Musk: "SpaceX, Tesla Weigh Merger"... SpaceX Swings to Profit (Roundup)

"Formed Special Committee to Consider Merger"
SpaceX Revenue Up 161% Year Over Year
AI Business Drives Results

Elon Musk, CEO of Tesla, has confirmed that SpaceX, the aerospace company, and Tesla are considering a merger. If completed, the deal could become the largest merger in corporate history. Meanwhile, SpaceX successfully returned to profitability in the third quarter, with revenue surging 161% on the back of explosive growth in its artificial intelligence (AI) business.

According to Bloomberg News on October 20 (local time), Musk said during SpaceX's third-quarter earnings call that the company and Tesla had formed a special committee to explore a potential merger.

"I think there are significant advantages to combining the two companies," Musk said. "We are effectively approaching the singularity of superintelligence (AI), and there is a lot to be gained by working together to develop superintelligent software."

This is seen as a sign that Musk is seriously considering bringing together the businesses he has pursued in space exploration, satellite communications, AI, electric vehicles and robotics under a single company. However, merger discussions are at an early stage, and it remains uncertain whether a deal will actually be completed.

Musk also explained that the boards had not agreed to a merger and that winning approval from Tesla shareholders would be a key challenge.

SpaceX Returns to Profit in Q3... AI Business Drives Results

SpaceX's Falcon 9 rocket soaring into the sky. Yonhap News Agency

Meanwhile, SpaceX said it generated revenue of $14.58 billion in the third quarter, according to results released that day. This was up 161% from the same period a year earlier and 86.5% from the previous quarter.

Operating income was $2.791 billion and net income was $4.404 billion, marking a return to profitability compared with both the same period a year earlier and the previous quarter. SpaceX had recorded operating losses of $273 million in the third quarter of last year and $143 million in the second quarter of this year. Adjusted earnings per share (EPS) came to 35 cents, about 2.7 times the market estimate of 13 cents.

The AI business led the improvement in results. Revenue in the third quarter from the "Superintelligence (SI)" division, the renamed version of SpaceX's existing AI business, reached $7.56 billion, up 830% from the same period a year earlier. The division accounted for about 52% of total revenue, overtaking the communications business, which includes Starlink, to become the company's largest business segment.

The acquisition of AI coding startup Cursor, growth in the Grok AI model, and the expansion of cloud service contracts drove results. In particular, providing AI computing capacity at its data centers to outside companies such as Anthropic and Google has become a major source of revenue. SpaceX's AI computing capacity had grown to 1.7 gigawatts (GW) as of the end of September.

Operating Income from Communications, Including Starlink, Doubles... AI Capital Spending Weighs

An illustration showing Starlink's low Earth orbit satellite operations in 3D. Provided by satellitemap.space.

The communications business, including Starlink, also continued to grow. Revenue from the communications business was $5.248 billion, of which $3.121 billion came from general consumers and $2.127 billion from government and enterprise customers. Operating income was $2.367 billion, about double the figure for the same period a year earlier.

Starlink subscribers totaled 13.6 million, an increase of 1.6 million from the previous quarter. More than 3,800 aircraft were also using Starlink services.

Revenue from the space business was $1.767 billion, up 6% from the same period a year earlier and 84% from the previous quarter. Its operating loss narrowed sharply to $7 million from $542 million in the previous quarter.

However, massive capital spending to expand AI infrastructure remains a burden. SpaceX's capital expenditures in the third quarter totaled $19.593 billion, of which about $16.444 billion went to the SI division. Although the AI business is growing rapidly, spending on related infrastructure is exceeding the company's total quarterly revenue.

Brett Johnson, SpaceX's chief financial officer (CFO), said, "Revenue increased 161%, driven by continued growth in the communications business and a turning point in the superintelligence business." He added, "Our competitive strength in launches, recurring revenue from Starlink, and the large-scale expansion of superintelligence infrastructure are generating significant operating leverage."

SpaceX shares closed at $147.79 that day, down 0.11% from the previous trading session, but reversed course and rose in after-hours trading following the release of results that exceeded market expectations.

This content was produced with the assistance of AI translation services.