SpaceX's shares fall, AI splurge puts damper on first earnings after IPO
SpaceX shares fell after the company disclosed a sharp rise in AI spending, overshadowing stronger-than-expected revenue in its first earnings report after listing
 "SpaceX's shares fall, AI splurge puts damper on first earnings after IPO")
SpaceX shares fell after the Elon Musk-led company disclosed higher-than-expected spending on its artificial intelligence (AI) business, spoiling an inaugural earnings release that broadly exceeded Wall Street estimates.
The rocket, satellite and AI conglomerate’s capital expenditures soared to $28.5 billion in the first half of this year, more than four times its spending a year earlier. That outlay is nearly as much as the amount raised in the biggest initial public offering ever before SpaceX’s record listing in June.
Musk is steering the vast majority of SpaceX’s expenditures toward AI, a business that is growing rapidly, though not at the rate of all that spending.
“We’re building AI compute capacity at scale faster than an-yone else, we believe, and we’re significantly improving our AI models,” Musk said during a conference call Tuesday.
The company generated $3.38 billion in revenue from artificial intelligence during the first six months of the year, less than half what its connectivity business — centered around the satellite internet service Starlink — brought in during that span.
SpaceX shares dropped as much as 13 per cent to $109.21 shortly after the start of regular trading Wednesday. The stock has been volatile since its debut, first trading up 49 per cent in a matter of days, only to fall below the IPO price within just over a month.
“We expect the cadence of AI development to improve dramatically,” Musk said. In addition to beating estimates for total revenue, SpaceX posted a narrower loss for its AI business than analysts were expecting.