SpaceX shares experienced volatility on Thursday as investors processed a wave of significant announcements from the rocket and satellite enterprise. The most impactful news stemmed from a report indicating that SpaceX and its CEO Elon Musk are fundamentally overhauling their data center construction approach, a transition that could potentially decelerate the pace at which new facilities are brought online.
According to the report, a new management team drawn from the rocket division is prioritizing reliability over construction velocity. This involves incorporating additional backup power and cooling system configurations, alongside implementing more comprehensive testing protocols for data centers prior to their official launch. SpaceX (ticker: SPCX) shares were priced at $150.84, reflecting a gain of $3.29 (+2.23%) as of 12:38:45 PM ET, with the market in an active trading state.
This new model stands in stark contrast to how xAI, Musk's AI venture now folded into SpaceX, constructed the Colossus campus in Tennessee. That AI division famously erected its first data center in a mere 122 days, a pace NVIDIA CEO Jensen Huang lauded as "superhuman." However, such rapid construction came with trade-offs, notably frequent system outages. The report indicates that last week, the Memphis data center experienced a failure due to construction-related issues, taking portions of the Grok large language model offline and simultaneously impacting compute clients such as Anthropic and Google.
Nearly a dozen senior executives from the former data center division have departed, with their roles now filled by engineers from SpaceX's rocket division. Musk has been visiting the Memphis campus almost every Sunday; following the recent outage, he posted on X that the company is "implementing corrective measures to prevent similar incidents from recurring." While the pace of data center expansion may potentially slow, SpaceX's defense business is receiving a positive boost, as the UK has purchased nearly $40 million in satellite services from the company, deepening its reliance on the provider.
The UK Ministry of Defence procured approximately $17.6 million in Starshield services, the military-grade version of Starlink with higher encryption standards, and an additional $22.3 million in standard Starlink equipment. This deployment includes around 1,000 Starshield terminals and 500 Starlink terminals. The UK also stands as the first nation outside the United States to publicly confirm its use of the Starshield system.
Despite an internal lock-up expiration this week, SpaceX shares managed a modest gain on Thursday. Having gone public on June 12, the 90-day post-IPO period ended, and by Wednesday, roughly 319 million insider-held shares became eligible for sale, representing about 7% of total insider holdings. SpaceX launched its IPO in June at $135 per share, valuing the company at $1.77 trillion. The offering raised approximately $85.7 billion, with the free-float representing less than 5% of total shares outstanding.