The AI business of SpaceX has performed better than expected.
TechCrunch
1h ago
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SpaceX's data center and Grok's proxy business achieved profitability that exceeded investors' expectations in the second quarter. The company's revenue for the third quarter was $14.6 billion, with artificial intelligence business now accounting for 52% of its income, but capital expenditures also reached $19.6 billion.
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The data center of SpaceX and the Grok proxy achieved profitability in the second quarter of this year that exceeded investors' expectations. This is because the company is gradually moving away from its origins as an "aerospace company" and focusing on artificial intelligence, which now accounts for 52% of its revenue.

Elon Musk's deep-tech group disclosed in regulatory documents on Tuesday that its revenue for the third quarter was $14.6 billion. This figure benefited from growth in all business segments, especially its rebranded “Super Intelligence” business line. This business line includes the recently acquired Cursor programming tools, Grok robots, and the most important one, which is rapidly expanding: the neocloud business; the latter currently has 1.7 gigawatts of computing power.

Total revenue was also boosted by approximately $1 billion in income, which is related to the rebound in Bitcoin prices. In addition, there was another amount of income from related parties that was not specifically mentioned, which may be attributed to SpaceX's investment in another company.

While revenue grew, the company's total capital expenditure reached $19.6 billion. SpaceX continued to advance the second data center project Colossus II, and increased investment in Starship. This heavy-lift rocket is regarded by the company as key to deploying a new generation of Starlink satellites as well as developing orbital data centers.

During the discussion about performance, Musk stated that he spends four days a week in Memphis, Tennessee, which is also the location of Colossus II, to push for the launch of that data center.

"People are starting to realize that the bottlenecks in deploying superintelligence lie more in electricity, cooling, and infrastructure, rather than chips," Musk said, and noted that he has assigned a team of SpaceX engineers to address this issue. "It's a bit like the New York Yankees going to a minor league game. It's not fair, but in the end, we will be able to deploy electricity and cooling infrastructure at a speed far faster than anyone else."

Despite high capital expenditures, the company's revenue growth was sufficient to push it back into profitability. SpaceX reported a net profit of $4.4 billion, reversing a loss of $1 billion from the same period last year. However, if the company hopes to remain profitable for the entire year, it still has work to do. Based on the first nine months of this year, SpaceX still recorded a net loss of $413 million.

CEO Elon Musk holds a particularly optimistic attitude towards the company's Superintelligence business segment, predicting that by the end of 2027, the annual recurring revenue of SpaceX will reach "between $500 billion and $1 trillion".

This is a dynamically updating report. TechCrunch will continue to be updated.

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