SpaceX Q3 revenue soars 161% YoY on AI business growth, beating estimates

However, SpaceX’s AI software offerings, including xAI’s Grok, have yet to match the traction of rivals such as OpenAI, Anthropic and Google.For live updates on US Markets, click hereSpaceX generates most of its AI revenue by leasing data-centre computing capacity to developers, including Anthropic, Google and Reflection AI, rather than relying on its own AI models. This makes the business more akin to a cloud-computing provider than a traditional AI developer.Live EventsIts AI operations span Grok, the social-media platform X and an expanding data-centre business, which has also become the company's largest investment area.

Revenue comes from computing contracts with Anthropic, Google, owned by Alphabet, and Reflection AI.However, the AI division continues to incur substantial operating losses. SpaceX has warned that significant, sustained spending will be necessary before the business can achieve consistent profitability.Meanwhile, Starlink continues to add subscribers, supported by further satellite launches and an expanding portfolio of services for consumers, businesses, airlines, maritime operators and government agencies.SpaceX has warned that expanding into markets beyond wealthier countries could bring down its average revenue per user over time.

Investors are monitoring whether this pressure is beginning to emerge as the company enters more international markets and introduces cheaper subscription plans.Another key concern is whether SpaceX can sustain its growth while improving network profitability. The company continues to invest heavily in expanding coverage, increasing capacity and developing direct-to-device mobile connectivity services.Meanwhile, Starship, SpaceX’s next-generation reusable rocket system, has yet to begin commercial operations.

The vehicle is expected to help deploy more advanced, higher-bandwidth Starlink satellites and support AI-computing infrastructure in orbit. Achieving reliable, repeated reuse of Starship remains a crucial part of SpaceX’s long-term strategy.SpaceX deployed several Starlink satellites last month during Starship’s first orbital test flight, which ended earlier than planned following an engine problem.The company’s space operations cover commercial launches, government missions and the development of Starship, making the segment a major source of expenditure and uncertainty.

While Falcon rocket launches have remained strong, revenue fluctuates depending on the balance between internal Starlink deployments, commercial launches and government contracts.SpaceX has increasingly prioritised launches for its own satellite network over missions carrying third-party payloads, while continuing to shoulder substantial costs associated with Starship’s development.Investors will also be watching for comments from CEO Elon Musk on a potential merger between SpaceX and Tesla, a widely discussed possibility.

Tesla is scheduled to report its results on Wednesday.(Disclaimer: This article is based on inputs from agencies. These do not represent the views of The Economic Times)(You can now subscribe to our ETMarkets WhatsApp channel)