Shares in Elon Musk’s SpaceX tumbled after the company’s first-ever earnings report revealed a huge jump in spending on artificial intelligence, spooking investors.
While the firm’s quarterly revenue had nearly doubled to $7.8bn (£5.8bn) from a year earlier, its spending ballooned to $18.3bn, more than six times what it was a year ago, the bulk of which was for AI.
The firm builds space rockets and Starlink internet satellites as well as owning the social media platform X. It began trading on the US stock market in June.
Its stock fell 9% on Wednesday morning. Musk said during an investor call after the results that people seemed to be “underestimating” SpaceX.
Overall SpaceX made a net loss of $143m in the three months to June, and a loss of $2bn during the first six months of the year.
However, Musk cited Starlink, the one part of the company that is currently making a profit, bringing in $1.6bn in the second quarter. Musk said he expects that business to grow exponentially in the coming years.
“It’s not out of the question that, at some point, Starlink will operate most of the world’s internet,” Musk said.
He also spoke of an expected and rapid growth of SpaceX’s emerging line of business selling compute power needed for artificial intelligence (AI) projects to other companies, which currently include Google and Anthropic.
Although SpaceX currently has 1.4 gigawatts of such compute power ready to use, Musk said that sometime next year that capacity should hit at least 10 gigawatts through its ongoing development of data centres.
Musk said during the call: “Data centres are a trivial problem compared to making reusable rockets.”
Making rockets is SpaceX’s core business, but the company’s space segment showed a $542m net loss against $962m in revenue for the second quarter.
SpaceX’s AI business also lost $1.2bn during the quarter, on revenue of $2.5bn.
Bret Johnson, head of finance for SpaceX, said during the call that the company’s capital spending would continue at a “very similar” level for the rest of the year.
Nevertheless, Musk said that SpaceX would likely hit $1tn in revenue by 2030, a year earlier than he thought just six weeks ago.
Despite this optimism, shares of SpaceX fell in after hours trading on Tuesday, wiping out gains made during the day.
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