Elon Musk spent over $1 billion in May on a company most people have never heard of. APR Energy, based in Jacksonville, Florida, operates a fleet of mobile gas and diesel turbines. These are not small generators. The fleet can produce more than 1 gigawatt of power, roughly equivalent to a mid-sized conventional power station, except the whole thing travels on trailers.
The deal was never announced. It surfaced through a Federal Trade Commission filing dated May 14, 2026, and a separate stock market disclosure from a minor shareholder who sold its 5% stake for around $50 million, implying a total deal value above $1 billion.
The purpose is straightforward. Musk's AI company, xAI, now a division of SpaceX following a merger earlier this year, runs two large computer centres in South Memphis called Colossus 1 and Colossus 2. These facilities need enormous amounts of electricity, around the clock. The US power grid in that area cannot supply it fast enough. So xAI deployed dozens of gas turbines to fill the gap, without obtaining the environmental permits required by US law.
The NAACP sued xAI in April, represented by the Southern Environmental Law Center and Earthjustice. The lawsuit alleged that 27 unpermitted turbines near Southaven, Mississippi, could emit over 1,700 tons of nitrogen oxides and 19 tons of formaldehyde per year. The turbines sit half a mile from homes and about a mile from an elementary school, in an area already rated F for air quality by the American Lung Association. When the NAACP notified xAI of the violations, the company responded by adding six more turbines. The US Department of Justice then asked a federal court to dismiss the lawsuit entirely, arguing the turbines are a matter of national security.
SpaceX's own IPO filings, disclosed when the company went public on the Nasdaq this year, show the company plans to spend another $2.8 billion on gas turbine infrastructure over the next three years. At least $2 billion of that is earmarked for mobile units, which is exactly the APR Energy product. Owning APR outright means Musk controls the supply chain for that equipment rather than depending on an outside vendor.
This sits alongside a separate plan: SpaceX is building an eight-mile natural gas pipeline in South Texas, called Starpipe, to deliver fuel directly to its Starbase launch site at Boca Chica. The pipeline, expected to be operational by January 2027, will replace the hundreds of tanker trucks currently needed to deliver fuel for each Starship rocket launch. The company has also signed over 100 oil and gas leases in Texas since 2023 and is evaluating drilling its own natural gas.
The broader energy picture here matters for every business operator to understand. AI data centres are now one of the largest new sources of electricity demand on the planet. The International Energy Agency projects natural gas will supply the single largest share of new electricity for data centres through 2030, ahead of renewables, simply because it can be deployed faster. Planned non-renewable energy capacity in the US surged 71% between 2025 and 2026, while renewable growth was nearly flat at 2%. The grid was not built for this, and the gap is being filled with gas.
For businesses that have made net-zero or emissions-reduction commitments, there is a practical lesson here. The AI tools your organisation uses, or is planning to use, are most likely powered by fossil fuels. That is not a criticism: it is a fact worth knowing when making sustainability claims or calculating your own carbon footprint. The supply chain for AI compute runs, increasingly, on gas turbines.
xAI reported a $6.4 billion loss in 2025. SpaceX's net loss widened to $4.28 billion in the first quarter of 2026 alone, even as revenue grew. The spending is real, the losses are real, and the fossil fuel infrastructure being built to support it is real and growing. Whether the environmental cost gets properly priced in, legally or financially, is a question that courts, regulators, and eventually business customers will have to answer.