SpaceX shares tumbled for a third straight session, down around 9% late in the U.S. cash morning, after the Elon Musk-led company said it would sell investment-grade bonds for the first time.
However, a new headline crossed around 11:05 a.m. ET via Axios, reporting that Reflection, the Nvidia-backed open-source AI startup, had signed a major compute deal with SpaceXAI.
Under the deal, Reflection will pay SpaceXAI $150 million per month starting next Wednesday, July 1, through 2029, following an initial ramp period.
The deal gives the startup, founded by former Google DeepMind researchers Misha Laskin and Ioannis Antonoglou, access to Nvidia’s Grace Blackwell Ultra AI computing chip, also known as GB300, which is necessary to train its models.
Earlier this year, The Wall Street Journal described Reflection as the “DeepSeek of the West” because the AI lab aims to build open-weight, frontier-scale AI models as a direct alternative to China’s DeepSeek.
The deal highlights the circular flow of the AI boom, something we have noted countless times (see here and here). Nvidia invested $800 million in Reflection, which will now use Nvidia chips purchased by SpaceX. This allows the startup to avoid the multibillion-dollar burden of building out its own data centers and instead lease compute from hyperscalers.
With shares down 9% in late-morning trading, the Reflection-SpaceXAI deal was not enough to lift the stock, which is now down 25% from last Tuesday’s high of $225.
The Reflection-SpaceXAI deal also shows that SpaceX's massive compute buildout is not just for internal AI chatbots, but is also becoming a revenue-generating business, catering specifically to external AI frontier labs seeking high-end training capacity.
It may suggest that internal compute demand has been lackluster...
Last week, Yann LeCun, founder of AMI Labs, called xAI a "failure," adding that he expects it won't be able to compete with OpenAI and Anthropic.
The deal follows a similar deal that Anthropic made with SpaceX to expand cloud computing capacity.