Elon Musk’s SpaceX has secured a multibillion-dollar artificial intelligence deal, but the win comes at a time when the company is facing intense market pressure. Over the past three trading days alone, SpaceX has lost nearly $600 billion in market value, while its total decline from recent highs is approaching the $1 trillion mark as investors continue to dump the stock.
The company has signed an agreement with Reflection AI, an open-source AI startup, giving it access to some of the world’s most powerful AI chips housed inside SpaceX’s giant data center in Memphis, Tennessee.
According to CNBC, as part of the deal, Reflection AI will begin paying SpaceX $150 million every month starting July 1, 2026. If the agreement remains in place through 2029, the total value could reach about $6.3 billion, according to CNBC. The contract allows either company to walk away with 90 days’ notice, though only after the first three months have passed.
Why Reflection AI matters more than it might seem
Reflection AI is not following the same path as companies such as OpenAI or Anthropic.
Instead of building closed AI systems that users cannot fully inspect, Reflection is focused on open-source AI models that can be studied, modified and run independently.
That approach has gained more attention recently after Anthropic restricted access to its Fable and Mythos models. The move raised concerns among governments and businesses about relying too heavily on AI systems controlled by a single company.
Reflection was last valued at around $25 billion and has yet to release its flagship public AI model. Despite that, the startup has already established ties with major institutions. Its work has been connected to the Department of Energy’s Genesis Mission as well as parts of the Pentagon’s AI initiatives.
For Reflection, the SpaceX deal provides the computing muscle needed ahead of its first major model launch and supports its goal of becoming an “American open intelligence” company.
Despite the deal, stocks keep falling
While the Reflection agreement sounds impressive, it arrived during one of the toughest periods SpaceX has faced since its stock market debut. SpaceX went public on June 12, 2026, at $135 per share.
Investor excitement initially pushed the stock higher. Within days, shares climbed to around $225, briefly giving the company a market value that surpassed even Amazon and Microsoft. The rally did not last. The stock soon reversed course, falling nearly 5% on one trading day and another 3.6% the next.
Then came the biggest blow. Shares plunged 16.4% in a single session, the worst one-day drop since the company’s IPO. The stock fell to around $154.60, only slightly above its original listing price. Over just three trading days, more than $600 billion in market value was wiped out.
What is worrying investors?
Several concerns hit the market at the same time.
The first was SpaceX’s announcement that it plans to issue its first-ever corporate bonds, reportedly worth around $20 billion. The funds will be used to repay a bridge loan that helped finance Musk’s earlier merger of SpaceX and xAI.
Bond offerings often make investors nervous because they raise questions about a company’s debt levels and cash needs. SpaceX reported a net loss of $4.9 billion in 2025 and lost another $4.28 billion during the first quarter of 2026 alone, so this pattern itself is concerning.
Another issue is the planned acquisition of Cursor. The $60 billion all-stock deal was announced shortly after SpaceX’s IPO and led some investors to wonder whether the company is expanding too aggressively.
Analysts at Goldman Sachs and Evercore ISI have estimated that SpaceX’s spending could exceed $1 trillion by 2031, with much of that money directed toward AI infrastructure and data centres.
However, investors are weighing concerns raised by MSCI, which assigned SpaceX its lowest ESG rating of CCC. The ratings firm cited governance issues and various controversies surrounding the company.
Some analysts believe the current debate goes beyond financial results. They argue that buying SpaceX stock today is largely a bet on Musk’s vision and leadership rather than on the company’s present-day earnings. That can create dramatic swings in investor sentiment depending on the latest headlines.
SpaceX’s new business beyond rockets
Not long ago, SpaceX was known almost entirely for rockets and space launches. That changed with Starlink, the company’s satellite internet business. Now, SpaceX appears to be building an AI infrastructure for computing power.
Its Colossus data centre was originally created to support Grok, Musk’s AI chatbot. However, the company soon realised it had more computing capacity than Grok alone required. At the same time, AI firms around the world were struggling to secure enough advanced chips.
That created a new opportunity. SpaceX began leasing its extra computing capacity to outside companies willing to pay for access. Reflection AI joins a growing list of customers that already includes Anthropic, Google and Cursor.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.