang are focusing on, Evercore predicts that this project will not yield any substantial contributions to SpaceX until at least the 2029 fiscal year. Notably, we have not factored in any orbital computing revenue data for 2026 or 2027, and we expect the first 1-gigawatt space AI orbital computing capacity to be operational in FY 2029; by the end of that fiscal year, orbital computing capacity is projected to reach 8 gigawatts, while ground computing capacity will be 10 gigawatts, Evercore stated. If orbital construction originally planned for FY 2029 were to advance to 2028, it would significantly unleash demand for AI computing resources at the inference end; if using Musk's discussed economic calculation of $30 to $50 per watt, this could considerably upwardly revise our forecasts. Evercore assigns SpaceX a " outperform" rating with a target price set at $230. As of Friday's market close, SpaceX's stock was at $141.50. The key question is what Musk's so-called 'significant scale' in 2028 truly meansit could indicate the scale of computing power capable of generating revenue data or refer to a broader technological validation phase prior to commercialization, Evercore added. However, according to a recent report published by the Brookings Institution, there are significant technological obstacles to deploying data centers in space. Ground data centers use both air cooling and server liquid cooling systems to dissipate heat through conduction and convection, stated the Washington, D.C.-based think tank. They first transfer heat from the chips to the liquid coolant, then transfer the heat from the coolant to the surrounding atmosphere. This cooling strategy is nearly impossible to implement for data centers floating in a vacuum environment in space, as there is no atmospheric layer to absorb heat. In fact, thermal radiation may be the only way to dissipate the heat generated by orbital data centers, but some scientists estimate that to adequately expel the heat produced by a single orbital data center using this method would require an astonishing 2.15 million square feet of heat dissipation area, the Brookings Institution noted in its report. Other issues include damage to equipment from continuous exposure to intense solar ultraviolet radiation and an increased probability of orbital collisions as the number of satellites increases. Regulatory approvals may also pose a problem. AI data centers entering a new dimension? AI super factories gearing up to transition from ground to orbit. SpaceX's prospectus clearly defines the construction of a continuously expanding space civilization, ultimately progressing towards a Type II civilization that can harness the full energy of the sun as a long-term paradigm shift; Musk himself has stated that lunar satellite factories, mass drivers, and over 100 terawatts of AI hardware deployment annually will push humanity toward non-trivial progress to Type II civilization. Thus, the orbital AI data center is not an isolated project but the first layer of infrastructure connecting earth-constrained computingsolar system-level energymulti-planet civilization. The so-called Kardashev Type II civilization can harness the full energy of its star, while Type III can command the energy of an entire galaxy, far exceeding SpaceX's current narrative. The $28.5 trillion Total Addressable Market (TAM) claimed by SpaceX further capitalizes on this civilization vision: of which traditional space business is only $370 billion, the Starlink-dominated high-speed connectivity business amounts to $1.6 trillion, while the market size for AI integration business is as high as $26.5 trillion, approximately 93% of the total size, including $2.4 trillion in AI integrated computing infrastructure, $760 billion in consumer subscriptions, $600 billion in digital advertising, and $22.7 trillion in enterprise applications. The underlying judgment of Musk and the top management of SpaceX is that by 2030, global data center computing power demand could reach 235 gigawatts, with 70% used for AI, while the earth's power grid, land, permitting, and environmental capacity may not support terawatt-level expansion; the sun accounts for about 99.8% of the energy in the solar system. SpaceX thus plans to commercialize modular orbital computing starting at the end of this decade, with a long-term goal of deploying 100 gigawatts of AI computing capacity annually in orbitif operating continuously throughout the year, this energy consumption would roughly equate to one-fifth of the total electricity generated in the U.S. for the entire year of 2025. However, from an investment perspective, the $28.5 trillion is a theoretical market boundary, far from a revenue or profit forecast; orbital AI is essentially a long-term, highly convex technology option. Achieving an annual deployment of 100 gigawatts would require hundreds of Starship launches each year, sending approximately 1 million tons of equipment into orbit, and addressing issues like radiation thermal management, irreparability of chips after failure, satellite mass manufacturing, and regulatory challenges. Meanwhile, SpaceX's AI business expects capital expenditures to reach $12.727 billion with an adjusted EBITDA loss of $1.237 billion in 2025, and further capital expenditures of $7.723 billion with an adjusted EBITDA loss of $609 million in the first quarter of 2026; the company acknowledges that achieving ongoing profitability requires years of investment cycles. Therefore, current valuations should be supported by cash flows from launches and Starlink, while orbital AI contributes long-term upward elasticity; what investors genuinely need to track are the unit launch costs of the Starship, launch frequencies, cost per ton of computing power, thermal reliability, and computing utilization rates, rather than directly endorsing the current valuation with the $28.5 trillion figure.