Elon Musk’s company reported a sharp increase in artificial intelligence revenue following its acquisition of Cursor, while Starlink remained its largest source of operating profit.
SpaceX’s artificial intelligence business overtook its Starlink-led connectivity division in quarterly revenue for the first time, marking a major shift in the company founded by Elon Musk. The company reported $14.6 billion in third-quarter revenue on October 20, 2026, as growing demand for AI computing services helped drive a dramatic increase in sales.
SpaceX’s Super Intelligence division generated $7.56 billion during the three months ending September 30, compared with $5.25 billion from its Connectivity business. The AI segment accounted for nearly 52% of total revenue, making it the company’s largest division by sales.
The financial results also showed a substantial improvement in profitability. SpaceX earned $4.4 billion in net income, reversing a $1.1 billion loss during the same quarter in 2025.
Revenue increased 161% from the previous year, primarily because of new AI infrastructure agreements, the acquisition of coding assistant Cursor and continued expansion of Starlink’s satellite internet services.
Despite those gains, the company is committing enormous amounts of money to AI infrastructure. Capital spending reached $19.6 billion during the quarter, exceeding revenue and raising questions about how quickly the investments will generate sustainable returns.
Artificial Intelligence Becomes SpaceX’s Largest Business
SpaceX’s Super Intelligence division reported an 830% increase in revenue compared with the third quarter of 2025. Its sales also nearly tripled from the previous quarter, when the division generated $2.56 billion.
The rapid expansion reflects SpaceX’s transformation into a company operating across aerospace, satellite communications and advanced computing. Its AI activities include cloud computing services, infrastructure development and applications associated with the Grok family of AI models.
The company has been expanding its computing facilities to meet demand from businesses developing and deploying artificial intelligence systems. These operations provide access to powerful computer processors that customers can use for training and running models.
SpaceX reported that its installed computing capacity, measured by nameplate power, reached 1.7 gigawatts at the end of September. That was an increase from 1.4 gigawatts three months earlier and 0.6 gigawatts a year before.
Much of the expansion is connected with the continuing construction of the Colossus II computing complex. The project is intended to provide greater processing capacity for SpaceX’s own AI products and commercial customers.
The Super Intelligence division generated $431 million in operating income during the quarter, compared with a $1.72 billion operating loss a year earlier.
Its adjusted earnings before interest, taxes, depreciation and amortization reached nearly $5 billion. However, that accounting measure excludes several significant expenses and should not be confused with net income or free cash flow.
Cursor Acquisition Helps Drive Growth
A major contributor to the AI division’s performance was SpaceX’s acquisition of Cursor, the software development assistant used by programmers.
SpaceX completed the transaction on August 14, 2026, at an implied equity valuation of approximately $60 billion. The deal expanded the company’s ability to offer AI applications alongside the infrastructure required to operate them.
Cursor contributed $608 million in revenue between the acquisition date and September 30. Its contribution represented an important part of the division’s growth, although other infrastructure and software operations accounted for most of the quarterly sales.
SpaceX disclosed that the transaction involved $42.5 billion in accounting purchase consideration. Additional employee equity awards were associated with continued service and retention arrangements.
The acquisition also created significant compensation expenses. SpaceX reported approximately $1.2 billion in acquisition-related share-based compensation affecting the Super Intelligence division during the quarter.
Even with those expenses, the division reported positive operating income. Its profitability improved substantially from the previous quarter, when it recorded a $1.26 billion operating loss.
The company is also developing Grok Bot, an AI agent intended to carry out tasks for users. That product forms part of a broader effort to combine computing infrastructure, advanced models and applications within one business.
Starlink Remains the Company’s Profit Leader
Although artificial intelligence generated more revenue, SpaceX’s Connectivity division remained the stronger source of operating profit.
The business, which includes Starlink, generated $2.37 billion in operating income on $5.25 billion in quarterly revenue. Those figures compared with $431 million in operating income from Super Intelligence.
Connectivity revenue rose 69% from the previous year, supported by growing demand from consumers, businesses and government customers.
Starlink finished September with 13.6 million consumer subscribers, an increase of 1.6 million during the quarter. The customer base was also substantially larger than the 7.2 million subscribers reported a year earlier.
Average monthly revenue per consumer subscriber increased from $66 in the second quarter to $69 in the third. SpaceX attributed the improvement partly to changes in its customer mix.
Consumer connectivity generated $3.12 billion in quarterly revenue, while enterprise and government services contributed another $2.13 billion.
The enterprise and government business experienced particularly strong growth, with revenue increasing 91% from the previous year.
Starlink also expanded its aviation operations. SpaceX reported that more than 3,800 aircraft were equipped with its satellite internet technology by the end of September.
These results demonstrate that satellite connectivity continues to provide substantial earnings even as artificial intelligence becomes a larger part of SpaceX’s operations.
Starship and Launch Operations Continue Expanding
SpaceX’s traditional aerospace business also contributed to quarterly results, generating approximately $1.77 billion in revenue.
The company completed 35 launches during the quarter, including 12 customer missions and 23 internal launches. Its commercial activity included a NASA mission to launch the Nancy Grace Roman Space Telescope.
One of the quarter’s most important developments was Starship Flight 14, described by SpaceX as its first revenue-generating orbital Starship mission.
The spacecraft delivered 26 Starlink V3 satellites into orbit, marking an important step toward using Starship for operational satellite deployments.
According to SpaceX, the mission added approximately 10 times the downlink capacity of a Falcon 9 Starlink launch. That increased capability could eventually allow the company to expand satellite broadband coverage more efficiently.
Starship development remains expensive, however. The aerospace division reported a $7 million operating loss during the quarter as research and development costs continued to rise.
SpaceX is also planning additional facilities to support Starship operations. Its proposed Starbase, Louisiana, project is intended to increase launch capacity, with the first launch currently targeted for 2029.
Spending Raises Questions About Financial Returns
SpaceX’s rapid growth has been accompanied by capital expenditures far above historical levels.
The company spent $19.59 billion on capital projects during the third quarter, compared with approximately $6.88 billion in the same period last year.
The Super Intelligence division accounted for $16.44 billion of that spending, representing about 84% of total capital expenditures.
Much of the money went toward computing equipment and infrastructure needed to support AI services. These investments may generate revenue over several years, but they require substantial funding before their full commercial value can be established.
For the first nine months of 2026, SpaceX recorded capital expenditures exceeding $48 billion. Over the same period, its revenue totaled approximately $27.1 billion.
The company reported a net loss of $413 million for those nine months, despite the strong third-quarter profit. Its year-to-date operating income was approximately $705 million.
The contrast reflects how dramatically the company’s financial performance improved during the latest quarter. It also illustrates the substantial costs associated with expanding several capital-intensive businesses simultaneously.
Chief Financial Officer Bret Johnsen indicated that spending is likely to remain elevated. During the earnings call, management forecast fourth-quarter capital expenditures between $35 billion and $40 billion.
Such an investment program would place continued pressure on cash resources, although SpaceX reported significant holdings of cash and marketable securities at the end of September.
Musk Discusses Possible Tesla Merger
The earnings announcement also drew attention because Musk discussed the possibility of combining SpaceX and Tesla.
During the company’s earnings call, Musk said special committees at both companies were considering whether a merger would make strategic sense.
The discussions remain preliminary, and neither company has announced a binding agreement. Any potential transaction would face significant financial, corporate governance and regulatory questions.
The possibility reflects the increasingly connected business interests surrounding Musk, particularly in artificial intelligence, computing infrastructure and autonomous technologies.
SpaceX also attracted investor interest following its financial results. The Associated Press reported that its shares climbed approximately 7.5% after the earnings announcement, reflecting optimism about the rapid growth of its AI operations.
Investors must still assess whether the company’s increasing revenue can support its spending commitments over the longer term.
What Comes Next for SpaceX
SpaceX enters the final quarter of 2026 with three major businesses moving in different directions.
The Connectivity division continues expanding its customer base while producing substantial operating profits. Its aerospace operations remain important for satellite deployment, government missions and Starship development.
Super Intelligence has become the largest revenue generator, but it also requires the greatest investment. The division’s future performance will depend on continuing demand for computing services and its ability to convert growing revenue into lasting profitability.
The company is expanding its AI infrastructure while developing commercial applications and pursuing additional customers. At the same time, it must continue funding satellite networks and launch systems.
SpaceX’s third-quarter results demonstrate how quickly its financial structure has changed. Its next earnings report will show whether the rapid expansion of Super Intelligence can continue while the company manages rising capital costs.
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Source https://images.nasa.gov/details/KSC-20191002-PH-SPX01_0001 Author Austin Lowery NASA/SpaceX Cc1