Elon Musk's $40 Billion Terrestrial Data Center Pivot Draws Fire From Short Seller Jim Chanos After 'Orbital' IPO Hype: '...Pretty Material $500B Question'
Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk is facing questions from financial analysts and short sellers regarding the company’s recent $40 billion debt raise. Critics are challenging the company’s shift from promoting space-based data centers before its initial public offering to currently funding terrestrial infrastructure.
The ‘$500B Question’
Financial research firm Rittenhouse Research questioned the nature of the infrastructure build on X, stating, “Why is SpaceX borrowing $40B to build ‘terrestrial’ data centers?”
The firm noted that before the SpaceX IPO, they were told by “‘first principles’ thinkers that ‘orbital’ data centers are superior in every way to ‘terrestrial’ data centers”.
Short seller Jim Chanos responded to the thread, asking, “And what percentage of the 10 GW of capacity being built out by $SPCX in 2027 is terrestrial….?!” Chanos added, “That’s a pretty material $500B question”.
Rittenhouse Research replied to Chanos, stating they assume the capacity is “100% terrestrial, given I haven’t heard much about ‘orbital’ data centers following the $SPCX IPO.”
GPU Financing and AI Expansion
The debate follows Musk’s recent announcement on X that SpaceX closed “$40B of debt for GPUs” to train and run advanced AI systems. Musk stated the financing is primarily callable debt for GPU purchases arriving in the first and second quarters of 2027.
Dan Ives, a partner and senior managing director at Yorkville Ives, noted that SpaceX is aggressively building hyperscaler infrastructure. Ives estimated that an additional 800 to 1,000 data centers will be built in the U.S. over the next few years, stating, “This will be a Game of Thrones battle in the tech world to secure compute power.”
Defending the debt raise, Musk noted on X that debt markets have restricted capital for companies lacking “substantial revenue independent of AI data centers,” asserting that SpaceX is “investment grade and have Starlink & launch.” SpaceX’s artificial intelligence segment saw its third-quarter revenue rise to $7.56 billion.
How Has SPCX Performed Since Listing?
SpaceX shares were 1.67% lower since its listing in June. It was 0.59% lower over the last month and 1.00% higher over the last five days. It rose 0.35% in premarket trading on Monday.
Benzinga Edge Stock Rankings shows that SPCX maintains a strong price trend in the medium and the long term but a weak trend in the short term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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