Elon Musk says memory chips, not raw computing power, are the biggest constraint on SpaceX's plan to bring 15 to 20 gigawatts of AI data-center capacity online by the end of next year. The shortage has already pushed Micron Technology's revenue, margins, and capital spending sharply higher.
Elon Musk says a memory chip shortage is now the biggest obstacle to SpaceX's plan to bring 15 to 20 gigawatts of AI computing capacity online by the end of next year. On the company's Q2 2026 earnings call, Musk said unit volume for memory chips is growing only 20% year-over-year, while customer demand for compute is growing 200% year-over-year.
Building at city scale
Data-center allocators such as Musk describe capacity in gigawatts, a unit of electric power equal to 1 billion watts. For comparison, New York City consumes 10.4 gigawatts of power at peak demand during a summer heat wave. That means SpaceX is aiming to build more capacity than the entire city needs at its busiest, in under two years.
Data centers rely on electricity to run their compute infrastructure, so securing power is as important to the plan as securing chips.
Memory supply can't keep up
Because demand for compute is growing far faster than memory chip output, manufacturers can keep raising prices while still expanding production. That dynamic shows up directly in Micron Technology's results: the company's revenue grew to $41 billion last quarter, up from $9.3 billion in the same quarter a year earlier.
Micron is now running an 80% operating margin, meaning $8 of every $10 in revenue falls to the bottom line as profit. At the same time, the company's capital expenditures have grown to $25 billion over the trailing 12 months and are likely to keep rising to meet demand from companies like SpaceX.
An uncertain runway
If Micron holds its 80% operating margin as revenue keeps climbing, the company could see total revenue grow to $200 billion in a single 12-month period, with more than $150 billion in operating income. That would look inexpensive next to Micron's current market cap of $1.06 trillion. But memory chip demand has collapsed multiple times in past decades, dragging Micron's profits and share price down with it, and it remains unclear whether AI has turned the industry from cyclical to secular growth.
Source: Fool
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