New Delhi: Elon Musk-led SpaceX has disclosed massive losses at its AI business, xAI, as the company pushes aggressively into artificial intelligence infrastructure,
orbital data centres, and large-scale compute services ahead of its blockbuster IPO. In its public filing, xAI reported an operating loss of $6.36 billion in 2025, compared with one year earlier’s $1.56 billion loss.
The filing provides investors with the most detailed look so far at Musk’s ambition to build an artificial intelligence and the amount of expenditures driving it. Despite the setbacks, SpaceX stated that it remains committed to focusing its investments on AI infrastructure, Grok models, and compute power as competition grows strong with other AI firms like OpenAI and Anthropic. The IPO will be listed under the ticker of SPCX and could be the biggest Wall Street public offering ever.
xAI losses surge amid massive infrastructure spending
According to SpaceX’s filing, xAI’s revenue increased by 22 per cent to $3.2 billion in 2025 from $2.62 billion in 2024. But this growth was slower than that of competing AI companies which have reported significant increases.
As of the quarter that ended on March 31, 2026, xAI’s revenue stood at $818 million, and its loss was $2.47 billion. The company’s revenue for that same quarter last year was $727 million, with a loss of $936 million.
The increase in losses was primarily attributed to the significant investments made in AI infrastructure and computing resources. SpaceX’s capital spending in 2025 for its AI business was $12.7 billion. Annualised spending was already over $30 billion in the first three months of 2026.
The company stated the AI component covers AI compute operations, X and the company’s AI model called Grok AI.
In its filing, SpaceX stated that its view is that the ability to rapidly scale compute capacity to keep up with the exponential growth of usage and to deliver frontier intelligence will be the key to AI leadership.
Grok and X integration central to Musk’s AI strategy
SpaceX said Grok’s integration with X gives it a competitive advantage as it can tap into real-time conversations and trending information across the social platform.
Together, Grok and X reportedly have approximately 550 million monthly active users and produce nearly 350 million posts each day. But currently, only approximately 117 million users are interacting with Grok’s AI capabilities.
Future Grok models would be “multiple trillions of parameters”, the company said, which it thinks would greatly enhance reasoning and intelligence.
Subscription sales from Grok and X contributed to the growth in revenues in 2025. Subscription revenue jumped 365 per cent to $365 million, while data licensing grew by $88 million. Other revenues, including advertising, also grew $116 million during the year.
SpaceX bets big on AI compute-as-a-service
One of the biggest potential profits SpaceX may make in the future is leasing its AI computing power to other businesses. In the filing, Anthropic revealed it has signed a big contract for SpaceX’s Colossus 1 and Colossus 2 data centres.
The terms of the deal will give Anthropic 200 megawatts of compute power and approximately 220,000 Nvidia GPUs. During the contract term, the partnership is projected to create almost $45 billion in value.
Musk also said earlier this month in a tweet that other companies are also discussing compute partnerships with him.
The Colossus and Colossus II facilities offer roughly one gigawatt of computing power, among the world’s largest AI training clusters, SpaceX said.
Orbital data centres become the new focus
The most ambitious aspect of the IPO filing is SpaceX’s proposal to construct orbital AI data centres. The company said it has a unique capability to provide compute infrastructure in space due to its vertical integration of rockets, satellites and connectivity systems.
The company anticipates using its expertise in operating almost 9,600 Starlink satellites in low-Earth orbit to eventually serve AI compute satellites as well.
SpaceX stated in the filing that they believe “orbital AI compute is an incredibly difficult technical challenge, one we feel only we can solve at scale in the near term.”
The company said the cost of the orbital data centres may be lower than ground-based ones in the future because of the savings in energy and infrastructure.
IPO could push Musk toward trillionaire status
Prior to the IPO, SpaceX had estimated its value at around $1.25 trillion. The filing estimates that Musk owns a majority stake in the company, meaning his personal fortune would likely surpass the $1 trillion mark.
The filing also showed that SpaceX had a net loss of $4.9 billion last year, but it still reported $18.6 billion in revenue. The company recorded $4.7 billion in revenue and a net loss of $4.3 billion in the first quarter of 2026.
SpaceX currently has $102 billion in assets, but over $60 billion in debt.
Legal challenges and growing scrutiny
The registration statement for its IPO also listed growing legal and regulatory issues for the company. SpaceX announced that it anticipates paying over $500 million in legal fees to deal with copyright-related, data privacy, EU content moderation compliance and claims regarding Grok’s deepfakes generated by artificial intelligence.
The filing follows the high-profile court battle between Musk and OpenAI CEO Sam Altman, which involved allegations arising from OpenAI’s transition to a for-profit model.
Yet, regardless of the dispute, SpaceX’s rocket launches and Starlink satellite Internet companies continue to lead the two respective markets, buoying investors’ hopes for the company’s wider technology portfolio.
