By Tim Higgins

Nobody said the billionaire space race was going to be easy.

Jeff Bezos and Elon Musk each had his own difficulties this past week in their renewed rivalry over outer space. These underscored just how challenging their sci-fi dreams will be to make real.

For Bezos, merely getting off this planet remains one of his biggest challenges -- evident by the Blue Origin rocket's spectacular explosion on the launchpad Thursday evening.

For Musk, the tension was more nuanced. It played out on social media when he dropped confusing information about SpaceX's data-center business. This muddied the waters for the company's coming IPO that aims to raise tens of billions of dollars to fund his multiplanetary goals.

While their lists of problems are different, they are both chasing something similar: building the Galaxy's Everything Store.

Both Musk and Bezos see space as the perfect home for remote servers, partly because of the vast energy that can be harnessed from the sun. The two are using their business empires to put the pieces together to compete there, although significant technical and scientific challenges remain.

Though approached differently, the two camps are assembling an ecosystem of capabilities: rockets to reach space, data centers among the stars and satellites to beam data between heaven and earth.

While Blue Origin is struggling with rockets and has ambitions of orbital data centers, Amazon, where Bezos remains as executive chairman, dominates the Earth-based cloud-computing business.

Musk has built an unrivaled rocket business and cash-generating satellite business. He is now seeking to go public in large part on a sales pitch that SpaceX can build out artificial-intelligence data centers in orbit.

That would be a direct attack on the heart of Amazon's big moneymaker, cloud-computing business Amazon Web Services.

Technological barriers notwithstanding, Musk's vision could be years away, if not more. Meanwhile, details tucked into the SpaceX IPO prospectus made public in late May shined light onto early steps by the company to rent computing power to customers. The filing disclosed terms of a deal with Anthropic, one of the leading AI labs, that underscore how lucrative such a business can be for Musk's money-losing rocket maker.

Anthropic has agreed to pay $1.25 billion each month through May 2029 for use of SpaceX's so-called Colossus and Colossus II data centers in the Memphis, Tenn., area, according to the filing. Collectively the two facilities provide about 1 gigawatt of computing power.

"Our first-principles thinking enables us to build coherent compute at scale and at rapid speed with lower costs than most other companies in the industry," SpaceX said in its filing.

To be clear, that's still a small amount of computing power compared with AWS. The knock against AWS, however, has been the perception that it lacked the heft required for training AI -- which is what Colossus was designed to do best.

Amazon is racing to build out its AI infrastructure to better position its cloud business to play a key role in the new tech boom. Amazon Chief Executive Andy Jassy has announced plans to invest $200 billion this year alone. Part of that money is to churn out more custom-made chips for AI training and inference.

Last fall, Amazon opened an $11 billion campus in rural Indiana dedicated to running AI models for Anthropic. The AI lab recently said it has committed more than $100 billion during the next decade to secure up to 5 gigawatts of computing power from AWS for its AI.

All of that plays to AWS's strengths on this planet.

The New Glenn rocket that exploded Thursday near Cape Canaveral, Fla., was part of Bezos' plan to narrow the gap between Blue Origin and SpaceX. The company has expected to use New Glenn rockets to deploy satellites for Amazon and others. (Earlier this spring, Amazon announced a deal to buy satellite operator Globalstar to better compete with SpaceX's Starlink satellite business.)

Shortly after the incident, Bezos posted on social media his intention to rebuild, suggesting that even in setback, the work carried special meaning, writing: "It's worth it." That throw-away line, I'm told, has become a rallying cry within Blue Origin as it moves forward.

Musk is also putting the pieces together to strengthen his empire's potential weaknesses.

SpaceX and Tesla, where Musk is also CEO, have announced plans of their own for a giant chip factory to produce the custom computing power that, he says, is needed for orbital data centers, humanoid robots and autonomous vehicles.

His Earth-based data centers came into the SpaceX fold earlier this year thanks to its merger with Musk's AI startup, xAI. The super computers had been assembled as he raced to develop his own AI models to catch up with Anthropic, OpenAI and other labs.

The first facility was brought online in 122 days, the second one even faster at 91 days. The company touted that these times were significantly faster than the industry benchmarks of two years for a totally new build for less powerful facilities.

Musk's fast approach also drew protests from locals in the Memphis community unhappy about the facilities' power and water demands.

Still, such projects play to Musk's strength of tackling hard physical problems through innovative -- and sometimes controversial -- ways.

Clearly, some would-be SpaceX investors were excited about the prospect of the recurring revenue from Anthropic -- potentially in the neighborhood of $45 billion.

Yet Musk gummed things up with a post this past week on social media that seemed to suggest the length of the deal with Anthropic wasn't long term as implied in the SpaceX filing, "although it's possible that may be what happens."

(Both statements agree that the parties can walk away with 90 days' notice.)

The episode had all of the hallmarks of Musk bucking a narrative that was being floated on social media. Namely, that the SpaceX-Anthropic deal suggested his AI ambitions were scaling back -- even as the filing stressed it was leasing unneeded computing capacity.

"We won't leave them hanging and will provide a reasonable off-ramp, but if compute gets super tight I said we might need it back at some point," Musk posted.

In the race for space, Musk wants investor attention on the stars -- not earthbound pursuits.

Write to Tim Higgins at tim.higgins@wsj.com

(END) Dow Jones Newswires

May 31, 2026 05:30 ET (09:30 GMT)

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