SpaceX Has Already Lost AI Race
SpaceX is pouring billions into AI while renting out its data centers to rivals, yet its models trail the competition and its consumer apps barely register. Something does not add up.
Someone, please tell me if I’m wrong. SpaceX (NASDAQ: SPCX | SPCX Price Prediction) said its capital expenditures were $18.4 billion in the quarter that just ended. Almost all of the spending is going toward AI. By the same token, Oracle (NASDAQ: ORCL) says it will spend a ton more. Yahoo reports, “Oracle expects capital expenditures of up to $95 billion in fiscal 2027, though it expects repayments from customers for up to $25 billion of that.” And that number is small by megatech company standards.
Microsoft (NASDAQ: MSFT) says capex in the current fiscal year will be $175 billion. In the current quarter, it will be $50 billion. Amazon (NASDAQ: AMZN) says it will be $220 billion this year, which is a revision upward from the number it gave three months ago. Meta (NASDAQ: META) has put it as high as $145 billion for the year. Total across these large companies, and a few which are slightly smaller, the sum for 2026 is $860 billion, up 80% year over year.
I don’t understand it. The market hammered SpaceX, in part because of the AI spending plan. But they are tiny.
It’s harder to figure out why SpaceX rents out data center capacity. Why doesn’t it use it for its own AI buildout? CNBC reports, “While SpaceX’s own models are seen as behind OpenAI and Anthropic, the company is positioning itself as an alternative cloud player by renting out the computing capacity that it is building with Nvidia chips.” Some of that appears to involve providing service to Google and Anthropic.
Here’s another thing that’s hard to understand. When it comes to enterprise software spending, OpenAI, Anthropic, and to a lesser extent companies like Microsoft and Alphabet (NASDAQ: GOOG) show up. Where is SpaceX?
Jump way across the AI industry to AI assistants? xAI’s Grok lags well behind leaders in Apple’s App Store. Those leaders include Claude, ChatGPT, and Gemini.
Something is missing. If xAI’s capex spending is at the low end among the industry’s leaders, its enterprise adoption is low, and its consumer market share is low, what’s going on?
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
