Elon Musk commits SpaceX to Nvidia chips, shares drop 14%

SpaceX shares fell 14 % on Wednesday after the company’s first earnings call as a public firm. The drop came after Elon Musk said the rocket maker would build its AI systems exclusively on Nvidia chips, a single word that sent Nvidia’s stock up and Advanced Micro Devices (AMD) down. The call was held on Tuesday, and the market reacted instantly to the supply‑chain decision.

Musk explained that SpaceX would use Nvidia’s new Vera Rubin architecture for its AI workloads, both on Earth and in space through the Starmind satellite data‑center program. The announcement gave Nvidia a huge new customer and effectively shut out rival chip makers. SpaceX’s CEO said the Vera Rubin design was the best for the company’s needs, and that the partnership would run from the ground up through the next‑generation satellite network. The deal also made SpaceX one of Nvidia’s largest single buyers, a fact that investors quickly priced into the shares.

The company posted a 92 % jump in revenue to $7.8 billion and an EBITDA of $3.5 billion, with its AI unit growing fastest at 247 % sales. Capital spending hit $18.37 billion, of which $15.8 billion went to AI computing. Contracts for Nvidia cloud sales were $14.1 billion, slightly less than the AI spend. Investors interpreted the exclusive supplier pact as a higher future bill rather than new revenue, which weighed on SpaceX’s valuation. Nvidia’s shares rose 3.4 % after the call, while AMD fell 6 %, its record quarter being repriced after the loss of a high‑profile customer.

The decision leaves SpaceX tied to one vendor and its price, limiting its bargaining power and potentially increasing long‑term costs. Nvidia gains pricing leverage and a key revenue stream, whereas AMD must find new clients to replace the lost work. As SpaceX moves forward with its satellite and AI ambitions, the company will need to balance the benefits of a single‑supplier relationship against the risk of higher expenses. The market will watch how the partnership affects both companies’ earnings in the coming quarters.