Elon Musk's SpaceX shares fell as capital expenditures for artificial intelligence surged to $18.4 billion.
SpaceX shares declined following the company's first earnings report as a public entity, driven by a significant increase in capital expenditures. Elon Musk stated that the company's spending on artificial intelligence reached $18.4 billion in the second quarter, a figure that exceeded analyst expectations. While revenue grew by 92% year-over-year, the massive investment in AI infrastructure and Nvidia chips represents a substantial upfront cost that has caused some investor concern regarding long-term profitability. Bret Johnsen, the Chief Financial Officer of SpaceX, addressed these concerns by highlighting the company's efficiency in deploying capital. Johnsen noted that the company is achieving a less than one-year payback on AI compute investments. To offset the current operating losses in the AI unit, SpaceX is securing large-scale cloud service agreements with companies like Google and Anthropic. These deals are expected to help the company reach $100 billion in annualized recurring revenue by the end of the year, assuming the closure of the $60 billion Cursor acquisition.