SpaceX swings to $4.4bn profit as Musk opens the door to a Tesla merger

Elon Musk has said he would back a merger of SpaceX and Tesla, on the same day his rocket and artificial intelligence company reported its first quarterly profit since it listed on the Nasdaq in June.

Asked on a call with analysts about a possible tie-up, Musk said he felt he was “tap dancing through a minefield” but that a combination would be “a good idea”. Shares in SpaceX rose nearly five percent in after-hours trading after the remarks.

Musk said special committees of independent directors at both companies had been set up to study the idea at the request of shareholders, and that he could not take part in their talks because he has a conflict of interest. He is chief executive of both companies and also chairs SpaceX and serves as its chief technology officer. As of June 30 he owned 48.4 percent of SpaceX, according to a regulatory filing, and controls more than 82 percent of its voting power through super-voting shares. He holds about 20 percent of Tesla.

The committees have not agreed on terms and there is no guarantee they will, Musk said, cautioning that it would be overstating matters to treat a merger as certain. Any deal would need the backing of a majority of all Tesla shares, not only those cast in a vote, which he called “quite a high hurdle”. He said the two companies could gain from working together on AI software, chip design, robotics and space-based computing.

As eNCA reported on 21 October, the merger comments came alongside the group’s first results as a listed company.

SpaceX posted net income of $4.4 billion for the July to September quarter, against a loss of $1.1 billion a year earlier. Revenue rose 161 percent to $14.6 billion. That follows a bumpy start on the market: the company began trading on 12 June after an initial public offering priced at $135 a share that raised about $85.7 billion, and its first earnings report showed second-quarter revenue of $7.8 billion and a net loss of $541 million.

The turnaround came from the AI division, which SpaceX now calls Super Intelligence. Its revenue rose more than nine times from a year earlier to $7.6 billion, overtaking the Starlink satellite internet business as the company’s largest source of sales. The unit turned an operating profit of $431 million, against a loss of $1.7 billion a year earlier.

SpaceX credited new cloud services agreements, wider use of its Grok chatbot and its acquisition of Cursor, an artificial intelligence coding startup. Its cloud customers include Anthropic, which agreed in May to pay nearly $45 billion over three years for computing power at SpaceX’s Colossus data centres, and Google, which signed on in June to pay $920 million a month from October through June 2029.

Spending remains heavy. SpaceX invested $19.6 billion in the quarter, $16.4 billion of it in AI, bringing capital spending for the first nine months of the year to $48 billion. Computing capacity reached 1.7 gigawatts, up from 0.6 gigawatts a year earlier. Musk said he was “fairly confident” the company could bring an additional 10 gigawatts online in 2027, on top of the roughly 2.5 to 3.0 gigawatts expected by the end of this year, and that power, cooling and electrical equipment were “somewhat of a limiting factor”.

Starlink revenue grew 69 percent to $5.2 billion and consumer subscribers reached 13.6 million, though average monthly revenue per consumer fell to $69 from $83 a year earlier. SpaceX also completed the first revenue-generating flight of Starship, the rocket central to Musk’s Mars ambitions and to deploying satellites at scale, carrying 26 next-generation Starlink satellites into orbit.

For South African readers the numbers are a reminder of how far the satellite internet business has moved from a niche service. Starlink does not hold a licence to operate in South Africa, and the 13.6 million subscribers and the falling revenue per user describe a global customer base rather than a local one. The quarter’s real centre of gravity is the data centre build-out behind it, and the power and cooling constraints Musk named are the same ones that shape every serious computing investment on this continent.