SpaceX’s data centers and Grok agency delivered higher profits than investors expected in the third quarter of this year, as the company shed its roots as a space company and focused on artificial intelligence, which now accounts for 52% of its revenue.
Chief Executive Officer Elon Musk’s deep tech conglomerate on Tuesday reported third-quarter revenue of $14.6 billion, according to a regulatory filing.
The numbers were driven by growth in all segments, but particularly by the renamed “Super Intelligence” business line, which generated $7.5 billion in revenue from its recently acquired Cursor coding tool, Grok bots, and most importantly, the company’s fast-growing neocloud business, which now boasts 1.7 GW of computing power. The AI business generated a profit of $431 million, which would have been higher without the one-time stock-based compensation expense of $1.2 billion related to the Cursor acquisition.
The top line was also boosted by approximately $1 billion in income related to the recovery in Bitcoin prices and unspecified related party income that may result from SpaceX’s investment in another company.
The increase in revenue is balanced by total capital expenditures of $19.6 billion, as SpaceX continues construction on its second data center project, Colossus II, and increases investment in its Starship heavy-lift rocket, which it considers critical to deploying a new generation of Starlink satellites and developing orbital data centers. Chief Financial Officer Brett Johnsen said the company will spend $35 billion to $40 billion in new capital spending in the fourth quarter.
During a livestream discussion of the results with investors, Musk said he is working four days a week to bring the data center online in Memphis, Tennessee, where Colossus II is based.
“People are starting to realize that the constraints to deploying superintelligence are less about chips and more about power, cooling, and infrastructure,” Musk argued, adding that he has tasked SpaceX’s engineering team with solving the problem. “It’s like the New York Yankees playing Little League. It’s unfair, but the end result is that we’re able to deploy power cooling infrastructure at a much faster rate than anywhere else.”
As an example, Musk pointed out that manufacturers of the turbines that power data centers are facing delays of 12 to 18 months in obtaining the metal blades and vanes needed for those machines. Now, SpaceX is leveraging metal casting capabilities developed for SpaceX to manufacture these components and obtain turbines more quickly.
Musk also said that on the next test flight of the Starship rocket, scheduled for November, SpaceX will attempt to recover both the first and second stage boosters. Musk said recovering both segments of the vehicle would be a “huge technology milestone,” but the real milestone would be flying both stages.
SpaceX also increased subscribers to its Starlink space internet network, reaching 13.6 million consumers. Musk predicted that the growth of AI agents will lead to increased demand for connectivity.
Despite these capital investments, the company’s revenue growth was significant enough to restore profitability. SpaceX reported net income of $4.4 billion, an improvement from a $1 billion loss in the same period last year. However, there is still room for a comeback if the company wants to maintain this year’s gains. In the first nine months of this year, SpaceX still had a net profit loss of $413 million.
Musk was particularly bullish on the company’s superintelligence business unit, predicting that SpaceX’s annual recurring revenue through the end of 2027 “will be between $500 billion and $1 trillion.”
More specifically, Johnsen expects total revenue in the first quarter of 2027 to be in the range of $33 billion to $37 billion.
This is a developing story. TechCrunch updates.
If you make a purchase through links in our articles, we may earn a small commission. This does not affect editorial independence.
