|
The Rocket That Swallowed an AI Lab
Tuesday evening the 277-page S-1 landed on the SEC’s EDGAR system. SpaceX, the most valuable private company in history, finally opened the books. For the first time since its founding in 2002, anyone could read the actual numbers. And the numbers tell a story the valuation does not.
In 2024 SpaceX reported $791 million in net income. Profitable. Clean. A rocket company with a satellite internet business generating real cash flow. In 2025, after absorbing xAI in an all-stock merger, SpaceX posted a $4.9 billion net loss. In the first quarter of 2026 alone the company lost $4.3 billion on $4.7 billion in revenue.
Three Companies, One Ticker. The S-1 breaks SpaceX into three segments. Space: the launch business, Falcon 9, government contracts, Starship development. Connectivity: Starlink, the satellite internet service with 10.3 million subscribers and $1.2 billion in Q1 operating income. AI: xAI, Grok, the Colossus data centers. The first two are real businesses. The third consumed $7.7 billion in capital expenditure in a single quarter. That is 76% of the company’s total Q1 capex spent on AI infrastructure. Starlink got $1.3 billion. Space got $1 billion.
The AI segment posted $818 million in Q1 revenue against $2.5 billion in operating losses. For the full year 2025, xAI lost $6.4 billion on $3.2 billion in revenue. In March, SpaceX took out a $20 billion bridge loan to refinance xAI’s debt onto its own balance sheet, per Morningstar’s analysis of the filing. xAI had borrowed $16 billion in 2025 alone to fund its GPU buildout.
The Starlink Engine. Strip out xAI and the picture changes. Starlink generated $11.4 billion in 2025 revenue and $3.3 billion in Q1 2026. The connectivity segment is profitable. It funds the rockets. It funds the satellites. It earned $1.2 billion in operating income last quarter with a subscriber base growing across 164 countries. But average revenue per user has fallen steadily: $99 per month in 2023 to $66 in Q1 2026, per the S-1. The user count is rising. The revenue per user is not.
What the Valuation Assumes. SpaceX is targeting $1.75 trillion. The S-1 claims a $28.5 trillion total addressable market. That figure includes Mars colonization, orbital data centers, and point-to-point Starship transport. By my read the quantifiable businesses today are Starlink at a roughly $15–$24 billion 2026 revenue run rate per analyst estimates, a launch operation running around $4 billion annually, and an AI division losing money at a rate of $10 billion a year. The $1.75 trillion number asks you to pay for all three segments at the ceiling.
Musk holds 85.1% of voting power through a dual-class share structure. He has said he will not sell any shares. The lockup terms for officers and directors were not disclosed in the preliminary filing. Up to 30% of the offering may go to retail investors per Benzinga, roughly $22.5 billion worth. Goldman, Morgan Stanley, BofA, Citi, and JPMorgan are the lead underwriters. The June 12 listing date gives the roadshow less than three weeks.
Meanwhile, Nvidia reported $81.6 billion in quarterly revenue on Wednesday. The stock finished the week flat. The 10-year yield sits at 4.57%. The 30-year is above 5.1%. The Fed minutes this week showed four dissenters and a majority flagging rate hikes. Oil is below $97 for the first time in a week on fragile Iran deal hopes. The Dow hit a record close yesterday at 50,285.
SpaceX was profitable before the merger. It is not profitable now. The S-1 tells you exactly why. Read the segment table before you read the valuation. The largest IPO in history is a satellite company bolted to an AI company that burns $1 billion a month. The rocket is real. The question is what else you are buying.
|
