Space Exploration Technologies, or SpaceX, is making a bold move into the natural gas sector, aiming to secure fuel for its Starship launches and power its artificial intelligence (AI) data centers. The company is buying gas turbines, planning new pipelines, and hiring natural gas traders to ensure reliable fuel supplies. These investments could enhance Starship launch reliability and accelerate the deployment of AI computing capacity.
SpaceX's subsidiary, Coastal Connect Services, has proposed a 32.4-mile natural gas pipeline in Florida, approved by regulators on October 6. Additionally, an eight-mile pipeline called Starpipe is planned in Texas, set to begin operations in January 2027. These pipelines aim to reduce the need for trucking methane, although purification, liquefaction, and storage will still be required. The company is also hiring traders to manage fuel supplies and mitigate price fluctuations.
SpaceX is also securing electricity for its AI data centers by purchasing $2 billion worth of mobile gas turbines and related equipment. The company is manufacturing turbine blades and vanes internally to avoid supplier delays. While this could bring forward AI revenue, the financial returns will depend on how profitably SpaceX uses the additional computing capacity. Regulatory challenges remain, as a federal judge recently rejected an argument that gas turbines powering SpaceX's AI data centers in Mississippi were exempt from air permits.
The company's expansion comes with significant costs. SpaceX generated $13.1 billion in operating cash flow in the first nine months of 2026 but spent $48.1 billion on capital investments, resulting in $35 billion in negative free cash flow. The SI business, previously known as the AI segment, reported $7.6 billion in revenue but only $431 million in operating profit in the third quarter, highlighting the challenges of turning revenue into profit.