Starlink, the Satellite Internet Service, Generated $4.2 Billion in Revenue and Was the Only Segment Without an Operating

SpaceX's first quarterly earnings as a public company reveal it is primarily a telecom and compute-rental business, with its space sector contributing just over 10 percent of revenue and under $1 billion this quarter. Starlink, the satellite internet service, generated $4.2 billion in revenue and was the only segment without an operating loss. The company's neocloud business, leasing data center capacity to AI firms, drove $15.8 billion in spending on AI in the second quarter, surpassing rocket-related spending.

SpaceX's Colossus 1 data center in Memphis, built for Musk's AI model Grok, faced operational issues and is now rented out. Musk said only 10 percent of compute built will go to Grok. Deals with Google, Anthropic, Reflection AI, and Cursor put SpaceX on a trajectory to reach $100 billion in annualized revenue run rate, per CFO Bret Johnsen.

Analyst Alexander Potter expects neocloud spending to climb to $65 billion next year. Musk has cited plans to build data centers in space as a reason for going public.