Musk Doubles Down on Nvidia in AI Bet

Nvidia shares rose by 4% on Wednesday after Elon Musk announced that SpaceX will rely exclusively on Nvidia hardware to power its artificial intelligence products. This move comes as a result of the company's decision to use Nvidia's Vera Rubin architecture, which Musk called 'the best AI computer'.

The exclusive deal between SpaceX and Nvidia adds fresh support for Nvidia's long-term demand story, according to analysts. Musk emphasized the close cooperation between the two companies on multiple levels, including their work on the proposed 'Starmind' orbital AI data center network.

SpaceX plans to use Nvidia's top-tier Vera CPUs, Rubin GPUs, and the Vera Rubin NVL72 rackscale system for its first Starmind satellite. The integrated design is expected to simplify deployment, lowering costs and improving efficiency by harnessing more abundant solar energy and the extreme cold of space.

Musk's vision comes with familiar execution risks, however. He has a history of setting ambitious deadlines that often slip, and while he said on the call that the satellite 'is not some sort of far future distant thing' and launches could begin next year, that timeline is widely seen as aspirational.