SpaceX targets $1.75T IPO after Q1 loss

Elon Musk's SpaceX filed for an initial public offering with a valuation target of approximately US$1.75 trillion on May 21, following a US$4.28 billion loss for the quarter ended March 31. The company's filing reveals that heavy spending on data-center computing masks profitability in its core Starlink satellite internet division, with investors betting that Starlink revenue can fund the Starship rocket program and support a broader push into artificial intelligence. Traditional valuation measures do not fully explain the price tag, though some analyses suggest the satellite and space businesses alone could support a near US$2 trillion valuation.

Starlink Profitability Supports Broader Losses

Starlink was SpaceX's only profitable division last year, generating US$4.42 billion in revenue. In the first quarter, Starlink accounted for 69% of total company sales, while its subscriber base more than doubled year-over-year to 10.3 million users.

The quarterly loss was primarily driven by planned spending on future data-center capacity. SpaceX's data-center computing unit recorded a loss of US$6.35 billion for the full prior year, with first-quarter capital spending on data-center computing reaching US$7.7 billion.

Orbital Data Centers: Planned but Unproven

SpaceX's IPO prospectus discloses plans to build and launch orbital data centers, with space-based facilities potentially beginning deployment as early as 2028. However, the filing acknowledges significant uncertainties: orbital data centers remain unproven and may never work as a business model.

Cost represents a major barrier. Current analysis estimates the cost of an orbital facility at approximately three times that of a terrestrial equivalent. Additionally, orbital data center feasibility faces constraints from limited launch capacity and high launch costs, which could delay or prevent viable deployment.

The offering represents a test of investor appetite for a potential shift in cloud infrastructure—the computing systems that store and process data for online services.