SpaceX Turns Turbine Maker as Musk Warns of Years-Long Equipment Shortage

Elon Musk recently warned that turbines are in short supply through 2030, stating that SpaceX and Tesla may need to produce turbine blades and vanes internally. To address the bottleneck in turbine production, SpaceX is constructing a factory in Bastrop, Texas. Musk believes that bringing production in-house could get gas turbines online up to 18 months sooner.

This development is crucial as data centers increasingly pair industrial boilers with steam turbines to avoid relying on gas turbine backups. Applied Digital CEO Wes Cummins reported that gas turbines ordered today may not arrive until 2032. However, not all turbines are the same, as gas turbines must withstand high temperatures and loads, necessitating unique alloys and manufacturing techniques.

In contrast, steam turbines handle lower temperatures, allowing for a broader range of alloys. Despite their similar names, both gas and steam turbines ultimately run on natural gas supplied directly to the site. Gas turbines generate electricity by burning the supplied fuel, while steam turbines require burning the gas on site to heat water, which spins the turbine for electricity production.

Steam turbines and boilers have an established supply chain that can ramp up production quickly, which is why Rentech Boiler Systems can manufacture and deliver a packaged boiler within a year. Babcock & Wilcox is already receiving significant interest, having secured a $2.4 billion agreement with Base Electron to provide 1.2 GW of generation for Applied Digital's AI campuses.

B&W is supplying boilers for the on-site power plant, with operations expected to begin in 2028. Nuclear and natural gas are currently the leading solutions for data center power, with hyperscalers like Google securing nuclear supply agreements in Finland. The ultimate goal for most hyperscalers is to power their facilities entirely with renewables or nuclear energy, with fossil fuels serving as a bridge in the meantime.