SpaceX Q2 earnings revealed AI infrastructure revenue ($2.6B) now exceeds core space business; Memphis data center expected to reach 20-gigawatt capacity.
SpaceX's AI revenue surged to $2.6 billion, more than tripling from the prior year, driven primarily by compute capacity deals with Anthropic (May) and Google (June). This positions SpaceX in direct competition with other cloud infrastructure providers such as CoreWeave. Despite the revenue growth, the AI division reported a loss of $1.5 billion this quarter—a slight improvement from the same period last year.
"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.
The company's increased AI focus has driven capital expenditures to $18.37 billion. Notably, SpaceX indicated in its IPO documents that it expects most of its future value to come from AI rather than traditional space operations. With the biggest-ever IPO completed in June, the company outlined plans including data center construction in space.
SpaceX operates three business segments: space, AI, and connectivity. This quarter, the space division generated $962 million in revenue, with SpaceX itself remaining the company's largest rocket customer. Starlink, the connectivity segment, brought in $4.2 billion in revenue—currently the company's only profitable division.
SpaceX's proprietary AI model, Grok, has faced significant challenges and fallen behind competitors in the AI race. In response, before going public, SpaceX pivoted to renting out excess data center capacity initially built for internal use. The company also agreed to acquire Cursor to bolster its enterprise AI offerings, though the deal has not yet closed. Musk indicated they are "close to that" but prefers not to "jump the gun" on regulatory approval.
The company's overall net loss narrowed to $143 million this quarter. However, Musk's ambitious roadmap—including orbital data centers and an addressable market larger than US GDP—continues to require substantial investment. Space division development costs rose $389 million year-over-year, with Starship as the primary expenditure driver.
Starship development is critical to SpaceX's connectivity expansion strategy. The vehicle must reliably launch heavier satellite variants that enable Starlink's profitability. SpaceX has already manufactured 20 of these satellites and reports launching them. Full deployment would involve launching 60 satellites simultaneously, though the timeline for complete deployment remains unclear.
SpaceX beat analyst expectations according to Bloomberg, yet its share price declined in after-hours trading following an initial post-announcement rally.