SpaceX's confidentially filed S-1 has begun to leak details that reframe the company many investors still associate with rockets. The filing positions SpaceX as an "AI-first" business heading into what reporting now describes as the largest IPO in market history — at a target valuation between $1.75 trillion and $2 trillion. The catch, surfaced in coverage on April 24-26, is that the AI unit at the heart of the story barely exists as a revenue business, and is currently burning cash that Starlink earns.
The numbers behind the pitch
Starlink continues to do the heavy lifting. According to figures cited from the filing, Starlink generated $11.4 billion in revenue and $4.4 billion in operating profit in 2025, roughly doubling year over year. The AI division — which absorbed xAI after SpaceX's February merger — tells the opposite story. It posted an operating loss of $6.4 billion in 2025, up from $1.6 billion a year earlier.
Capital allocation tilts even further. SpaceX's total capex hit $20.7 billion in 2025, of which $12.7 billion went to AI alone — more than the company spent on its space and connectivity businesses combined. Capital spending exceeded revenue by roughly $2 billion at the group level.
A $28.5 trillion TAM, mostly hypothetical
The S-1's most aggressive claim is its addressable market. SpaceX puts its total addressable market at $28.5 trillion. More than 90% of that — $26.5 trillion — is attributed to AI, with $22.7 trillion earmarked for enterprise customers alone. Space and broadband, the parts of SpaceX with audited revenue, account for a small fraction of the TAM the company is pricing into the deal.
The filing also flags a deferred decision: SpaceX holds an option to acquire Cursor, the AI coding startup, for around $60 billion, or to enter a partnership at roughly $10 billion. Either path is contingent on post-IPO outcomes.
Why analysts are pushing back
Market strategists quoted in coverage of the filing have framed the offering as asking buyers to fund a future they cannot yet see in the financials. One described the AI build-out as something "that still needs to show up more clearly in the numbers." Another compared SpaceX's cash-burn profile to "a late-stage startup rather than a trillion-dollar incumbent" — a company financing AI ambitions out of rocket and satellite revenue, rather than the established profit engines that fund hyperscaler AI capex at Microsoft, Google, or Meta.
What it signals
For public investors, the SpaceX deal will be a stress test of how much narrative AI growth markets are willing to underwrite without operating proof. For competitors, the disclosure makes Starlink's true margin profile public for the first time — and confirms that the rest of the industry will be competing against a satellite cash machine that is now openly being redirected at AI infrastructure and talent.
