SpaceX's AI unit drove most of its swing to a profit, and now it plans to nearly double spending

SpaceX made an operating profit in the September 2026 quarter, and most of the improvement came from its AI business. Its Super Intelligence segment, known as SI, rents capacity in its AI data centres to outside customers and also includes Cursor, a newly acquired business, and the Grok chatbot. SI supplied about three-quarters of the $6.8 billion rise in revenue from the quarter before. Management's answer is to build faster. The chief financial officer, Bret Johnsen, guided capital spending for the final quarter of the year to $35 billion to $40 billion, nearly double what the company spent last quarter.

The swing in profit was large. Operating income went from a loss of $143 million in the quarter before to a profit of $2.8 billion. Yet the profit itself still comes mainly from Starlink: the Connectivity segment earned about 85% of last quarter's operating income, because SI's result carried a large share-based pay charge tied to the Cursor acquisition.

Those data centres are where the cash goes. Last quarter the business generated $9.6 billion from operations and spent $19.6 billion on property and equipment, so spending ran at about double the cash coming in, and more than four-fifths of it went to SI. Cash and marketable securities fell by $10.2 billion over the quarter, to $89.9 billion. That cushion is mostly the money raised in the company's stock market listing earlier in the year.

The new range is a break with what management said in August. On that call the CFO guided spending in each of the next two quarters to a level similar to the second quarter's, and the third quarter stayed close to it. The fourth-quarter range roughly doubles the pace. The fourth-quarter range alone equals between about 39% and 44.5% of the cash and securities the company held at the end of last quarter, by our calculation.

How the rest is paid for was described only in outline. Asked about funding, Johnsen pointed to cash from operations, to several pools of debt capital the company is talking to, and to possible financing partnerships with suppliers and customers. His central argument is speed of return: at current prices, he said, new computing capacity pays for itself in less than a year, so it soon starts funding the next round.

That argument rests on pricing management gives only on the call: Johnsen said prices are running slightly above the top of the per-watt price range discussed the quarter before. Elon Musk said SpaceX rents compute at roughly spot-market rates rather than locking customers into long contracts, and that the short contracts are coming up for renewal at better prices: "we see them renewing at higher dollars per watt, not lower dollars per watt". Short contracts let prices rise while computing is scarce, and they would let them fall as quickly if it stopped being scarce. Management also guided revenue for the first quarter of 2027 to $33 billion to $37 billion, more than double last quarter's revenue at the midpoint by Inve's calculation. That gives the compute strategy a dated figure to be measured against.

Some of last quarter's profit will not repeat at the same rate. Gross margin, revenue minus the direct cost of providing it, was 62.4% against 55.3% in the quarter before, and the CFO guided the fourth quarter back towards the second quarter's level, citing one-time benefits and the mix of customers.

In the older businesses, the timetables moved the other way. In August, the company said Starship would probably fly at least once a day within about a year; now Musk expects weekly flights in the first half of 2027 and two a week by the end of that year. Starlink's next-generation direct-to-phone service, on new satellites and newly bought spectrum, which in August was due to start by the end of next year, is now set for early 2028, and the company made fewer launches last quarter than a year earlier.