SpaceX Bets Big on AI as Power Demands Soar

SpaceX pulled in $14.6 billion in third-quarter revenue, with 52% coming from artificial intelligence. By its own numbers, the company that built its name launching rockets is now an AI business first.

TechCrunch reported that SpaceX’s data centers and Grok agents were more profitable than investors expected. It described a company shifting from its roots as a space company toward artificial intelligence. The renamed “Super Intelligence” business line generated $7.5 billion in revenue. It includes the recently acquired Cursor coding tool, the Grok bot and a growing neocloud business with 1.7 GW of compute.

The AI unit made $431 million in profit. The company said that figure would have been higher without $1.2 billion in one-time stock-based compensation expenses tied to the Cursor acquisition.

The Money, and the Machinery

The spending is staggering. Total capital expenditures hit $19.6 billion in the quarter. CFO Bret Johnsen said SpaceX would put $35 billion to $40 billion into new capital investments in the fourth quarter alone. The company is building a second data-center project, Colossus II, and boosting investment in Starship, its heavy-lift rocket, which it sees as key to deploying a new generation of Starlink satellites and developing orbital data centers.

The headline profit needs context. SpaceX reported net income of $4.4 billion for the quarter, against a $1 billion loss in the same quarter last year. But about $1 billion of that income came from recovering Bitcoin prices, plus unspecified related-party income that might be attributed to a SpaceX investment in another company. For the first nine months of the year, the company still shows a net loss of $413 million.

Power, Cooling and Who Pays

On a live-streamed discussion with investors, CEO Elon Musk said he’s spending four days a week in Memphis, Tennessee, the site of Colossus II, working to bring the data center online. He said power, cooling and infrastructure, rather than chips, constrain the deployment of super intelligence.

“This is a bit like the New York Yankees playing in Little League. It’s not fair, but the net result is being able to deploy power cooling infrastructure at a rate that is vastly faster than any anyone else,” Musk said.

The quote is candid. By Musk’s own account, the advantage isn’t a level playing field. He said turbine manufacturers face 12 to 18 month delays in obtaining the metal blades and vanes needed for the machines. SpaceX is using its own metal-casting capabilities, developed for the company, to make those components and get turbines faster.

The base report doesn’t say how much electricity the Memphis site will draw, what cooling it requires or what it means for the surrounding community. Those questions remain open. They matter for a city hosting infrastructure on this scale.

Promises on the Horizon

Musk predicted annual recurring revenue for the Super Intelligence business would reach “somewhere between $500 billion and $1 trillion” by the end of 2027. Johnsen forecast total first-quarter 2027 revenue of $33 billion to $37 billion. SpaceX expects its next Starship test flight in November and plans to try to recover both the first-stage booster and the second stage. Musk called that a “massive technology milestone,” though he said the true milestone would be reflying both stages.

Starlink had 13.6 million consumer subscribers, and Musk predicted AI agents would increase demand for connectivity. The report said the story was developing.

Why This Matters:

When one company can pour $19.6 billion into capital spending in a single quarter and plans $35 billion to $40 billion more, it’s building infrastructure that shapes whole regions and energy systems. Musk himself says power and cooling, not chips, are the bottleneck. That’s a public-resource question: who supplies the power, who bears the strain on local grids, and what oversight applies? The filings don’t answer those questions. They don’t explain the related-party income in the results, either. Forecasts of up to $1 trillion in recurring revenue show how concentrated this wealth and technological capacity could become. Democratic institutions and regulators will have to decide whether they set the terms or simply react.