SpaceX, an aerospace manufacturer and space transportation services company, designs, manufactures, and launches advanced rockets and spacecraft, operating the Starlink satellite internet constellation. The firm’s upcoming initial public offering (IPO) prospectus reportedly highlights a significant strategic shift towards artificial intelligence, positioning it as an AI-first entity. Championed by Elon Musk, this move signals a departure from its core rocketry and satellite business, despite the latter currently bankrolling its ambitious AI expansion. The IPO aims to raise 75 billion at a 1.75 trillion valuation, targeting a vast 28.5 trillion AI market.
Unlike tech giants such as Alphabet and Microsoft, which leverage deep operating cash flows, SpaceX funds its AI push with revenue from rocket and satellite operations. Excerpts from the company’s IPO registration, reviewed by Reuters, indicate that its Starlink satellite broadband business doubled operating income to 4.42 billion last year, effectively covering losses in its space division. This strategy results in a cash-burn profile akin to a late-stage startup. In 2025, the AI division, housing xAI, consumed 61% of the consolidated company’s 20.74 billion capital spending, leading to an operating loss of 6.4 billion. Capital spending more than doubled last year, outpacing revenue by 2 billion.
This substantial investment is set to continue as SpaceX plans to build an armada of space-based data centres, with projected trillion-dollar costs. S&P Global Visible Alpha’s Melissa Otto noted investors seek clear visibility on the evolving business model and economics of compute at scale. A deal with AI code-generation startup Cursor, offering acquisition for 60 billion or 10 billion collaboration post-IPO, adds further complexity. Shay Boloor, chief market strategist at Futurum Equities, highlighted that IPO buyers would be “paying upfront for a transformation that still needs to show up more clearly in the numbers,” underscoring risks if AI revenue monetisation does not align with management’s timeline.
