ARK Invest CEO Cathie Wood has stated that SpaceX (SPCX) had no immediate need for an initial public offering as long as its Starlink business continued to generate cash. However, Wood noted that SpaceX’s pivot toward orbital data centers has fundamentally changed the company's capital requirements.
In an interview with Livewire, Wood explained that Elon Musk’s decision to enter the orbital data center market required significant capital and the scaling potential that public equity markets provide. SpaceX reportedly raised approximately $85.7 billion in its June IPO, with the company indicating that the proceeds would fund AI compute infrastructure alongside launch systems and satellite capacity.
According to company filings, SpaceX’s AI business recorded a loss of $6.36 billion in 2025, while its Connectivity business, primarily Starlink, generated $4.42 billion in operating income. The financial picture shifted further in February when SpaceX acquired xAI, bringing the developer of Grok and its expensive data center buildout into the company.
SpaceX argues that orbital computing could address constraints facing terrestrial data centers, such as electricity access, land use, cooling water, and permitting regulations, by utilizing solar energy in orbit. The company’s AI capital spending reached $15.83 billion in the second quarter, accounting for about 86% of total quarterly capital expenditures.
While SpaceX has not explicitly stated that orbital data centers were the sole reason for the IPO, the company’s spending highlights the sharp increase in capital needs driven by AI. Microsoft’s Project Natick serves as a cautionary example; while the underwater data center was a technical success, it was never scaled into a commercial business due to the difficulty of replacing rapidly improving AI chips and the higher costs associated with the sealed design.
Regarding the timeline for orbital data centers, SpaceX CEO Elon Musk has expressed confidence that the company will launch AI computers from Nvidia (NVDA) into orbit in 2027, with significant scale expected in 2028. Prediction traders, however, remain skeptical, with Kalshi assigning a 30% probability to the launch of a 1-megawatt orbital data center before 2031.
