SpaceX and xAI: The Costly Alliance for Elon Musk

SpaceX and xAI: An Expensive Alliance

Elon Musk, the technology mogul, finds himself at a crucial turning point in his career with significant financial implications. According to a report from The Information, SpaceX has suffered a massive loss of nearly $5 billion for the fiscal year 2025. This figure is all the more surprising given that SpaceX is in a strong position in the space market. All performance indicators are positive, making this loss even more intriguing.

In 2025, SpaceX achieved an impressive revenue of $18.5 billion. The Starlink service, which provides satellite internet access, has become a major revenue source with over 9 million subscribers. Thanks to its reusable rockets, SpaceX dominates more than half of global space launches, leaving its competitors far behind. However, it is in the field of artificial intelligence (AI) that challenges arise. The merger with xAI, finalized in February 2026, had a significant impact on the accounts for 2025. This merger increased the weight of AI activities in SpaceX's overall strategy, with substantial investments in NVIDIA chips and computing infrastructure for the Grok project.

A Bold but Risky Bet

By integrating the losses from xAI, SpaceX is transforming into a comprehensive technology infrastructure. This strategic choice raises concerns among analysts: can the profitability of Starlink support the growing financial needs of AI, a sector that consumes billions without a promise of quick returns on investment?

Despite these challenges, SpaceX's initial public offering (IPO), scheduled for June 2026, does not appear to be compromised. The company aims for an astronomical valuation of $1.75 trillion, which would surpass all previous IPOs. Elon Musk presents a vision where AI and space exploration are closely linked, with the ambition to deploy up to 1 million data centers in space. However, the technical and logistical obstacles are numerous, including cosmic radiation that damages chips and the complexity of quickly replacing rapidly obsolete components. Additionally, the ultra-heavy Starship rocket is already experiencing significant delays.

If AI manages to fulfill its promises, this financial sacrifice could be seen as a visionary stroke of genius. Despite record revenue, SpaceX is incurring a loss of $5 billion due to colossal investments in AI. The merger with xAI transforms the space company into a global tech giant, with the ambitious project of orbital data centers. This bold financial bet sets the stage for a historic IPO, valuing the group at over $1.7 trillion.