SpaceX is constructing a 1.2 gigawatt gas-fired power generation plant dedicated to xAI data center operations.

SpaceX plans to retire unpermitted turbines at its recently acquired xAI data centers and develop a 1.2 gigawatt natural gas power plant to support the operation. The company has committed to purchasing US$2.8 billion worth of gas turbines over three years, with unpermitted equipment to be removed by July 2027.

The move reflects SpaceX's effort to expand into artificial intelligence and data infrastructure alongside its core space and launch operations. The 1.2 gigawatt facility signals the scale of power required for high-density compute operations at xAI, suggesting SpaceX intends to operate the data centers at significant scale. This infrastructure could support data processing for Starlink, orbital AI projects, government contracts, and competitive positioning alongside players such as Alphabet, Amazon, and Microsoft.

For investors, the shift ties SpaceX's equity story more directly to energy infrastructure and data center economics. The US$2.8 billion turbine purchase commitment represents a substantial capital program layered atop existing rocket and satellite programs. However, SpaceX has less than one year of cash runway, raising questions about funding pressure if capital spending outpaces cash inflows.

The phased regulatory cleanup—retaining unpermitted turbines through July 2027 while building out capacity—keeps permitting risk in focus during the xAI infrastructure buildout. The company's recent performance, with revenue growth of 27.3% over the past year and forecasted earnings growth of 59.81% annually, may support investment in these data center and power assets if growth is sustained.

Key points for investors to monitor include the sequencing of capital spending on the 1.2 gigawatt plant, whether turbine purchases remain aligned with the US$2.8 billion outline, and the pace of permit regularization at xAI sites. Disclosures linking xAI compute capacity to Starlink, government contracts, or future orbital AI projects will clarify how central data centers and power infrastructure are to SpaceX's long-term business strategy.