SpaceX posted a US$4.4 billion quarterly profit as AI revenue surged, while Tesla and SpaceX courted Korean suppliers for their Terafab chip project in Texas. Musk is targeting production in 2028 as the companies also explore a potential merger.
ServiceNow’s AI Passport aims to govern what enterprise AI agents can do, using signed credentials and runtime checks. With NVIDIA supporting enforcement, the test is whether permissions can be upheld and revoked across third-party systems as businesses move agents into production safely at scale.
Nine years late, Tesla’s Roadster flipped, hovered and leapt over its siblings at a SpaceX rocket test site. Shares jumped, then fell. Social feeds caught fire. What Musk really unveiled was one engineering stack wearing two corporate badges. Success is not guaranteed. Excitement, as ever, is.
SpaceX posted a US$4.4 billion quarterly profit as AI revenue surged, while Tesla and SpaceX courted Korean suppliers for their Terafab chip project in Texas. Musk is targeting production in 2028 as the companies also explore a potential merger.
SpaceX has reported a US$4.4 billion third-quarter profit and a 161% increase in revenue, as it and Tesla approach about 10 South Korean semiconductor suppliers for their planned Terafab chipmaking complex in Texas.
The results underscore the growing importance of AI to SpaceX, while the supplier talks show the companies beginning to assemble the manufacturing network behind their chip ambitions.
Revenue reached US$14.58 billion in the three months to 30 September, exceeding the US$12.72 billion expected by analysts surveyed by LSEG. SpaceX reversed a US$1.05 billion net loss a year earlier and reported operating income of approximately US$2.8 billion.
Adjusted earnings of US45 cents a share also beat expectations of US13 cents. Shares rose about 8% in extended trading following the results on 20 October.
On the earnings call, chief executive Elon Musk said Terafab was targeting volume production of AI chips in the third quarter of 2028. Reuters reporting summarised by TrendForce said Musk acknowledged that production could begin in either the third or fourth quarter, with a first functional SRAM test chip targeted for May or June 2027 at an Austin research facility.
Those dates remain development targets, rather than completed manufacturing milestones.
SpaceX’s AI division, incorporating the xAI business acquired earlier this year, generated US$7.56 billion in quarterly revenue, up from US$813 million a year earlier.
It became the company’s largest business by revenue, supported by new cloud-services agreements, the acquisition of coding company Cursor and increased adoption of Grok products. The division reported US$431 million in operating profit.
Starlink remained the larger contributor to operating profit. SpaceX’s connectivity division generated US$5.25 billion in revenue, up 69%, and approximately US$2.37 billion in operating income. Starlink subscriptions increased to 13.6 million, from 12 million in the previous quarter.
The launch business generated US$1.77 billion in revenue and recorded a US$7 million operating loss.
The expansion also carries substantial costs. SpaceX reported US$19.6 billion in quarterly capital expenditure, including more than US$16.4 billion allocated to its AI business. The spending puts Terafab within a much broader investment programme spanning computing capacity, data centres and supporting infrastructure.
Tesla and SpaceX are discussing Terafab supply arrangements with about 10 South Korean materials, components and equipment manufacturers, according to Korean trade publication The Elec.
More than half have reportedly signed non-disclosure agreements, although the discussions range from introductory meetings to exchanges of samples and design information.
Terafab representatives visited around 10 Korean companies’ stands on 13 October, the opening day of SEMICON West in San Francisco. The event ran until 15 October. The outreach covered equipment, process materials, piping components and semiconductor testing products.
HPSP has agreed to supply one high-pressure hydrogen annealing system for Terafab’s research and development line. It is the only firm equipment commitment identified in the supplier report: a single research tool, not an order equipping the proposed commercial production facility.
Other discussions are progressing at different stages. Hanmi Semiconductor is discussing thermocompression bonders, with a sales executive visiting at SpaceX’s request. ISC has begun exchanging test-socket samples and design information.
KoMiCo, a cleaning subsidiary of MiCo, reportedly signed a three-party NDA with Tesla and SpaceX covering cleaning services for a Texas research pilot line.
The distinction matters for the project’s readiness. Supplier engagement is advancing, but the reported NDAs and technical discussions should not be treated as awarded production contracts.
The Texas governor’s office announced the Grimes County project on 6 August, describing an initial capital investment of more than US$16.8 billion and 3,000 new jobs.
The state extended a US$30 million Texas Enterprise Fund grant to SpaceX and identified Terafab as a qualifying project under its Jobs, Energy, Technology and Innovation programme.
The proposed facility would combine logic-chip production, memory and advanced packaging under one roof. In the state announcement, Musk said the plant would manufacture AI chips for use “on Earth and in space”.
The Elec’s reporting describes an initial production facility capable of processing about 100,000 wafers a month before 2030, with a longer-term ambition of 1 million wafers a month within 10 years.
Musk’s latest earnings-call comments set a more specific target of volume production during the second half of 2028, although the timing and eventual scale remain subject to execution.
Terafab is also developing against the backdrop of a possible closer corporate relationship between Tesla and SpaceX.
Musk said on the earnings call that both boards had formed special committees of independent directors to examine a potential merger. He described a combination as a “good idea”, citing opportunities to cooperate on software and chips, but said shareholder support would be necessary. No merger agreement was announced.
For now, the earnings results and supplier outreach point to two distinct stages of the strategy: SpaceX’s AI and connectivity businesses are already generating substantial revenue and operating profit, while Terafab remains a manufacturing project with research equipment commitments, supplier negotiations and ambitious production deadlines.
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Nine years late, Tesla’s Roadster flipped, hovered and leapt over its siblings at a SpaceX rocket test site. Shares jumped, then fell. Social feeds caught fire. What Musk really unveiled was one engineering stack wearing two corporate badges. Success is not guaranteed. Excitement, as ever, is.
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