SpaceX plans to put AI into orbit. It still has a lot of artificial intelligence business to do on the ground. That business will require a lot of power.

Electricity has emerged as a key constraint for AI growth. Morgan Stanley analyst Stephen Byrd sees AI power demand growing to almost 100 gigawatts by 2028. (AI computing is often measured by how much electricity the servers draw.)

That's a big number. Total U.S. electricity generating capacity is roughly 1,300 gigawatts. That figure represents about 8% of total U.S. capacity. Utilities can't scale that fast, leaving data center operators to supply their own juice.

"SpaceX has proven capabilities in scaling time-to-power solutions faster and cheaper than its competitors," wrote Byrd in a recent report. "We view this as a key competitive advantage given the magnitude of our projected US power shortfall."

SpaceX always moves fast. It ended the second quarter with about 1.4 gigawatts of AI computing capacity. It wants to have 10 GW by the end of 2027. Byrd sees SpaceX's "terrestrial compute" peaking at about 15 GW in 2031.

Eventually, SpaceX plans to put AI data centers in orbit, using the sun's free energy to power them (and the vacuum of space to help cool them). Orbital AI compute solves many of the problems AI data centers pose for local communities. Of course, no one has done it yet. And SpaceX needs its huge fully reusable rocket, Starship, to make orbital data centers cost-competitive. (Starship's 14th test flight is slated for Sept. 28.)

It will be a while before investors know exactly how viable space-based AI is. SpaceX should be fine regardless of how the industry develops. It "has a history of attacking whatever constrains scale most," added Byrd.

The operating principle is one reason the company has grown into a trillion-dollar behemoth with the largest constellation of communications satellites, Starlink, ever assembled by humans.

SpaceX stock was up 0.5% in premarket trading on Tuesday, while S&P 500 and Dow Jones Industrial Average futures were flat and up 0.2%, respectively.

SpaceX stock dropped 0.6% on Monday, missing the broader tech rally. The Nasdaq Composite rose 2.3%. SpaceX is still relatively new, it's IPO was in mid-June, and lots can impact shares. Monday, the Nasdaq-100 rebalanced position sizes. SpaceX went up in size, which should benefit shares with funds adding to positions to mirror the index. Sometimes, the impact on shares happens before an event. SpaceX stock rose roughly $10 a share in the days leading up to the rebalance.