Elon Musk announced SpaceX will be exclusive to Nvidia for all future AI systems on Earth and in orbit.
SpaceX's stock declined nearly 10% during pre-market trading on Wednesday despite narrowing Q2 losses to $0.09 per share from a $0.34 loss a year earlier, as revenue surged to $7.81 billion year-over-year from $4.07 billion.
Countering the sell-off, Elon Musk's public endorsement of Nvidia as SpaceX's exclusive AI infrastructure provider boosted the chipmaker's stock by approximately 1.8% in pre-market hours. On X, Musk stated that SpaceX has committed to using Nvidia GPUs exclusively because they represent the best available technology. He reposted joint announcements from Nvidia and SpaceX regarding development of the Starmind AI1 satellite compute payload, which employs Nvidia's Rubin GPUs and Vera CPUs.
During the Q2 earnings call, Musk elaborated: "We believe that the Vera Rubin architecture is the best architecture... is the best AI computer... So we're exclusive to Nvidia." He disclosed that SpaceX intends to end 2026 with over 2 gigawatts of compute capacity and targets 10 gigawatts by the end of 2027. The company plans to deploy Nvidia's Vera Rubin NVL72 rackscale system both on the ground and in space as part of its Starmind satellite programme.
SpaceX's Q2 AI revenue more than tripled to $2.56 billion from $737 million a year earlier, driven by momentum in cloud service agreements and increased subscriptions to Grok and X. The company has also entered leasing arrangements with Google and Anthropic, providing data center capacity for their AI services in exchange for billions of dollars annually.
The stock decline since SpaceX's mid-June IPO has reduced Musk's wealth to below $800 billion from over a trillion dollars weeks prior. Q2 results continue to pressure valuations, with capital expenditure rising sharply to $18.37 billion from $2.83 billion a year earlier—a 6.5-fold increase that exceeded analyst expectations. AI spending jumped 21-fold to $15.83 billion from $749 million year-over-year.
SpaceX CFO Bret Johnsen attempted to address investor concerns, noting that the company has operated "efficiently" with AI capital deployment achieving "less than a one-year payback." Nevertheless, the stock faces additional headwinds from the expiry of the initial insider share-lockup period this week, which allows employees and early investors to sell for the first time since the June listing. Approximately 912 million insider-held shares become eligible for trading after the August 6th restriction ends, more than doubling currently available public shares and potentially increasing volatility. This milestone presents many employees and early investors with decisions on whether to liquidate equity holdings accumulated during their tenure or maintain their positions as stock prices continue declining.