SpaceX xAI data centres gas turbines IPO

SpaceX Is Burning $2.8 Billion on Gas Turbines While Regulators Circle Its AI Data Centres

23 May 2026

SpaceX has committed over $2.8 billion to purchase gas turbines to power AI data centers for its xAI unit, which operates the Colossus 1 and Colossus 2 facilities in Tennessee and Mississippi. The investment comes despite public backlash, a lawsuit, and regulatory scrutiny over environmental concerns, including allegations that the company operated turbines without proper air permits. The disclosures emerged from SpaceX's IPO prospectus, as the company prepares to list on the Nasdaq stock exchange in the coming weeks.

SpaceX has committed over $2.8 billion to purchasing gas turbines to power its AI data centres, according to a regulatory filing published Wednesday. That's a lot of money to spend on kit that's attracted lawsuits, complaints from community groups, and questions from regulators about air quality.

The turbines are feeding power to xAI's Colossus facilities in Memphis, Tennessee and Southaven, Mississippi, where Musk's AI unit develops Grok. With US grid capacity struggling to keep pace with the data centre boom, portable gas turbines have become a fashionable stopgap: you can spin them up fast, they don't require grid connection, and crucially, under current rules, you can run them for up to a year without a clean air permit. SpaceX has made full use of that loophole.

The NAACP and other groups filed suit against xAI earlier this year, claiming the company had been running 27 turbines without proper permits. Since then, the site has added more. WIRED reported last week that Colossus 2 now has 46 portable units, with 19 added over just two months. Nothing says "we're taking the criticism seriously" like doubling down.

The spending came in two tranches. A March agreement locked in $805 million worth of turbines from an unnamed supplier through 2029. Then in late April, SpaceX signed a further $2 billion deal for mobile turbines and related equipment, also with an unnamed vendor, which is still pending completion.

All of this is disclosed in SpaceX's IPO prospectus, the document the company filed ahead of its planned Nasdaq listing in the coming weeks. The prospectus paints a picture of a company expanding fast and spending accordingly. As of March, the two Colossus data centres had enough servers to consume roughly 1 gigawatt of power, comparable to a large American city's electricity demand. SpaceX has over $14 billion in construction in progress, including data centre equipment not yet switched on.

To offset some of the costs, SpaceX is leasing server capacity at Colossus to Anthropic for $15 billion annually. Musk said Wednesday that further leasing deals are in the pipeline.

The IPO prospectus is, of course, designed to reassure investors. Whether regulators are equally reassured by the turbine strategy is another matter entirely.