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Musk Says SpaceX Will Launch NVIDIA Vera Rubin AI Computers Into Orbit Next Year
Elon Musk said in a September 13 post on X that he is highly confident Space Exploration Technologies Corp. will transport NVIDIA Corporation Vera Rubin NVL72 AI computers into orbit next year, reinforcing SpaceX's Starmind plan to build AI data centers in space. The first satellite, Starmind AI1, will carry a space-optimized version of NVIDIA's Vera Rubin NVL72 rack-scale system, with SpaceX targeting a fourth-quarter 2027 launch and substantial scale by 2028. Musk has argued that orbital solar power could make space the lowest-cost location for AI computing within two to three years, though Microsoft President Brad Smith has publicly questioned whether computation will actually move from the ground to low-Earth orbit. The plan depends on SpaceX's Starship rocket proving its launch frequency and reliability, and when Musk said in SpaceX's August earnings call that the company would build its future AI infrastructure exclusively on NVIDIA, NVDA shares rose more than 4% while SpaceX shares fell more than 10% before paring losses. According to some analyst models, SpaceX accounts for approximately 5% of NVIDIA's revenue, and hedge fund holdings in NVIDIA rose from 275 in the first quarter to 285 in the second, while 119 funds held stakes in SpaceX as of the second quarter.
▼impact 4
Big Tech's $300B AI Guarantees Raise Hidden Investor Risk
Technology companies have provided as much as $300 billion in guarantees to finance artificial intelligence data centers and chips over the past year, helping support the construction boom without immediately recording most of the exposure as debt, the Financial Times reported Sunday. Meta pioneered the use of residual value guarantees for a major data center project last year, and Broadcom has since used them to support chip sales connected to Anthropic, while Nvidia has offered similar backing for infrastructure serving OpenAI and other customers. The guarantees set a minimum future value for computing equipment or data centers owned by special-purpose entities, and if an asset is eventually sold or leased for less than that amount, the technology company may have to cover part of the shortfall. Morgan Stanley estimates that seven major cloud and chip companies have accumulated more than $3.1 trillion in off-balance-sheet commitments and other forms of credit support. Broadcom provided about $29 billion in backing for a special-purpose vehicle that will buy chips and lease them to Anthropic, Nvidia offered to support as much as 25% of certain financing packages and provided $105 billion in guarantees to SB Energy for an Ohio data center campus intended for OpenAI, and Meta supplied a $28 billion guarantee for its Hyperion data center venture with Blue Owl in Louisiana. Credit-rating agencies assess how much the promised value exceeds an asset's likely price under stressed conditions and may add that difference to their leverage calculations, and while analysts generally have concluded the assets provide enough collateral to limit expected losses, investors will need to monitor whether that remains true as AI hardware ages and financing commitments grow.
▲2impact 5
Oracle Cloud Revenue Jumps 121% as Backlog Reaches $664 Billion
Oracle Corporation reported on September 10 that its revenue rose 30% in the fiscal first quarter, driven by a 121% jump in cloud infrastructure revenue, the business that rents computing power to AI companies. The company said its remaining performance obligations, the value of contracts signed but not yet delivered, reached $664 billion, more than seven times the revenue it expects this year, and on the back of that backlog Oracle raised its full-year revenue outlook to at least $90 billion. Roughly half of the backlog should turn into revenue within three years, more than three times what the company expects to collect in the whole of this year, and Oracle signed more than $30 billion of new AI cloud deals in the quarter, most structured as prepayments or customers bringing their own hardware. Delivering that backlog is costly: Oracle spent $28.5 billion on data centers and equipment in a single quarter, more than the cash its business generated, free cash flow stayed negative, gross margin fell more than five points to 61%, and a day after the results the company expanded its job-cut plan. Concentration risk looms as well, since a $300 billion contract with OpenAI signed last year begins in 2027 and is close to half of the current backlog, while OpenAI is still losing money. Management has pointed to an investor day in October for a fuller plan on margins and cash flow ahead of the next quarterly report in December.