SpaceX Tackles Gas Turbine Shortage by Building Own Factory

Elon Musk recently warned that gas turbines are sold out through 2030, which could cause significant delays for SpaceX and Tesla. To mitigate this issue, SpaceX is building a factory in Bastrop, Texas to manufacture turbine blades in-house, with the goal of cutting delivery times by up to 18 months.

Data center operators like Applied Digital are turning to steam turbines and on-site boilers as an alternative to gas turbines, which have order backlogs stretching to 2032. Babcock & Wilcox has signed a $2.4 billion deal to supply 1.2 GW of steam turbine generation for Applied Digital's AI campuses, with operations expected to start in 2028.

Steam turbines are less complex and require fewer unique alloys than gas turbines, making them easier to produce and deliver quickly. This approach is being adopted by data center operators as a way to bypass the gas turbine shortage and ensure reliable power supply for their facilities.