The Nvidia-SpaceX Deal Is Sending a Clear Signal on AI Dominance

Elon Musk just made a big call about where SpaceX (SPCX) is putting its computing dollars, and it says a lot about who is winning the AI race. The billionaire's rocket and satellite company is walking away from a mixed approach to AI hardware. 

Instead, it is betting everything on one chipmaker. That decision, paired with a string of other recent moves across the industry, points to something bigger than a single contract. It suggests Nvidia (NVDA) is the default choice for companies that need serious computing power, whether they build rockets, run AI labs, or manage massive data centers.

Why the AI Computing Race Is Key 

Every major AI company is chasing computing power to train and run increasingly complex models. This demand has turned chipmakers into some of the most closely watched companies on Wall Street.

Nvidia has built its business around what it calls extreme codesign, building the chip, the networking, and the software together as one system rather than selling parts on their own. Executive Vice President and Chief Financial Officer Colette Kress explained the thinking at the Bank of America 2026 Global Technology Conference on June 4. 

"No simple one chip would be able to solve that," Kress said, pointing to the seven different chips built into Nvidia's upcoming Vera Rubin platform, which the company says is set for a third-quarter rollout.

A full system approach is what pulled SpaceX away from a mixed hardware strategy. Speaking on SpaceX's earnings call, Musk said the company has decided to build its AI computing exclusively on Nvidia going forward. 

"We think the Vera Rubin architecture is the best architecture. We think it's the best AI computer," Musk said, adding that SpaceX values its close cooperation and partnership with Nvidia.

Musk said the new capacity will help power Grok, the AI chatbot from his company xAI, as well as SpaceX's pending Cursor acquisition, which he said is close to clearing regulatory hurdles.

Musk said SpaceX has a tentative target of 20 gigawatts of power, cooling, and electrical equipment online by the end of next year, though he cautioned that figure is a stretch goal. A more realistic outcome, he said, is closer to 15 gigawatts if roughly a quarter of the projects run behind schedule.

Musk argued SpaceX has an edge because of its rocket and satellite background. "SpaceX and Tesla are the two best companies on Earth at hardware," he said, adding that lessons from building rockets are translating directly into faster data center construction.

He also confirmed SpaceX expects to receive a significant share of Nvidia's GPU supply next year, a detail that matters given how tight chip supply has been across the industry.

Nvidia Keeps Landing Marquee AI Partners

SpaceX is not an isolated case. Nvidia announced a long-term partnership with Safe Superintelligence, the AI lab founded by Ilya Sutskever. 

Nvidia is investing directly in the company and giving it access to the Vera Rubin platform, which SSI said will let it scale its compute by an order of magnitude.

"We have research that is worthy of scaling up, and having access to a big Nvidia computer will let us do so," Sutskever said in the statement.

Nvidia is also pushing further into the plumbing that supports AI factories. At the Future of Memory and Storage conference, the company detailed new storage technology built around its Vera CPU, saying benchmarks show up to 3.21 times higher throughput than an x86 CPU in a compression and encryption pipeline.

More than 40 storage vendors, including DDN, KIOXIA, and Micron (MU), are working with Nvidia on the effort. Taken together, these moves show a pattern. Hyperscalers, AI labs, and now a hardware-focused company like SpaceX are all converging on the same platform.

Gilad Shainer, an Nvidia networking executive, described the strategy at TD Cowen's Technology, Media, and Telecom Conference. He said Nvidia designs its systems as a single unit, then sells the pieces separately so customers can mix and match if they choose.

This flexibility, combined with the software advantage Kress described, is part of why customers keep coming back for each new generation of chips. For investors watching Nvidia's stock, the SpaceX commitment is another data point suggesting the company's lead in AI computing is widening. 

What Next for NVDA Stock?

Analysts tracking NVDA stock forecast revenue to increase from $216 billion in fiscal 2026 (ended in January) to $909 billion in fiscal 2031. In this period, free cash flow is projected to expand from $97 billion to $550 billion. If NVDA is priced at 20x forward FCF, it could double within the next four years. 

Out of the 47 analysts covering NVDA stock, 43 recommend “Strong Buy,” three recommend “Moderate Buy,” and one recommends “Strong Sell.” The average NVDA price target is $304.32, above the current price of $222.