SpaceX delivered exceptional financial results in its second quarter earnings report, with quarterly revenue nearly doubling to $7.8 billion compared to $4.1 billion in the same period last year. The company beat analyst expectations of $6.93 billion, demonstrating the strength of its core Starlink satellite-internet and artificial intelligence businesses. Operating losses narrowed dramatically to $143 million from $970 million in the previous year, while operating income at Starlink swelled 79%. However, capital expenditures ballooned to more than $18 billion from $2.83 billion a year earlier, with finance boss Bret Johnsen expecting similar spending levels for the next couple of quarters. SpaceX shares fell 7.5% in after-hours trading despite the strong results, as investors focused on the substantial capital requirements ahead. During the earnings call, CEO Elon Musk announced SpaceX has committed exclusively to Nvidia's Vera Rubin architecture, stating "We think it's the best AI computer, and we greatly value our close cooperation and partnership on many levels with NVIDIA. So, we're exclusive to NVIDIA."
SpaceX unveiled its most ambitious AI infrastructure initiative yet, announcing plans to launch Starmind, an AI-focused satellite platform built around Nvidia's Vera Rubin NVL72 architecture, beginning next year. As per Musk, "This is not some sort of a far future distant thing. We expect to start launching these next year." The company expects to end 2026 with more than 2 gigawatts of AI compute capacity, with cumulative capacity potentially reaching close to 10 gigawatts by the end of next year, making it one of the world's largest AI infrastructure operators. The same AI computer design will also be deployed in terrestrial data centres because it would be cheaper, simpler and more efficient than conventional rack-based systems. Chief Financial Officer Bret Johnsen said AI has already become a major growth engine, with the AI business generating $2.6 billion in second-quarter revenue, up 247% year-on-year, driven by cloud computing agreements and growing adoption of Grok. SpaceX also released Grok 4.5 in July, which it described as its most powerful AI model to date, further strengthening its competitive position in the AI computing market.
The company's Starlink revenue rose 66% and now accounts for over half of total revenue, while SpaceX's AI business surged approximately 250%, representing the company's largest investment line item. According to CEO Elon Musk, "We're building AI compute capacity at scale faster than anyone else, we believe, and we're significantly improving our AI models." The AI division generates revenue through contracts with Anthropic, Alphabet's Google, and Reflection AI, though a portion of recurring revenue has yet to be recognized. Average revenue per subscriber slumped 22% from a year earlier as SpaceX entered more international markets and rolled out lower-priced plans, even as subscribers doubled to 12 million. SpaceX President Gwynne Shotwell expects to capture "quite a few" customers from T-Mobile, AT&T and Verizon with the Starlink business. SpaceX also expects to cross a $100 billion annualised revenue run rate by the end of this year, helped by fresh cloud services contracts and continued AI demand.
SpaceX announced a $60 billion agreement to acquire Cursor, aimed at accelerating its AI enterprise opportunity and expanding its capabilities in the rapidly growing AI infrastructure market. The company also closed multiple cloud services agreements during the quarter, resulting in $14.1 billion of contracted sales, demonstrating the strength of its AI platform and enterprise solutions. SpaceX was awarded more than $6 billion in multi-year contracts from the US government for Starshield, significantly expanding its defense and security sector presence. The company completed two successful Starship V3 flight tests in the past 90 days, continuing its progress towards full and rapid reusability as it believes the Starship program will reduce the cost to orbit by 99% or more relative to historical averages.
The exclusive partnership announcement had significant market implications, with AMD shares dropping more than 8% on Tuesday despite posting record quarterly revenue after Musk disclosed that SpaceX would no longer buy AMD chips. The strategic endorsement represents one of the strongest endorsements yet of Nvidia's next-generation AI platform. SpaceX has selected Nvidia to design the compute payload for its Starmind AI1 satellites, marking a significant milestone in the company's orbital data center initiative. Each Starmind satellite will carry Nvidia Rubin GPUs and Vera CPUs, with Nvidia claiming its Space-1 Vera Rubin Module delivers up to 25 times the AI compute of an H100 GPU, with volume shipments scheduled to begin later this fall. The partnership announcement came just before SpaceX's earnings call, which analysts have identified as a critical milestone for the company's AI unit performance.
