SpaceX hit by surging AI costs as insiders prepare to sell stock

Capital expenditures related to its xAI unit, which runs the Grok service, hit $15.8 billion, more than double what they were in the first quarter.

For a rocket company, SpaceX is spending a lot of money to build out its AI capacities.

Too much, according to investors.

The company reported revenue in its first quarterly update as a public company that surpassed analysts’ expectations. Most of its revenue came from its Starlink satellite offering.

But investor focus turned to capital expenditures related to its xAI unit, which runs the Grok AI service. Those hit $15.8 billion, higher than expectations of $13.09 billion, according to Bloomberg News data, and about double the previous quarter. The AI spending also accounted for most of SpaceX’s overall $18.4 billion quarterly spending on capital expenditures.

The report caused SpaceX shares to reverse a healthy run-up during regular trading hours Tuesday. The stock fell over 10% before Wednesday’s market open, after having surged 9% ahead of its report Tuesday.