Elon Musk’s SpaceX, once considered primarily a rocket company, has transformed into something quite different following its recent merger with xAI. The newly combined entity now derives the majority of its revenue from telecommunications and data center operations rather than space exploration. According to the company’s first earnings report as a public entity, the space sector contributed just over 10 percent of quarterly revenue and failed to generate a billion dollars on its own.
Starlink, SpaceX’s satellite internet division, emerged as the company’s most profitable segment, generating $4.2 billion in revenue and representing the only operationally profitable business unit. Meanwhile, the acquisition of xAI has shifted corporate focus dramatically toward data center infrastructure and computing resources. Analysts project spending on data center operations to reach $65 billion in the coming year, significantly exceeding earlier forecasts and vastly outpacing investment in space and connectivity initiatives.
The financial reorientation raises questions about the company’s original mission. SpaceX continues to be its own largest customer for rocket services, with insufficient external demand to drive that sector’s growth. The company’s Colossus 1 data center in Memphis, initially built to support Grok’s artificial intelligence operations, now primarily leases capacity to external customers rather than serving internal needs. This pivot suggests the company’s future depends more on computing infrastructure than on space technology.
Originally reported by Theverge →
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