Key Points
In the first quarter of 2026, SpaceX (NASDAQ: SPCX) spent $7.7 billion building out AI infrastructure. That was more than three-quarters of the company’s entire $10.1 billion capital budget for the period.
That is a staggering bet.
Will the gamble be worth it? Or is it setting up SpaceX to burn cash faster than the business can replace it?
Where the money went
SpaceX now runs three businesses, and the split in spending is telling. Its space segment, the rockets and launch operation, spent about $1.1 billion on capital projects last quarter. Its connectivity segment, Starlink, spent about $1.3 billion.
The AI segment spent $7.7 billion, more than three times the other two combined, or roughly 76% of all capital spending in the quarter.
That AI segment is essentially xAI, the Musk start-up SpaceX acquired in February. And xAI is expensive. SpaceX’s AI segment lost about $6 billion in 2025 and about $2.5 billion in the first quarter of 2026 alone.
The spending shows up in the results. On $4.7 billion of first-quarter revenue, SpaceX posted an operating loss of about $1.9 billion. It did generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of about $1.1 billion. But on a per-share basis, the loss deepened to $1.27 from $0.18 a year earlier.
Strength or warning?
That said, the bull case is straightforward. Compute is a scarce resource in AI right now, and Musk is racing to build one of the world’s largest clusters, both to train xAI’s models and to rent out that capacity to others. If it works, SpaceX would own rockets, the largest satellite-internet network, and a top-tier AI cloud. That is a combination no other company on Earth can claim.
The bear case, however, is just as clear. Spending $7.7 billion in a single quarter is an enormous outlay for a business still deep in the red, and AI hardware ages fast. In addition, there’s no guarantee that the compute Musk is building today will earn a return before the next generation makes it obsolete.
And cash is the real pressure point. SpaceX’s rocket and Starlink businesses contribute meaningfully to the overall company, but nowhere near $7.7 billion per quarter. Starlink, with its millions of subscribers and recurring monthly revenue, is the closest thing the company has to a cash engine. But even that can’t fund an AI build-out this large on its own.
Sure, the initial public offering (IPO) helped, raising about $85.7 billion. SpaceX has since priced $25 billion of senior notes, too. Even so, at this pace of AI spending, that cash could run down faster than investors expect, raising the odds of more stock sales later on.
The market has already turned cautious. After debuting in June and briefly touching $225, the stock has round-tripped to about $142 as of this writing, close to where it started trading, even as it joined the Nasdaq-100 this month. And at a market capitalization of about $2 trillion, SpaceX is now among the most valuable companies in the world, which only raises the stakes on every dollar it spends.
Investors, it seems, are wrestling with the same question I am. Is the AI build-out a strength or a warning? Probably both. And which one wins comes down to execution and time.
Musk’s track record arguably earns SpaceX the benefit of the doubt on ambition, since few founders have built more improbable businesses. But $7.7 billion in quarterly spending is a lot of money to burn, even for a company this size — and especially a money-losing megacap that hasn’t provided investors a clear path to profits yet.
Overall, SpaceX’s AI ambitions are impressive. But they are unproven and risky. And the stock’s extraordinarily high valuation raises the stakes. So, I’m content watching from the sidelines.
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Daniel Sparks and is clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
