SpaceX revenue rockets while AI spending burns billions SpaceX beat revenue forecasts in its first results as a public company, but surging AI expenditure and another quarterly loss left investors unimpressed. In unrelated but appropriately-timed space news, a discarded SpaceX rocket body is believed to have struck the Moon this morning. SpaceX's figures show revenue rising sharply …
And this is why we can not have nice things.
I used to be exited about SpaceX, finally seeing a future in space exploration and utilization.
Then Elon self radicalized on drugs and yes-men, and now the millstone of the AI Bubble has been firmy attaced to SpaceX.
And as a result I can neither have space exploration nor a decent new PC where I can pretend to explore space.
Bummer
Good news! You will not have a use for a decent new PC because AI will be hogging all the power. Instead, go for board games and candles.
SpaceX still does some quite impressive stuff, but you are right, using it as a cash-cow for xAI is going to bring it down.
How many of Elon’s enterprises are actually profitable? Starlink, Space X? Whatever happened to the Boring Company? Tesla, once the golden child, now, not looking too healthy!
There is a limit to how much you can ‘work the figures’ and keep investors on board, but eventually the whole lot implodes - and when it does, it won’t be pretty.
But neither mind, he will be bailed out by the US taxpayer as SpaceX has strategic importance, enough for a new yacht for him, less social care for the US ‘little people’.
If SpaceX does implode and is really of US strategic importance, then it’s obvious what to do, nationalise it, Act of Congress, take it into State control without compensation to shareholders; no the company you had shares in has gone bust, sorry, you have lost your money - it’s called Capitalism! But for national security issues, we need to keep it running but as a national asset.
Yes I know, a bit socialist and anathema to the perceived wisdom of many in the US.
I suspect though it’ll be a taxpayer bailout, shovel a few extra billions Elon’s way.
If SpaceX does implode and is really of US strategic importance, then it’s obvious what to do, nationalise it, Act of Congress, take it into State control without compensation to shareholders; no the company you had shares in has gone bust, sorry, you have lost your money - it’s called Capitalism!
I doubt that would happen, because as you say, Capitalism! I think it would be far more likely to do the Ch.11 thing. Then do a reverse-Musk and unbundle SpacX, with the launch business & Starlink going to one of the usual suspects & large donors. But Starlink is probably the most lucrative bit, especially-
https://en.wikipedia.org/wiki/SpaceX_Starshield
Which started with a $1.8bn contract with the NRO, and the cynic in me would suggest that Starshield, not Starlink accounts for the majority of the 'Starlink' revenues. So either way, the space tentacles would still heavily rely on US taxpayer funding.
Tomorrow/Thursday might get a bit interesting given the lock-up unlocks, and there'll be more shares in play.
"But Starlink is probably the most lucrative bit, especially-"
Not really. It's like having a dairy business with a division for the cows and one for sales of milk. Jigger the books and the cows are a loss and the milk makes money. There's no sense in that. Jigger the books and SpaceX loses loads and Starlink is said to be making money. Not that we get to see accounting details that might show Starlink being subsidized through things being accounted for elsewhere and launches charged at cost rather than retail prices. Starlink is also far from being fully built out with some satellites aging out. The cost to keep the constellation filled out will never end and isn't cheap. I could keep fixing a CNC lathe to extend its life and it will be a productive capital asset the whole time. When a satellite's time is up, there's no fixing that, no milking another couple of years out of it. It ceases to be a productive asset and due to the nature of the business, it has to be replaced.
Not that we get to see accounting details that might show Starlink being subsidized through things being accounted for elsewhere and launches charged at cost rather than retail prices.
Or Tesla buying a lot of AI. Or SpacX buying a lot of Cybertrucks. But I think Starshield and Golden Dome contracts are the cash cows, but a simpler structure just with the space assets would make it more obvious that there's a lot of 'dark' money floating around from classified projects that people would prefer to stay off the books, or could be lost in the noise of all the other entities that make up SpacX.
Space Charges connectivity $20M per launch. Add another $50M to get to commercial prices then multiply by 200ish launches per year and you get $1B. That would be a an impressive profit for Falcon without putting a serious dent in Starlink revenue. Starlink can also comfortably fund Starship. SpaceX is building out launch infrastructure and manufacturing capacity as if massive orbital data centres were a good buy. Starlink revenue can also buy the large chunks of spectrum SpaceX has been snapping up.
The place SpaceX goes into massive debt is AI data centres. Data centre spending massively exceeds Starlink revenue. They generate some income by being leased out to real AI companies but that is a competitive market propped up by investors not customers.
"then multiply by 200ish launches per year"
Multiply by 10 launches, not 200. Over 80% of what SpaceX launches is Starlink so they aren't making gobs from paying customers, which means that Starship isn't being comfortably funded at $100mn/crash.
Orbiting data centers are the Roadster 2.0 of the space business. Until they happen, don't place any bets.
"But neither mind, he will be bailed out by the US taxpayer as SpaceX has strategic importance, enough for a new yacht for him, less social care for the US ‘little people’."
Not so much. If you look at the launch lists, the vast majority of what SpaceX launches is Starlink. The do very few customer launches of which TLA launches are an even tinier subset. SX could go away and Firefly might be expidited through some certifications. Relativity is prepping for the first launch of their Terran rocket. ULA is still around, etc etc. With the retirement of ISS not too long in the future, reliance on SX is waning.
"It's not out of the question that at some point Starlink will deliver a majority of the world's internet,"
Sure, I'll file that along with Hyperloop, FSD, Martian colonies and everything else only the gullible investors believe.
Actually, they aren't gullible, only if the hold onto the shares before they crash are they gullible.
Musk followed that quote with weasel words the Shotwell walked it back. Musk has gutted the SEC and has the remaining employees' home addresses from stolen payroll data. With that much power he should be able to lie like a president instead of this wimpy wittering.
"everything else only the gullible investors believe."
Patrick Boyle recently published a video with some interesting observations. A lot of the mega companies that people are falling for are publishing the bad news, but they are doing it in a way that's legally adequate to meet disclosure requirements, but make somebody work very hard to tease the sums out so they can be analyzed.
The gullibility is partially due to many retail investors being too lazy or not suspicious enough to dig out the real story. This reminds me of some courses I took about breaking down a contract to find the slippery slopes to avoid. That has come in handy. If I were more of an investor, I'd be spending time teasing out the real numbers vs what the narrative is trying to infer. The best lies are the ones that aren't really lies, just misdirection.
It's just yet more wealth extraction, this time from retail investors more into vibe trading and the cult of personality instead of reading footnotes. The stock dropped after debt refinancing and real investors cashing out, but that was what was supposed to happen.
The plan was to ignore the requirements (3 profitable quarters) for being included in the big index funds. S&P refused to bend over. If they had they would have been selling a small percentage of everything in the index to buy SpaceX. Demand would have exceeded supply and the priced would have jumped up. As it is demand cannot sustain the IPO price. Next up employees are going to cash out at their first opportunity instead of trying to ride it like a meme stock.
They do care. Starship has burned a boatload of captal but that dwarfed by AI expenditure. Starlink and Falcon can fund Starship at least four times over. They do not supply a quarter of the cash going on AI.
Investers care so much they are shorting the stock: a third of the current trades are shorts.
There's one benefit to SpaceX spending all those billions on Artificial Ignorance infrastructure - when the bubble bursts (which has already begun), those billions are going to come out of their pockets and, more importantly, Musk's. Hopefully that will be the end of him buying elections for despots and morons like Der Pumpkin Fuhrer. And make no mistake - the only reason Drumpf is in the hot seat is Musk bought the election for him by spending hundreds of millions on advertising and donations. You Americans can blame all your problems on Musk. All of them.
I've stopped following Twitter, and the (mostly) knuckle draggers I see using Grok to answer something they could easily discover with a functioning brain don't impress, when I occasionally pop back on (and regret it)
Off Twitter the LLM arguments rage but no-one, *absolutely no-one* is talking about Musk's 'AI' offerings when debating the benefits or otherwise of LLMs.
The only things I hear about Grok are moronic questions (see above), and repeated notes of it still creating abusive images.
