SpaceX may still be defined in public imagination by rockets, launches, and plans beyond Earth. Its first quarterly earnings statement as a public company points to a different center of gravity: Starlink connectivity and the business of renting compute to AI companies.
The result is a company whose space identity remains powerful, but whose reported revenue mix is moving toward telecom and data center capacity. Rockets still matter, but they are not the whole story, and in this quarter they were not the largest one.
Rockets are no longer the main revenue story
The space sector of the business did not break a billion dollars this quarter and contributed only a touch over 10 percent of the company’s revenue. SpaceX also remains its own biggest customer, which limits how much the rocket business can explain the company’s overall financial direction.
That matters because the company’s brand, ambitions, and public narrative are still built around space. The earnings picture, however, shows a business whose strongest current revenue lines are elsewhere.
The source article frames SpaceX as primarily a telecom company and a company that rents compute, based on the earnings statement. That is a sharp shift in how readers should understand the company: not only as a launch provider, but as an infrastructure business tied to internet access and AI demand.
Starlink is the profitable bright spot
SpaceX calls its telecom segment “connectivity.” In practice, that means Starlink, the satellite internet service. Starlink had $4.2 billion in revenue and was the only part of SpaceX that did not have a loss from operations.
On the call, Gwynne Shotwell outlined plans for a phone service meant to compete with AT&T, Verizon, and T-Mobile. That would extend the connectivity business from satellite internet into a broader communications market, at least as described in the earnings discussion.
Elon Musk also said on the earnings call that Starlink will deliver “a majority of the world’s internet.” The source article treats that claim skeptically, but the reported numbers still make clear why connectivity is central: it is large, it is producing operating gains, and it sits closer to the company’s present financial strength than the space segment does.
AI compute has become the biggest spending focus
The bigger strategic turn is around what SpaceX is calling “AI,” including compute capacity connected to xAI and Grok. Analyst Alexander Potter expects spending on the neocloud business, which leases data center capacity to AI companies, to climb to $65 billion next year, $17 billion more than he had previously estimated, according to Bloomberg.
The second quarter spending numbers show how dominant this area has become. SpaceX spent $15.8 billion on AI alone in the second quarter. By comparison, spending on the space and connectivity sectors was a touch over a billion each.
That scale puts SpaceX in the same broad market as neocloud companies such as CoreWeave and Nebius. The business is straightforward in concept: build or control data center capacity, then lease it to companies that need compute for AI work.
The source article says this was not originally the plan. Musk built SpaceX’s Colossus 1 data center in Memphis for Grok, but xAI had trouble running the complex and decided to rent it out instead. The center faced latency issues that made it hard to train in-house models, and a mix of newer and older chips created bottlenecks.
On the earnings call, Musk said that only 10 percent of the compute SpaceX builds will go to Grok. That statement helps explain the pivot: the infrastructure built for internal AI work is being positioned as a broader compute leasing business.
The ARR target is large, but costs remain central
SpaceX now has deals with Google, Anthropic, Reflection AI, and Cursor, an AI company Musk eventually chose to acquire. On the second quarter earnings call, SpaceX chief financial officer Bret Johnsen said those deals put the company “on a trajectory, including contribution from Cursor, to reach $100 billion of ARR, or annualized revenue run rate,” a measure used to estimate yearly revenue from a shorter period.
Musk was more direct, saying that “the $100 billion ARR in December is not a question mark,” and that the actual ARR might be higher. Those are major revenue claims, but the source article stresses the obvious financial caveat: revenue is not the same as profit.
Building data centers is expensive. The bare-metal business of renting compute also faces obsolescence, construction uncertainty, and cost competition. The more data centers are built, the more compute becomes available; with more compute available, companies have less room to charge as much for chips.
Space data centers remain an unproven vision
Musk has said he took SpaceX public because he wanted to build data centers in space. SpaceX has proposed an orbital data center consisting of as many as 1 million satellites to the Federal Communications Commission, though the application is described as light on technical details, including satellite size and deployment schedule.
Musk has also released drawings tied to that idea. In the vision described in the source, a Musk-owned chip producer called Terafab would produce one terawatt of chips every year, and A billion Optimus robots would do the work.
The claimed end goal is to build a mass accelerator on the Moon. But the source article’s practical conclusion is narrower: strip away the future-facing claims, and SpaceX currently looks like a company launching rockets mostly for itself, operating a successful satellite internet business, and running a risky, capital-intensive compute leasing business after problems with its in-house AI.
There is also a link to Tesla. SpaceX provides Tesla with an important customer, buying $295 million in Tesla Megapack battery storage, and it has also been buying Cybertrucks. As of the source article’s writing, Tesla stock is down 25 percent since January of this year.
SpaceX’s insider lockups start expiring on August 6th. That timing makes the earnings picture more than a snapshot. It is a test of how investors and insiders read the company: as a space company, a Starlink-driven telecom business, an AI compute infrastructure bet, or all three at once.