SpaceX and Tesla Reports Test Musk’s AI Spending

STARBASE, Tex., Oct. 20 — SpaceXSpaceX reports third-quarter results after the market closes on Tuesday, its second report as a public company, and Tesla follows on Wednesday. Between them, the two companies Elon Musk runs will show how much they are spending on artificial intelligence and how much it is bringing in.

So far, spending far outruns revenue. In the second quarter, SpaceX’s AI segment, which houses the xAI business it absorbed in February, had capital spending of $15.8 billion and revenue of $2.6 billion.The AI SegmentIts revenue includes advertising, Grok and X subscriptions and contracts selling customers access to its computing capacity. SpaceX put the segment’s nameplate compute at 1.4 gigawatts in the second quarter, up from 1.0 in the first. Tesla’s proxy, filed on Monday, dates the merger: xAI Holdings became a wholly owned subsidiary of SpaceX on Feb. 2.

The results “will test whether Starlink’s steady growth and Tesla’s car profits can fund the AI spending powering the merger debate,” Reuters wrote in a preview on Monday. Analysts expect SpaceX’s revenue to reach about $12.74 billion, according to LSEG data cited by Reuters; in the second quarter it had revenue of $7.8 billion and a net loss of $541 million. Chris Weston of Pepperstone cites a consensus of about $6.4 billion in AI revenue, without saying whose it is. A Bloomberg consensus cited by Pepperstone puts SpaceX’s third-quarter capital spending at $19.61 billion, up from $18.37 billion in the second quarter, and its free cash flow at negative $11.6 billion.

SpaceX ended June with $100 billion in cash, cash equivalents and marketable securities, it said in August. “Need for additional financing remains a key overhang for sentiment, especially given the recent neocloud debt saga,” Adam Jonas, a Morgan Stanley analyst, wrote in a note published on Monday, Yahoo Finance reported.

SpaceX’s shares closed on Monday at $147.96, up 1.3 percent and above the $135 price of its June offering.

Tesla reports after the close on Wednesday and takes questions on a webcast at 5:30 p.m. Eastern. It delivered 486,532 vehicles in the third quarter, 2 percent fewer than a year earlier but more than the roughly 462,000 Wall Street had expected, according to Zacks. The Zacks consensus calls for adjusted earnings of 44 cents a share, down 12 percent from a year earlier, on revenue of $27.78 billion.

Tesla’s own spending is climbing. Its capital expenditures were $5.8 billion in the second quarter, up 142 percent from a year earlier, and its free cash flow was negative $1.1 billion. Tesla has said capital spending will exceed $25 billion this year, Reuters noted. In the proxy’s opening letter, Robyn Denholm, Tesla’s chair, cites investment in “additional data center capacity to train our SI systems” — SI for “real-world super intelligence.” “This year, we began producing Cybercab at Gigafactory Texas,” she wrote.

Tesla’s proxy, filed on Monday for its Dec. 3 annual meeting, carries three proposals and no vote on a merger. They are the re-election of Mr. Musk, Ms. Denholm and JB Straubel as directors, a non-binding vote on 2025 executive pay and the ratification of PricewaterhouseCoopers as auditor.

The proxy reports Mr. Musk’s 2025 compensation as $158.4 billion, “the vast majority of which reflects an accounting-driven valuation” of his 2025 performance award. That award accounts for $132.3 billion, its maximum grant-date fair value if every performance condition is met; an interim award he forfeited in April, $26.1 billion. None of the performance award’s shares has yet been earned.The AwardThe 2025 award comes in 12 equal tranches. Each is earned only when Tesla reaches a market-capitalization milestone and one of 12 operational milestones relating to strategic product goals or adjusted EBITDA. Mr. Musk must then hold the shares for five years, with limited exceptions. In a change in control of Tesla, the filing says, unearned shares may become earned “based solely on market capitalization milestones.”

The filing also counts money moving between Mr. Musk’s companies. Tesla booked about $430.1 million of revenue from xAI in 2025, mostly for Megapack energy-storage products. Tesla agreed in January to invest about $2 billion in xAI; the merger converted that into a right to buy SpaceX shares, and Tesla completed the purchase on March 12.

Barclays suggested last week that a merger could be announced before the annual meeting, with SpaceX the likelier acquirer, Reuters reported. In an all-stock deal, Barclays estimates, Mr. Musk would hold about 37 percent of the equity and 56 percent of the votes. Neither company nor Mr. Musk has officially committed to favoring a deal, Reuters noted.

Tesla’s answers to a special order from the National Highway Traffic Safety Administration, in an audit of how it certified the Cybercab as meeting federal safety standards, are due Oct. 30. Meta also reports after the close on Wednesday. For SpaceX, the figures to watch are AI revenue against the roughly $6.4 billion consensus Pepperstone cites and the outlook for capital spending; for Tesla, its spending and what it says about the Cybercab.