SpaceX earnings: renting AI computers now outearns Starlink

SpaceX’s AI arm, now called the Super Intelligence segment, brought in about $7.6 billion in the quarter, more than half the company’s total. A year earlier it was a fraction of that: AI revenue grew more than ninefold.

Most of that money doesn’t come from Grok, the chatbot that came over from xAI. It comes from leasing out server space to AI developers, with Anthropic, Google and Reflection AI among the named customers. In other words, SpaceX is acting more like a cloud provider, the kind of company that rents out servers, than like an AI lab.

The segment also includes Cursor, the AI coding tool SpaceX bought in a deal that closed on August 14. Cursor added $608 million in revenue in its first partial quarter. Chief financial officer Bret Johnsen said customers keep asking for more computing power and that new deployments are paying for themselves in less than a year.

The headline numbers beat expectations across the board:

• Revenue: $14.58 billion, against analyst estimates of about $12.7 billion.
• Profit: more than $4 billion, after a loss of over $1 billion a year earlier.
• AI segment operating income: $431 million, after a $1.26 billion loss the quarter before.
• Shares: up around 9% in early trading the next morning.

Starlink ended the quarter with 13.6 million consumer subscribers, up 89% from a year earlier, after adding 1.6 million in three months. SpaceX president Gwynne Shotwell said the service is now active in 174 markets, with Vietnam and Uganda the latest additions.

The catch is in the average bill. Average monthly revenue per subscriber was $69 in the quarter, down from $83 a year ago and $99 in 2023. SpaceX says that is deliberate: it is expanding into lower-income countries and selling cheaper plans. For customers in the US, UK and Canada, that is a sign the company now competes on price, not just coverage.

Starlink is still the steadiest moneymaker. The connectivity business earned about $2.4 billion in operating profit on $5.2 billion of revenue, a 45% margin. More than 3,800 aircraft had Starlink installed by September 30, and another 12,000 are under contract, so the odds of getting usable Wi-Fi on your next flight keep improving.

If you use Starlink, the company’s growth is mostly good news: more satellites, more capacity and more plan options. The open question is whether SpaceX keeps investing in home internet as eagerly when renting AI computers pays so well. Executives said they will steer their computing capacity toward whatever earns the highest margin.

If you use AI tools, SpaceX is now one of the companies quietly supplying the horsepower behind them. Its installed computing capacity reached 1.7 gigawatts at September 30, up from 1.4 gigawatts in June and 0.6 gigawatts a year earlier. That kind of scale helps explain why AI services can keep adding features, and why the race for power and chips is so intense.

Building that capacity is extraordinarily expensive. SpaceX spent $19.6 billion on equipment and buildings in the quarter, and $16.4 billion of it went to AI computing. Management now expects fourth-quarter spending of $35 billion to $40 billion, roughly double.

So far this year, spending has far outrun the cash the business generates. Over nine months, capital spending hit $48.1 billion against $13.1 billion of operating cash flow, with money raised in the company’s stock market debut filling the gap. SpaceX held $51.3 billion in cash at September 30, plus investments, against about $38.8 billion in debt.

Musk was characteristically bold on the call, saying the company could be bringing in somewhere between $500 billion and $1 trillion a year on a recurring basis by late 2027. Treat that as a goal, not a forecast. The company’s own guidance is more concrete: $33 billion to $37 billion in revenue for the first quarter of 2027, based on compute contracts already in its pipeline.

Launches now play a supporting role in the numbers. Starship, the giant reusable rocket meant to carry bigger Starlink satellites and even orbital computing hardware, still isn’t in commercial service. Musk said the next flight, Mission 15, will try to catch both the ship and its booster, adding that success is not guaranteed.

Analysts also asked about a possible merger with Tesla. Musk said both companies have formed special committees of independent directors to study the idea, that he can’t take part because he is conflicted, and that people shouldn’t assume a deal is certain, though he thinks it would be a good idea.