SpaceX is heavily reliant on Starlink for growth and profit as it marches toward Nasdaq listing

Elon Musk's SpaceX is best known for its reusable rockets, and has been capturing headlines this year for its high-priced move into artificial intelligence through its merger with xAI. But as the company pitches investors ahead of its mammoth IPO, there's another part of its business that dwarfs the rest in terms of growth and profits: Starlink.

In its long-awaited prospectus on Wednesday, SpaceX said its connectivity unit, which is primarily comprised of Starlink, generated $11.39 billion in revenue last year, accounting for 61% of total sales. That number went up to 69% in the first quarter of this year.

Additionally, Starlink is the company's profit engine. It was the only profitable division last year, generating income of $4.42 billion, while the rocket launching unit, which includes contracts with NASA and the Department of Defense, lost $657 million, and the AI division had a deficit of $6.35 billion.

Starlink provides global high-speed internet coverage using a constellation of more than 10,200 satellites in low Earth orbit, a region of space that's within 1,200 miles of Earth's surface. Since launching its first batch of satellites in 2019, Starlink has emerged as the leader among internet-from-space providers. It's now available on all seven continents and in over 160 countries.

Musk, the world's richest person, has ambitions to colonize Mars, and even has a large incentive pay plan tied to his ability to do so. He also wants to build orbital data centers and has visions of being a key player in the AI race that's currently being led by OpenAI, Anthropic and Google.

Those things may or may not happen, but in the meantime, Starlink has a dominant position in a market that Amazon and others are chasing. Starlink's user base more than doubled to 10.3 million in the first quarter from a year ago. Earlier this year, SpaceX filed with the Federal Communications Commission to launch up to 1 million low Earth orbit satellites.

SpaceX launched Starlink in 2015 as a way to take advantage of the company's access to space, creating a satellite constellation that could underpin a powerful internet service. Starlink has for years been viewed as a cash cow that can help fund SpaceX's other costly efforts.

In its IPO filing, SpaceX said capital expenditures in the first quarter totaled $10.1 billion, more than doubling from a year earlier. The vast majority of those costs — $7.7 billion — were for AI.

Starlink has emerged as a popular offering with consumers, but it's also used by dozens of airlines, including United, Southwest and Hawaiian, for offering in-flight wireless internet. Musk said in December that Starlink's commercial service was "by far" the largest contributor to SpaceX's revenue.

Starlink cracked the Brand Finance top 500 rankings for the first time in 2026, with an estimated brand value of $5.19 billion.

Competition is on the rise. OneWeb, operated by France's Eutelsat, has a constellation of more than 600 satellites. Amazon has also sent up more than 300 satellites over the past year as it inches closer to launching its Leo service, which will eventually include a constellation of roughly 7,700 satellites.

Jeff Bezos' Blue Origin also plans to deploy about 5,400 satellites, beginning in the fourth quarter of 2027. China's Guowang, which has around 163 satellites in orbit, is aiming to build out a mega constellation.

SpaceX named more than 20 companies as competitors to Starlink in its prospectus, including Amazon, Blue Origin, Viasat, AT&T and T-Mobile. Some competitors are also customers, using SpaceX launches to get their satellites into orbit.

Musk brought Starlink internet service into U.S. federal government offices when he was leading DOGE, an effort by the Trump administration to slash the federal workforce. States, charities and non-governmental organizations frequently purchase Starlink terminals and service after natural disasters or other emergencies. SpaceX also runs a classified tier of its Starlink service, called Starshield, for military use.

While the brand is gaining resonance with consumers, it's not universally beloved, due in part to Musk's endorsements of far-right leaders around the world. And some regulators overseas view Starlink as a security risk because it is foreign-owned.

In March, Namibia's telecommunications regulator denied Starlink's application for an operating license, saying it didn't comply with local ownership rules. Musk, who was born in South Africa and is a naturalized U.S. citizen, has falsely accused the South African government of denying Starlink a license to operate there because he's white.

South Africa's Electronic Communications Act requires foreign-owned communications licensees to sell 30% of equity in their local subsidiaries to historically disadvantaged groups. The South African regulator ICASA is weighing a proposal that would make it easier for SpaceX, and other foreign operators of satellite internet services, to obtain licenses.

Meanwhile Taiwan's government has ruled out deploying Starlink because SpaceX wouldn't agree to a joint venture with a local partner, the Financial Times reported. Taiwan officials have pointed out Musk's business ties in China, and his previous comments referring to Taiwan as an "integral part of China."

Starlink has also been a contentious player in Ukraine, following Russia's invasion of its neighbor in 2022. That year, according to Reuters, Musk ordered SpaceX to actively shut off Starlink coverage over a battlefield in Kherson, hampering Ukraine's efforts to reclaim the territory. SpaceX and Musk denied the report. SpaceX took measures this year to stop Russia's unauthorized use of Starlink to guide some of its long-range drones to attack Ukraine.

SpaceX said in its IPO filing that further expansion of its Starlink business, including satellite deployments and spectrum distribution, is dependent upon regulatory and licensing approvals.

"There can be no assurance that our applications to renew, modify, or expand our authorizations will be granted on a timely basis, or at all, or without additional conditions," the company wrote.

Starlink also faces challenges around retiring and replacing satellites in its megaconstellation. Satellites in geostationary orbit have a lifespan of around 15 years, but Starlink satellites are launched into lower orbit and last about three to five years.

SpaceX said in the risk factors section of its filing that space is "inherently hostile," and that Starlink satellites are subject to harsh conditions in orbit that could cause them to malfunction or fail.

Excessive space debris could trigger what's known as the Kessler syndrome, a catastrophic chain reaction of collisions in space. Scientists have pointed to the increased risk of Kessler syndrome as one reason to object to SpaceX's proposal to launch 1 million satellites into orbit.

Following SpaceX's FCC proposal, DarkSky, a nonprofit that advocates for reducing light pollution, wrote an open letter to the company urging it to commit to "true satellite invisibility standards," conduct an environmental assessment before it expands its constellation and to engage the astronomical and environmental communities about its plans.

SpaceX's proposal would increase the number of satellites in the sky "by nearly 70 times," the group wrote. "Without meaningful oversight, this project could permanently alter the night sky as we know it," DarkSky said.

SpaceX has announced plans to build and launch orbital data centers, comprised of swarms of satellites equipped with graphics processing units and powered by solar photovoltaics. Earlier this year, Musk said data centers in space would be the cheapest way to train AI, "and that will be true within two years, maybe three at the latest."

Experts say it will take much longer for orbital data centers to become feasible, if they ever do, in part because rocket launches remain capacity constrained and expensive. Orbital data centers would also require cooling systems and chips that can withstand extreme temperatures, as well as protection from radiation.

SpaceX said in the prospectus that it expects to deploy space-based data centers as early as 2028. Its long-term vision would require thousands of rocket launches per year, according to the filing.

The company has developed thermal control systems that disperse heat generated by data centers, and said in Wednesday's filing, "We have already solved the hardest part in the development of AI compute satellites."

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