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Has Elon Musk given up on Tesla\u2019s Master Plans, on the electrified economy, on solar power as we know it? From the SpaceX IPO filing<\/a> released this week, it sure seems like it.<\/p>\n A recap for those not enmeshed in the Musk-verse: Tesla has released four Master Plans<\/a> over the years, and while details have varied, the through line has been electrification of the economy. Musk put it best in his first edition: \u201cthe overarching purpose of Tesla motors\u2026is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy.\u201d<\/p>\n But recently, one of Musk\u2019s companies, xAI, has embraced the mine-and-burn hydrocarbon economy, using dozens of unregulated natural gas turbines<\/a> to power its data centers with plans to buy $2.8 billion more<\/a>, effectively cementing the fossil fuel\u2019s role in the company\u2019s AI operations.<\/p>\n It\u2019s a curious turn for a businessman who built his empire on clean energy \u2014\u00a0and who has no qualms directing his companies to buy from one another. SpaceX spent $131 million on 1,279 Cybertrucks, and xAI has spent $697 million in the last two years on Tesla Megapacks, it\u2019s grid-scale battery storage systems that the company will use to manage peak loads. But so far, xAI hasn\u2019t bought a materially significant number of solar panels from Tesla.<\/p>\n Solar power isn\u2019t missing in the SpaceX filing, it\u2019s just all concentrated on space, which the company touts as the future of data center power. Terrestrial solar garners a few mentions \u2014 not as a power source for xAI data centers but instead to show how much better SpaceX thinks space-based solar will be.<\/p>\n It\u2019s no secret that Musk and other Silicon Valley executives have become obsessed with space-based solar power. SpaceX says that space-based solar arrays can generate \u201cmore than five-times the energy\u201d of terrestrial ones thanks to 24\/7 illumination. As AI data centers have run into opposition here on Earth, CEOs like Musk have started mulling big server racks in space powered by that 24\/7 sunshine. Hammer, meet nail.<\/p>\n Even if SpaceX is able to bring down the cost of boosting a data center into orbit, the economics are challenging at best<\/a>. Power prices for Starlink satellites are multiples higher than what a terrestrial data center typically spends, and protecting chips from the rigors of space won\u2019t be easy or cheap. It\u2019s also not clear whether AI training can be distributed across multiple satellites, leaving a significant chunk of AI work earthbound. It\u2019s not just one problem that SpaceX needs to solve, but many.<\/p>\n It\u2019s likely that Musk considers xAI\u2019s current data centers as stopgaps, that once SpaceX is able to loft gigawatts worth of servers into orbit \u2014\u00a0probably just a few years away, in his mind \u2014 he\u2019ll scrap what\u2019s here on the ground, natural gas turbines included and not have to think about NIMBYs anymore. The risk, of course, is that he\u2019s wrong.<\/p>\n It\u2019s not just NIMBYs that Musk is worried about, though. He\u2019s clearly concerned that computing demands from AI will quickly outstrip what we can provide here on Earth. Sprinkled throughout the SEC filing are references to \u201cterawatt-scale annual AI compute growth,\u201d which will require power to match. That\u2019s a stunning figure when you consider that all the world\u2019s data centers use around 40 gigawatts today<\/a>.\u00a0<\/p>\n This is Musk\u2019s \u201cfirst principles\u201d thinking in action. At some point, he assumed the world will need an additional terawatt worth of compute every year, and he worked back from there. \u201cWe believe that third-party estimates on data center demand are constrained by the practical supply limitations that exist in a terrestrial context and the power shortage may be far greater than what research estimates suggest,\u201d the company argues.<\/p>\n Possible? Sure, I suppose. But consider that humanity today uses about 35,000 terawatt-hours<\/a> of energy annually, or about 4 terawatts on a continuous basis. Energy demand has risen lately, and for AI, it probably is in an phase of exponential growth, which could either continue or level off. We have no way of knowing at this point, but if there\u2019s one thing Musk is good at, it\u2019s spotting a trend at its inflection point and extrapolating wildly.<\/p>\n Here\u2019s where Musk\u2019s problems settle back down to Earth. I\u2019m no rocket scientist, but I suspect that shipping solar panels on a flatbed truck uses less energy than sending them into orbit. Plus, space-ready solar panels will need to be manufactured at unprecedented scale. Not insurmountable problems, but also maybe a distraction. We\u2019ve barely scratched solar\u2019s potential here on Earth, for example.<\/p>\n The perfect doesn\u2019t have to be the enemy of the good. There\u2019s plenty of room to improve things here on Earth even while we chase after our dreams in the stars.\u00a0<\/p>\n Just three years ago, Musk and his colleagues at Tesla released the \u201cMaster Plan Part 3,\u201d which thoughtfully outlined a \u201cplan to eliminate fossil fuels.\u201d A good starting point might be xAI\u2019s data centers.<\/p>\n<\/div>\n When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/em><\/p>\n