SpaceX’s Money-Losing Rockets Are Biggest Asset in AI Dream
(Bloomberg) — SpaceX revealed eye-popping numbers in its IPO prospectus, including a $26.5 trillion potential market for an empire spanning artificial intelligence and telecommunications.
However, another relatively low number stood out. SpaceX’s launch business brought in about $4.1 billion in revenue last year alone. And ultimately he lost money.
This is an obvious fact, considering the fact that launches are what made SpaceX the juggernaut it is today. With its Falcon family, SpaceX has pioneered the commercial viability of reusing rockets similar to how airlines use jets, reducing costs and forcing industry incumbents to rethink their business models.
SpaceX now has a near-monopoly on the heavy-lift launch market and is by far the most important rocket provider for the U.S. government and much of the world. Chief Executive Officer Elon Musk is preparing to take the company’s prototype Starship rocket on a test flight on Friday evening.
But what’s clear in SpaceX’s prospectus is that revenue from its Starlink satellite broadband unit and the potential of its newly acquired AI business are now at the forefront.
“You certainly can’t take this company on as a launch company,” said Chad Anderson, one of SpaceX’s early investors and CEO of investment firm Space Capital. “Launching is a competitive advantage that enables big money makers.”
But what the budget numbers don’t show is just how vital this little piece is to Musk’s goals.
SpaceX’s Starship is the key to unlocking plans for future orbital AI data centers and expansion of Starlink. That’s what makes the upcoming launch of the newest Starship, called V3, so important; The stakes are high for SpaceX to demonstrate that the vehicle can operate.
But beyond that, SpaceX’s impressive resume with its Falcon fleet and the rocket’s market value are inextricably linked to the company’s success. And this past work will be a big reason why future investors decide to jump into the company now.
“When we look at new investments, we are not just looking for companies that innovate and can dominate existing markets; we are even more excited about companies that create new markets,” said Shahin Farshchi, a partner at Lux Capital. “And what SpaceX accomplished early in its life was to greatly expand its launch business.”
Still, SpaceX’s launch revenue pales in comparison to Starlink’s sales. SpaceX’s connectivity segment generated $11.4 billion in revenue in 2025, up from $7.6 billion the previous year. Wednesday’s prospectus also showed that its subscriber base is increasing year on year.
The biggest reason SpaceX has been able to place nearly 10,000 satellites into low Earth orbit is its Falcon 9 fleet. In fact, SpaceX is SpaceX’s largest customer; Starlink missions will account for almost 75 percent of the 165 Falcon 9 cruises in 2025.
“We’re our biggest demand for launch pads right now,” SpaceX President Gwynne Shotwell told Time Magazine in March. “Starlink basically created this incredible demand for Falcon 9.”
Although the Falcon 9 primarily supports Starlink missions, the vehicle is one of the only options available for commercial satellite operators to carry large payloads into orbit and is a major enabler for both NASA and the Pentagon.
But despite capturing most of the launch market, SpaceX is still limited in the amount of money it can make from this industry. Its foray into Starlink and its upcoming orbital AI data centers underscore a growing trend among its rivals that has emerged over the years: you have to branch out.
“Launch alone is useless,” said Anderson, adding: “Launch is very important. You need to secure your access to space. But you also need to have something to do when you get there.”
Rocket Lab Corp. and Firefly Aerospace Inc. Other companies such as have begun to expand beyond their core businesses into satellite manufacturing, software, lunar landers, and space communications.
SpaceX’s rival, Blue Origin LLC, has interests in numerous space businesses, from launches to satellite systems and lunar landers. Even Vast Space LLC, which has been trying to build space stations, recently announced plans to begin building satellites for customers.
But SpaceX’s key advantage over its rivals has always been that it has a working, reliable rocket with significant capabilities that can be launched in months, not years. When it comes to competing with other hyperscalers like Meta and Alphabet’s Google in the AI market, SpaceX has the capacity and expertise they don’t.
Even Amazon.com Inc. had to purchase rocket launches from SpaceX to get its satellites into the air.
“Isn’t launch a good business, because SpaceX doesn’t make a lot of money off of it? The alternative is something like Amazon, which spent over $11 billion on launches alone, and even with that spend, they still can’t get their satellites into orbit,” said Chris Quilty, president of consulting firm Quilty Space.
There is a major wrinkle moving forward, though. SpaceX will eventually transition from Falcon to the larger and more complex Starship.
Designed to be completely reusable, Starship is much more difficult to develop and may not be ready to carry satellites in the near future. In fact, the massive capital expenditure on Starship, reaching $3 billion by 2025, is likely to be responsible for SpaceX’s net loss on its launch business.
“Starship is an important factor in the company’s future performance,” Anderson said. “The possibility of delay or failure is the company’s most important risk factor.”
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