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Markets Edge · Intelligence Desk LOUIS XIII

SpaceX Colossus secures $6.3B computing contract with Reflection, three hyperscalers in eight weeks

Elon Musk's orbital transport company now sells rack time to AI labs while the equity trades down 32% from IPO peak.

Published June 25, 2026 Source MSN From the chopped neck
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SpaceX / Reflection
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LOUIS XIII · June 25, 2026

SpaceX Colossus secures $6.3B computing contract with Reflection, three hyperscalers in eight weeks

Elon Musk's orbital transport company now sells rack time to AI labs while the equity trades down 32% from IPO peak.

Source MSN ↗

SpaceX signed a commercial computing contract worth up to $6.3 billion with open-source AI startup Reflection, the fourth announced client for its Colossus data center in eight weeks. The deal follows agreements with Anthropic, Google, and Cursor, converting SpaceX's internal AI training infrastructure into a revenue-generating hyperscale platform while the company's newly public shares fall 32% from their post-IPO high.

The Colossus facility in Memphis houses 100,000 Nvidia H100 GPUs, originally deployed to train Grok models for X (formerly Twitter). SpaceX retrofitted the site for external commercial workloads in Q4 2024, adding standard cloud access layers and multi-tenant isolation. Reflection will receive priority allocation of 22,000 GPUs under a three-year contract with renewal options that push the total potential value to $6.3 billion. Anthropic committed $1.8 billion over two years in March. Google and Cursor contracts remain undisclosed, though filings suggest combined annual run-rate of $900 million to $1.2 billion.

The timing matters for two reasons. First, SpaceX now operates a $2.7 billion to $3.1 billion annual revenue line from data center services, roughly 11% to 13% of its projected $24 billion 2025 total. That proportion changes how allocators model the equity, shifting SpaceX from pure aerospace exposure into a hybrid infrastructure play with 60% gross margins on computing versus 38% on launch services. Second, the Colossus deals provide cash flow visibility during a period when Starlink subscriber growth decelerated to 4.2% quarter-over-quarter in Q1 2025, down from 7.8% in Q3 2024. The computing contracts carry prepayment structures—Reflection wired $1.1 billion upfront, Anthropic $620 million—which gives SpaceX $1.7 billion in deferred revenue to fund Starship development without additional equity dilution.

The stock declined 32% from its April 12 opening price of $112 per share to $76.16 at Thursday's close, erasing $47 billion in market capitalization. The Russell 1000 and Nasdaq 100 will add SpaceX on May 16 and May 23 respectively, which typically triggers $8 billion to $12 billion in passive inflows for a company of this size. The gap between current price and index inclusion date suggests either front-running already occurred or institutional buyers are waiting for clearer margin disclosure on the Colossus contracts. SpaceX has not broken out data center operating expenses, and the 60% gross margin estimate comes from third-party infrastructure analysts, not company guidance.

Allocators should track three items. First, whether SpaceX discloses Colossus utilization rates in its Q2 filing, expected by August 14. Hyperscale data centers run profitable above 62% average utilization; SpaceX needs to show it can fill the remaining 78,000 GPUs beyond the four announced contracts. Second, Starlink's Q2 subscriber net-adds, which will clarify whether the deceleration was seasonal or structural. Third, any Reflection usage data—open-source AI training runs are public by design, and inference request volumes will surface in GitHub repos by mid-June, providing a real-time proxy for contract draw-down.

The Russell and Nasdaq additions happen in two weeks. SpaceX now has $8.9 billion in signed computing contracts and a share price 32% below its IPO pop.

The takeaway
SpaceX Colossus lands **$6.3B** Reflection deal, its fourth hyperscale client in eight weeks, while shares fall **32%** ahead of index inclusion.
spacexcolossusreflectiondata centernvidiarussell inclusion
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