SpaceX made more revenue as an AI company than a space company

SpaceX’s AI revenue grew more than three times to $2.6 billion from the year before, mostly because of deals that the company made to provide compute to other AI companies, according to SpaceX’s quarterly earnings. The AI division, which the company said in its documents to go public was the source of most of its value, lost $1.5 billion this quarter, slightly less than in the same quarter last year.

SpaceX made deals with Anthropic in May and Google in June to provide compute to the other two AI companies, putting it in competition with other neoclouds such as CoreWeave. The increased presence in AI is also driving the company to spend more — capital expenditures reached $18.37 billion.

“We’re building AI compute capacity at scale faster than anyone else, we believe, and we’re significantly improving our AI models,” Elon Musk said on an investor call.

Despite its name, SpaceX said in the documents for its IPO that it expected most of its value to come from AI. SpaceX had the biggest-ever IPO in June. One of the things that the company said it could do better than anyone else was build data centers in space. The company has three segments: space, AI, and “connectivity,” which is the Starlink internet service. Space had $962 million in revenue this quarter, and SpaceX remained the biggest user of SpaceX rockets. The Starlink service had $4.2 billion in revenue.

Grok, SpaceX’s AI model that has been in hot water for undressing women and children without their consent, had fallen far behind other companies in the AI race. So before the IPO, SpaceX rented out the data center capacity it had initially built for itself. The company also agreed to acquire Cursor, providing it with an enterprise AI product. The acquisition has not yet closed, though Musk said on the call they’re “close to that,” but didn’t want to “jump the gun” on regulatory approval.

SpaceX is still losing money, but the loss this quarter narrowed to $143 million dollars. Musk’s grandiose plans — data centers in space, an addressable user market of more than the US GDP — don’t just come with a big price tag in AI. The costs of developing technology in its space division also rose by $389 million from the year before, with Starship as the primary driver of spending. Starship is key to Musk’s plan to expand its connectivity business, the only profitable part of the company.

Starship has to be able to launch heavier versions of the satellites that make its Starlink internet business profitable. Some of these satellites have already been manufactured, and in today’s documents, SpaceX said it had launched 20 of them. It’s not clear how far away the full deployment — of 60 satellites at once — is.

Though SpaceX beat analyst estimates, according to Bloomberg, its shares declined after market, following an initial pop of enthusiasm.

Update 5:40PM ET August 4th: Adds revenue from space and connectivity sectors of the business, as well as details on SpaceX’s history with AI, and details from the investor call.