Space Exploration Technologies Corp. (SpaceX), founded by Elon Musk, has a lofty aspiration that humans will inhabit other planets someday. The company has taken space exploration to an unprecedented level, and it is at a scale we have never witnessed before. What seems like science fiction has become a reality. SpaceX is pioneering new frontiers in space exploration. Imagine having a data centre on the moon or Mars which communicates with people on earth. That is what SpaceX is taking a bet on. The company has been increasing its spending on Research and Development (R&D) to ensure that these orbital data centres are deployed soon; indeed, SpaceX is building the infrastructure for the future.
About the SpaceX Initial Public Offer (IPO)
SpaceX is raising funds to further its ambitious projects by offering shares of its Class A common stock to the public through an IPO. These shares will be listed on the NASDAQ stock market. The holders of the Class A common stock will be entitled to one vote per share, as opposed to each share of its Class B common stock, which carries ten votes.
About the major shareholder
Elon Musk, the founder, assumes substantial power and voting rights. He will be the Chief Executive Officer, Chief Technical Officer and Chairman of the board. He will have significant control over the board of directors. This gives the company a status of a “controlled company”. This means most of its board members don’t need to be independent directors. The Class A commons stock holders cannot appoint the majority of the directors.
About the company
Although it was established in 2002, SpaceX has already achieved some exciting firsts, such as the first private company to successfully dock a spacecraft with the International Space Station, and the first liquid fuel rocket to reach orbit by a private company. The company has three business segments, namely space, connectivity and Artificial Intelligence (AI). Grok and X (formerly Twitter) are part of its AI business segment.
Its space business involves the manufacturing of spacecraft and launch vehicles, and the provision of space flights for space exploration and research. The space segment has produced about 28% of the company’s revenue over the past three years.
The connectivity segment provides internet connectivity through satellites. Presently, it has over 10 million subscribers in over 160 countries. In 2025, 61% of the company’s total revenue or $11.4 billion came from this part of the business (2024: 54.2% of total revenue or $7.6 billion). The Artificial Intelligence unit has been growing fast. It grew its revenue by 33.2% in 2025, compared to a 34.9% growth in 2024.
Normally, this type of business has huge costs. Surprisingly, gross profit margin is high, reaching 49.4% in 2025 (2024: 42.9% and 2023: 41.2%). The company has been able to drive down its costs because its rockets are reusable and its capacity is increasing. Over 600 launches have been carried out. And the company was responsible for over 80% of global mass transit to orbit in 2025. However, the company has found it hard to produce a positive operating profit due to high spending on R&D. In 2025, expenditure on R&D rose by 149.5% year-over-year. R&D, as a result, translates to 46.3% of revenue in 2025. AI, which is relatively new to the business, is central to its space research – AI compute infrastructure on the earth and in space. SpaceX is aggressively spending on AI with the aim of achieving cost savings. Capital spending for the AI segment was $12.7 billion in 2025 (Space: $3.8 billion, Connectivity: $4.2 billion). And in the first quarter of 2026, $7.7 billion was spent on capital for the AI segment.
The risk
Space expeditions are risky and expensive. The technologies involved are emerging and futuristic, with a lot of uncertainty. AI is a relatively new segment, requiring significant investment, which could pay off going forward. AI was the reason why the whole company had an operating loss of $2.6 billion in 2025. In 2025, the AI segment had a $6.4 billion operating loss as against the $4.4 billion operating income of the Connectivity segment.
The space and connectivity segments have been responsible for the bulk of its earnings. Also, the company makes most of its earnings from the US; about 70% of its revenue comes from the USA.
