SpaceX has added new language to its IPO filing warning potential investors about the company’s access to a potentially scarce resource: water.
The company, which now includes Elon Musk’s AI play, xAI, wrote in an amended version of the filing on Monday that access to water – needed to cool its data centers – is as important as SpaceX’s ability to protect power, processors, and other critical resources.
The addition comes amid an ever-evolving debate about how much water data centers are being used, and whether that use is contributing to local droughts that are being exacerbated by climate change.
Deep in the “risk factors” section of SpaceX’s IPO filing, the company added language about water to a section about the challenges of scaling AI infrastructure.
Previously, SpaceX focused on telling investors that its data centers were primarily restricted from accessing “power at economically feasible rates,” as well as long construction times and material shortages. The amended file adds more lines about water availability. SpaceX is now telling potential investors in the IPO that construction of the data center is constrained by “the availability of energy and water at economically feasible rates.”
The company goes on to say that “significant water resources may be required to cool large data center operations.” Water availability is such a concern that SpaceX says it has become “a critical issue in data center location selection, development and operations.”
SpaceX also states that “water shortages, drought conditions, competition for local water resources, or water use regulatory restrictions could limit our ability to obtain sufficient cooling water, limit data center cooling capacity, increase our costs, delay or limit the expansion of our data center infrastructure, or require us to use alternative cooling methods that may be more expensive or less available.”
It is not clear what prompted SpaceX to add this language about water to its filing, or why it was left out of the original version. The company is in the pre-IPO phase, where the Securities and Exchange Commission (SEC) has been sending SpaceX “comment letters” seeking clarification or more information about the filing. It’s possible that questions from the SEC led to this particular change, though we won’t know until those comment letters are made public in the weeks following the IPO.
Adding more information about SpaceX’s water access wasn’t the only change the company made in this first amended filing. SpaceX also revealed that it is setting aside up to 5% of the stock being sold in the IPO to employees and friends of executives. SpaceX also added language warning investors that the company may issue a “significant” number of shares in future transactions following the IPO – a reference to a possible merger with Tesla – which could cause dilution to existing shareholders.
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