SpaceX and AI Colossus: A Controversial $6.3 Billion Contract

SpaceX and AI Colossus: A Controversial $6.3 Billion Contract

SpaceX has signed a computing contract with Reflection AI worth up to $6.3 billion, approximately €5.8 billion. The open-source AI startup will pay $150 million per month starting July 1 for access to Nvidia GB300 chips hosted in Colossus.

Nvidia holds a unique position in this agreement. The chip manufacturer provides the hardware that powers the Colossus 2 servers and simultaneously invested around €725 million in Reflection AI last year. SpaceX acquired xAI in February. Since then, Elon Musk's company has been operating two data centers in Memphis, Colossus 1 and Colossus 2, and is leasing them to external AI companies.

• Anthropic pays €1.13 billion per month for Colossus 1
• Google pays €836 million per month for part of Colossus 2
• Reflection AI will join starting July 1 with €136 million monthly

These three contracts combined represent over €24 billion in annualized revenue for SpaceX. Each party can terminate the agreement with 90 days' notice after the first three months. The chips provided are GB300, the latest generation available from Nvidia.

Reflection AI was founded in 2024 by Misha Laskin and Ioannis Antonoglou, two former researchers from Google DeepMind. Ioannis Antonoglou co-developed AlphaGo, the program that defeated the world champion Go player in 2016. In October 2025, the startup raised €1.81 billion at a valuation of €7.2 billion, with Nvidia, Sequoia, and Lightspeed among its investors. In June, Bloomberg reported that a new funding round was underway at a valuation of €22.6 billion.

Nvidia holds a unique position in this agreement. The chip manufacturer provides the hardware that powers the Colossus 2 servers and simultaneously invested around €725 million in Reflection AI last year. Thus, the same company supplies the servers and finances the client renting them.

Reflection has yet to release any public models. However, the company plans to release the weights of its future models as open weights, neural network parameters that researchers and developers can download and modify freely, in contrast to closed labs like OpenAI or Anthropic. A spokesperson for Reflection stated that "recent events highlight the importance of open source for the AI ecosystem, with more countries and companies recognizing the risks associated with exclusive reliance on closed models." The startup is also collaborating with the U.S. Department of Energy on the Genesis Mission and with programs from the Pentagon.

In Memphis, Unpermitted Gas Turbines at the Center of a Federal Lawsuit

Colossus 2 is the subject of a federal legal proceeding. The NAACP, an American civil rights organization, filed a lawsuit against xAI in April in federal court for violating the Clean Air Act. The issue involves several dozen natural gas turbines installed without permits around the two data centers in Memphis and Southaven, Mississippi. xAI justified their installation by claiming they were "temporary," but the EPA revised its rules in January and now requires permits even for large turbines used temporarily.

KeShaun Pearson, executive director of Memphis Community Against Pollution, stated that emissions from the site already exceed those of Memphis International Airport. The Boxtown neighborhood, directly exposed, is a working-class area with a majority Black population, inhabited since 1863 by descendants of former slaves. Residents testified to chronic respiratory issues before the Shelby County Commission in April 2025. At full capacity, the Memphis complex will consume up to 40% of the city's average summer electricity demand.

SpaceX indicated in its IPO filing that it has "sufficient capacity for its own AI models and to meet the obligations arising from these contracts." However, the stock has declined since the IPO launch in June, even as computing contracts continued to pour in.