SpaceX revenue jumps 161 percent as its AI business passes Starlink, and Musk backs a merger with Tesla

Four months after the biggest initial public offering in history, SpaceX has posted the numbers to match the valuation.

The company reported third quarter revenue of 14.6 billion dollars on Tuesday, up 161 percent from a year earlier and well ahead of the 12.9 billion dollars analysts surveyed by FactSet had expected. Net income was 4.4 billion dollars, against expectations of 1.57 billion, swinging from a loss of 541 million dollars in the previous quarter. Earnings per share came in at 35 cents, against a forecast of 14 cents. It was the company’s second earnings report since going public and its first profitable quarter as a public company.

The surprise inside the numbers is what is making the money. SpaceX’s artificial intelligence segment, which it calls Super Intelligence, brought in about 7.6 billion dollars in the quarter, passing the roughly 5.2 billion dollars from its Starlink led connectivity business. A year ago the connectivity division accounted for 61 percent of the company’s revenue. The rocket company is now, by revenue, an AI company first. Adjusted earnings before interest, taxes, depreciation and amortization climbed to about 8.8 billion dollars. At Tuesday’s closing price of 147.79 dollars, the company carried a market value of about 2.01 trillion dollars, and the shares rose nearly 5 percent in late trading after the results, as of October 20. Tesla shares rose a little over 1 percent.

Then came the answer analysts had been waiting for. Asked about the long rumoured merger with Tesla, Musk said the two companies have formed special committees of independent directors to discuss a possible combination, at the request of shareholders. He said he cannot take part in the talks himself because he is a conflicted party, and that shareholders would have to approve any deal. “Do I think it would be a good idea? Yes,” he said, adding that there is a lot of merit in combining the companies. On the Tesla side, he noted, a deal would need the support of 50 percent of all shares, not just of the votes cast, which he called quite a high hurdle.

The two companies are already intertwined. Tesla invested 2 billion dollars in xAI, a stake that became SpaceX shares when the two merged, SpaceX’s AI unit has bought Tesla Megapack batteries, and the pair are working together on AI chips and on a computer use agent. A merger would put rockets, satellite internet, social media, electric cars, robots and one of the largest AI operations in the world under a single stock, controlled by one man. Whether the committees agree, and whether Tesla’s shareholders follow, is now the largest open question in American business.

The picture with this story is an illustration.