SpaceX shares fell 10 percent in early trading after the company reported capital expenditure of almost $16 billion on AI, double the previous quarter and well above Wall Street’s expectations. The earnings report came after SpaceX raised $86 billion in a historic initial public offering in June, which was underpinned by expectations of meteoric revenue growth. The company posted quarterly revenues of $7.8 billion, surpassing analysts’ estimates of $6.82 billion, but reported a net loss of about $541 million, better than estimates of $2.12 billion. The drop in shares followed a surge after the IPO, with the stock shedding around half its value from a peak of $225 to $112 on Wednesday. SpaceX’s shares initially surged but have since lost value, reflecting investor concerns over its ambitious AI spending. Source: arstechnica
SpaceX’s AI revenue more than trebled from the previous quarter to $2.56 billion, with the majority of that coming from deals to lease data center capacity to rival AI groups including Anthropic and Google. This approach has boosted short-term revenues while limiting SpaceX’s capacity to train and run its own competitive AI models. Musk said the company would increase its computing capacity from 2 gigawatts at the end of this year to “closer to 10GW [than 5GW]” by the end of 2027. Each gigawatt of new capacity costs tens of billions of dollars to develop, with the bulk of that spent on chips. Musk announced that he would rely exclusively on Nvidia hardware in future infrastructure development. At the highest end of Musk’s estimate, the company’s data centers would be consuming as much power as New York City at the peak of summer by the end of 2027. Source: arstechnica
Bret Johnsen, SpaceX’s chief financial officer, told investors that the group would generate more than $100 billion in annual recurring revenue by the end of the year, with cloud services accounting for the bulk of its growth. “I think what the investment community wasn’t overly excited about was the capex number in the AI segment,” said Melissa Otto, global head of Visible Alpha research at S&P Global. “It’s ambitious.” SpaceX’s $1.65 trillion market capitalization also hinges on Musk achieving ambitious goals such as reaching Mars with reusable rockets, putting data centers into orbit, and playing a critical role in developing AI. Goldman Sachs, a bookrunner on SpaceX’s offering, expects the company’s AI revenue to increase 100-fold by 2030. Musk said on Tuesday that SpaceX could hit $1 trillion in revenue by the end of the decade. Source: arstechnica
