SpaceX’s data centre deals boost revenue by 161%

SpaceX said quarterly revenue surged 161 per cent as deals to lease out its data centres turbocharged sales and profits, helping offset Elon Musk’s rockets-to-AI conglomerate’s heavy investment in AI.

Revenue more than doubled to $14.6bn in the third quarter, up from $5.6bn a year ago and beating analysts’ estimates for $12.9bn, the company reported on Tuesday.

SpaceX swung to a net profit of $4.4bn in the three months to the end of September, exceeding Wall Street’s expectations of about $2bn. It made a net loss of $1.1bn in the same period last year.

The outperformance was driven by sales of cloud computing services, with revenue from AI surging ninefold to $7.6bn from $813mn a year ago and tripling from $2.56bn in the previous quarter.

SpaceX continued to spend heavily on AI. Capital expenditure rose to $19.6bn from $18.4bn in the prior quarter and more than consensus estimates of $18bn compiled by FactSet. AI-related capex accounted for the vast majority of the investment.

Musk, SpaceX’s chief executive and the world’s richest person, has rapidly transformed the company into an AI data centre provider, striking deals to lease its excess computing capacity. Rival model developers, notably Anthropic and Google, have proven willing to pay premium prices to secure access to the chips needed to train and run their models.

SpaceX said it had 1.7 gigawatts of installed computing capacity at the end of September. The size of its pair of Colossus data centres now surpasses the 1.5GW of active power that CoreWeave, the largest listed “neocloud”, had online at the end of June.

On a call with investors, Musk said he would be “surprised” if SpaceX did not have 13GW by the end of next year, with a “small, non-zero possibility” that capacity could reach 20GW.

Its shares rose 4.5 per cent in after-hours trading.

Musk’s opportunistic move into renting out data centres has grown into a lucrative business but has led to concerns that SpaceX’s internal AI efforts are failing to gain traction.

The earnings report is the second since the rocket-and-AI group raised $86bn in the largest initial public offering ever in June at a $2tn valuation. The shares initially surged but have tumbled from a peak of $225 in the week after going public to $148 on Tuesday.

Revenue from Starlink, its 11,000-strong network of broadband satellites, rose to $5.2bn from $3bn the year before and reported net income of $2.4bn in the quarter.

SpaceX’s launch business rose to $1.8bn, but it made a small loss during the period. Last month, its skyscraper-sized rocket Starship reached orbit for the first time, deploying 26 Starlink V3 satellites that it says will significantly increase the network’s capacity.

The 400ft rocket is core to Musk’s sci-fi ambitions to build a network of orbital AI data centres, start a lunar economy and colonise Mars. On Tuesday he said SpaceX would attempt to catch the booster and spacecraft stages with mechanical “Mechzilla” arms during the next test flight in November.

Bret Johnsen, SpaceX’s chief financial officer, said: “The combination of our launch leadership, recurring Starlink revenue, and the significant expansion of our [AI] infrastructure continues to drive meaningful operating leverage.”

Investors are also weighing the probability of Musk merging SpaceX with Tesla after previously consolidating parts of his business empire, which includes social media platform X and his AI lab, xAI.

The electric-car maker has been closely collaborating with SpaceX, including on Terafab, a massive semiconductor manufacturing initiative in Texas that could ultimately cost $119bn.

When questioned about a potential merger on Tesla’s last earnings call, he said any deal would have to take place under the “appropriate process”.