The chart below shows the issue. Total 2025 investments totaled $19.5 billion, yet the 1Q2026 investment alone was $16 billion. So unless the first quarter is an outlier, we are looking at $80 billion spent this year with most of it on an AI business that grew 22% in 2025 versus openAI's 230%. Note that xAI's recent deal with Anthropic does not necessarily improve the situation. This contract involves using xAI's data centers to train Anthropic large language models. Contracts of this nature are often closer to letters of intent than hard revenue commitments. And while such a deal might generate a lot more revenue, it will probably also require Starlink to spend more money on power, buy more GPUs, and the like. In other words, this deal might increase the company's negative cash flows.
Starlink's current debt at the end of the first quarter of 2026 was $26 billion. The IPO will provide ample cash to wipe the slate clean, but there is a clear risk given that Musk is CEO for life (due to a special class of voting shares) that he burn through all that cash in a vain attempt to make xAI competitive.
