SpaceX shares sink after first earnings report reveals huge AI spending plans
SpaceX shares dropped following an earnings report that showed significant losses driven by heavy investment in artificial intelligence infrastructure. Despite the losses, Elon Musk remains optimistic about the growth of the Starlink business and AI compute services.
Why it matters
The report highlights the massive capital expenditure required for AI development and the market's sensitivity to the profitability of space-tech companies.
Image source, EPA Image caption, Elon Musk's SpaceX in June became a publicly traded company.
Shares in Elon Musk's SpaceX tumbled after the company's first-ever earnings report revealed a huge jump in spending on artificial intelligence, spooking investors.
While the firm's quarterly revenue had nearly doubled to $7.8bn (£5.8bn) from a year earlier, its spending ballooned to $18.3bn, more than six times what it was a year ago, the bulk of which was for AI.
The firm builds space rockets and Starlink internet satellites as well as owning the social media platform X. It began trading on the US stock market in June.
Its stock fell nearly 9% in after-hours trading. Musk said during an investor call after the results that people seemed to be "underestimating" SpaceX.
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