SpaceX reported that its artificial intelligence (AI) division generated a whopping $2.6 billion in revenue this quarter—far surpassing the company's space exploration efforts which brought in only $962 million. Despite this lucrative boost, SpaceX is still losing money overall. The firm made significant deals with Anthropic and Google to provide computing power, putting it head-to-head with rivals like CoreWeave.

The increased focus on AI has also led to a substantial hike in capital expenditure, reaching $18.37 billion. Elon Musk boasted during an investor call that SpaceX is building AI compute capacity faster than any other company. However, the AI model Grok faced criticism for inappropriate content moderation issues. To address this, SpaceX began renting out its data center space and acquired Cursor to bolster its enterprise AI offering.

Despite these initiatives, SpaceX's core business—space exploration and Starlink internet—are struggling. The company's space segment reported a revenue of $962 million, with the Starlink service bringing in a significantly higher $4.2 billion. However, Musk’s ambitious plans for data centers in orbit face regulatory hurdles.

SpaceX continues to lose money, but has narrowed its loss this quarter to $143 million. The development costs of its space division saw a sharp rise by $389 million, primarily driven by the Starship project, which is crucial for expanding SpaceX's connectivity business.