From Al Root at Barron's, August 31:
GE Vernova stock might be facing a new threat: Elon Musk.
His rocket and AI company, SpaceX, might start producing turbine blades for power generation applications, according to a report from The Information, which cited sources. SpaceX and GE Vernova didn’t immediately respond to requests for comment.
GE Vernova stock traded as low as $882.14 before recovering to $896.94, down 1.6% in early trading, while the S&P 500 and Dow Jones Industrial Average were off 0.4% and 0.6%, respectively.
Investors might be worried about disruption, with SpaceX turning its engineering might toward a new industry. That might be the knee-jerk reaction, but investors might want to think twice.
For starters, turbine blades are some of the most highly engineered, complex parts manufactured in the U.S. They are made of superalloys and are able to withstand temperatures in excess of the blades’ melting point, with tiny cooling channels built into structures that are maintained to tiny tolerances. GE Aerospace, which makes jet engines, and GE Vernova, which manufactures power turbines, have spent decades investing in and refining the technology.
What’s more, SpaceX might only be making blades, which, if successful, would be a part for GE Vernova. SpaceX would do all this because it sees a lasting bottleneck in blade production that would become a barrier to faster AI adoption. Bottleneck mitigation is why SpaceX is building a semiconductor manufacturing facility with Tesla....
....MUCH MORE
Mr. Root gets it. The paragraph that begins with "For starters, turbine blades are some of the most highly engineered, complex parts manufactured in the U.S." is what I was trying to communicate in "SpaceX starts in-house turbine blade manufacturing to boost gas-powered generator output for Elon's AI data centers — new manufacturing strategy cuts generator delays by 18 months".