SpaceX’s $7.8B Q2 Revenue, AMD Stock Falls Despite 50% Revenue Growth, China’s New AI Gold Rush

**Stephanie Palazzolo** (0:13)
Welcome, everyone, to The Information's TITV. My name is Stephanie Palazzolo, and it's Wednesday, August 5th. First up, we have reactions to SpaceX's first ever earnings report, and we'll discuss the company's big ambitions for its Starlink Mobile business. We'll also dive into AMD's second quarter results. Shares have fallen since the report despite strong revenue growth. Plus, we have new reporting from our Asia Bureau about a new trend emerging.
Chinese founders are looking to launch their own AI labs focused specifically on so-called world models. We'll hear from Juro Osawa, who wrote the story, and our Asia Bureau Chief, Jing Yang. It's going to be a great show, so let's get on into it.
SpaceX's first quarterly earnings report since its IPO showed the company is spending heavily on AI. The company did report $7.8 billion in revenue, up 92% from the prior year. Here to comment on the report is Tim Farrar, president at TMF Associates. Tim, welcome back to the show.

**Tim Farrar** (1:14)
Great to be here.

**Stephanie Palazzolo** (1:16)
Initial reactions, what are your first reactions to the report?

**Tim Farrar** (1:20)
Well, I think the headline numbers are very good in terms of revenue growth. Subscriber growth was higher than I expected at 1.7 million new Starlink subscribers. That's all great, especially when they raised prices at the end of May, which many people expected to cause a slowdown.
That's all great and they express a lot of ambitions for huge amounts of growth next year. I think the challenge is really, Elon Musk said an awful lot of things that mostly seem quite crazy, things like launching Starship every day next year. It's hard to pass what's real and what's just him stating ambitions that are not going to be realized. That makes it really hard to predict what's going to happen next year. But they said a lot about taking on the telcos and competing more aggressively there with Starlink Mobile. I think that's a really interesting story that's going to run and run in the coming months.

**Stephanie Palazzolo** (2:26)
Before we get into Starlink Mobile, I am curious if you had to rank the top craziest comments from the earnings report yesterday from maybe most believable to least believable. I'm curious how that ranking would fall. I know there's some big numbers thrown around.

**Tim Farrar** (2:40)
Yeah, I mean, they talked about a trillion dollars of revenue in 2013 They talked about 10 gigawatts of AI data centers next year. They talked about daily Starship launches. I mean, I think the hardest one to believe are the numbers for next year.
People can take a view on revenue growth over a four-year period, and it probably won't be anywhere close to a trillion dollars, but that's not going to matter in the short term. What is going to matter in the short term is getting Starship ramped up and building more data centers. I think both, in my mind, the ambition to do what he said for next year is not credible.

**Stephanie Palazzolo** (3:28)
You mentioned Starlink Mobile, which is obviously a very important business for them, something that they're talking a lot about.
We didn't actually get revenue numbers for that business segment yesterday, but we've previously reported that it's a pretty portion of their total sales. What do you make of SpaceX not disclosing that number yesterday?

**Tim Farrar** (3:48)
Yeah. I mean, they didn't give much of a breakdown at all between the enterprise and government and mobile segments. That's not a great sign. They didn't even give the metrics about monthly average users that they gave in the S1. And so a lot of this talk about competing with the telcos, in some ways is posturing to get a better deal out of T-Mobile. You've reported previously that that deal is only worth about $100 million over four years. And clearly, SpaceX needs an awful lot more than that to justify the $20 billion it's investing in.
Spectrum, not to mention the billions of additional dollars that they're investing in new satellites. So, you know, there's this big knife fight going on with the telcos and the announcements that they're going to try and compete with those telcos and build a terrestrial network are all feeding into that debate on the SpaceX side. And on the telco side, we're seeing a lot of comments about how this isn't really, D2D isn't really that necessary. It's a complimentary service. It's only for national parks. It's a tiny percentage of usage. And it's not a core part of the business. So, we're seeing a lot of that posturing on both sides, a big fight. And at the end of the day, it's about how much the telcos are prepared to pay.