SpaceX warns AI space data centers may not be commercially viable in pre-IPO filing

Exclusive: SpaceX says unproven AI space data centers may not be commercially viable, filing shows

NEW YORK, April 21 (Reuters) - SpaceX warned investors that its ambitions to build space-based artificial intelligence data centers, as well as human settlements on the moon and Mars, rely on unproven technologies and may not become commercially viable, according to a company filing. The business risks laid out in SpaceX's pre-IPO filing, which have not been previously reported, present a far more cautious assessment of the rocket maker's future than the vision laid out publicly by billionaire CEO Elon Musk in recent weeks, as the company gears up for what could be ⁠the largest initial public offering in history. Risk factors in a prospectus are required by U.S. securities law and are designed to inform investors of potential pitfalls while also shielding companies from future legal liability. "Our initiatives to develop orbital AI compute and in-orbit, lunar, and interplanetary industrialization are in early stages, involve significant technical complexity and unproven technologies, and may not achieve commercial viability," SpaceX said in an excerpt from the S-1 filing, which was seen by Reuters. Any future AI orbital data centers will operate "in the harsh and unpredictable environment of space, exposing them to a wide and unique range of space-related risks that could cause them to malfunction or fail," the document said. MUSK SAYS AI IN SPACE IS A 'NO-BRAINER' Companies use the S-1 ⁠registration document to disclose their finances and risks before going public. SpaceX is targeting a listing in the coming months at a valuation of roughly $1.75 trillion with a $75 billion raise, which would make it the largest initial public offering in history. Musk said at the World Economic Forum in January that building AI data centers in space was "a no-brainer" and that it would be the cheapest place to put ⁠AI within two to three years. In February, after announcing a merger between SpaceX and his social media and artificial intelligence firm xAI, he said "space-based AI is obviously the only way to scale". SpaceX did not immediately respond to a request for further comment. SpaceX also highlighted ⁠its heavy dependence on Starship, its next-generation fully reusable rocket, which has suffered several delays and testing failures. "Any failure or delay in the development of Starship at scale or in achieving the required launch cadence, reusability and capabilities thereof would ⁠delay or limit our ability to execute our growth strategy," the filing said. Starship is designed to loft far larger payloads than SpaceX's workhorse Falcon 9 rocket, aiming to dramatically reduce launch costs for Starlink satellites, space‑based data centers and human missions to the moon. Reporting by Echo Wang; Writing by Joe Brock; Editing by Nick Zieminski Our Standards: The Thomson Reuters Trust Principles., opens new tab * Suggested Topics: * Artificial Intelligence * Securities Enforcement * Corporate Counsel * Capital Markets Echo Wang Thomson Reuters Echo Wang is a correspondent at Reuters covering U.S. equity capital markets, and the intersection of Chinese business in the U.S, breaking news from U.S. crackdown on TikTok and Grindr, to restrictions Chinese companies face in listing in New York. She was the Reuters' Reporter of the Year in 2020.

SpaceX says unproven AI space data centers may not be commercially viable, filing shows

NEW YORK, April 21 (Reuters) - SpaceX warned investors that its ambitions to build space-based artificial intelligence data centers, as well as human settlements on the moon and Mars, rely on unproven technologies and may not become commercially viable, according to a company filing. The business risks laid out in SpaceX's pre-IPO filing, which have not been previously reported, present a far more cautious assessment of the rocket maker's future than the vision laid out publicly by billionaire CEO Elon Musk in recent weeks, as the company gears up for what could be the largest initial public offering in history. Risk factors in a prospectus are required by U.S. securities law and are designed to inform investors of potential pitfalls while also shielding companies from future legal liability. "Our initiatives to develop orbital AI compute and in-orbit, lunar, and interplanetary industrialization are in early stages, involve significant technical complexity and unproven technologies, and may not achieve commercial viability," SpaceX said in an excerpt from the S-1 filing, which was seen by Reuters. Any future AI orbital data centers will operate "in the harsh and unpredictable environment of space, exposing them to a wide and unique range of space-related risks that could cause them to malfunction or fail," the document said. MUSK SAYS AI IN SPACE IS A 'NO-BRAINER' Companies use the S-1 registration document to disclose their finances and risks before going public. SpaceX is targeting a listing in the coming months at a valuation of roughly $1.75 trillion with a $75 billion raise, which would make it the largest initial public offering in history. Musk said at the World Economic Forum in January that building AI data centers in space was "a no-brainer" and that it would be the cheapest place to put AI within two to three years. In February, after announcing a merger between SpaceX and his social media and artificial intelligence firm xAI, he said "space-based AI is obviously the only way to scale". SpaceX did not immediately respond to a request for further comment. SpaceX also highlighted its heavy dependence on Starship, its next-generation fully reusable rocket, which has suffered several delays and testing failures. "Any failure or delay in the development of Starship at scale or in achieving the required launch cadence, reusability and capabilities thereof would delay or limit our ability to execute our growth strategy," the filing said. Starship is designed to loft far larger payloads than SpaceX's workhorse Falcon 9 rocket, aiming to dramatically reduce launch costs for Starlink satellites, space-based data centers and human missions to the moon. (Reporting by Echo Wang; Writing by Joe Brock; Editing by Nick Zieminski)