SpaceX has added new language to its IPO filing warning prospective investors about the company’s access to water, a potentially scarce resource.
The company, which owns Elon Musk’s AI business xAI, wrote in a revised filing Monday that access to the water needed to cool data centers is just as important as SpaceX’s ability to secure power, processors and other critical resources.
The addition comes amid a constantly evolving debate about how much water data centers use and whether that usage is contributing to localized droughts 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 expanding its AI infrastructure.
SpaceX has previously focused on telling investors that its data centers are constrained primarily by access to “power at economically viable prices,” as well as long construction schedules and material shortages. The amended filing adds multiple lines regarding water access. SpaceX is now telling potential IPO investors that data center construction will be constrained by “the availability of power and water at economically viable prices.”
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 “key consideration in data center site selection, development, and operations.”
SpaceX also said that “water scarcity, drought conditions, competition for local water resources, or regulatory restrictions on water availability could limit our ability to obtain sufficient water for cooling, limit our data center cooling capacity, increase costs, delay or limit expansion of our data center infrastructure, or require the implementation of alternative cooling technologies that are more expensive or less available.”
It’s unclear what prompted SpaceX to add the water language to the file, or why it was left out of the initial version. The company is in its pre-IPO period, and the Securities and Exchange Commission (SEC) has sent a “comment letter” to SpaceX seeking clarification and additional details regarding the filing. Questions from the SEC may have led to this particular change, but we won’t know until comment letters are published in the weeks following the IPO.
Adding details about SpaceX’s water access wasn’t the only change the company made in this first amended filing. SpaceX also said it would set aside up to 5% of the shares sold in the IPO for employees and friends of executives. SpaceX also added language warning investors that the company may issue a “substantial” number of shares in a future transaction after the IPO (alluding to a possible merger with Tesla), which could cause dilution to existing shareholders.
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