SpaceX Lays Off Most of Grok Imagine Team as AI Revenue Hits $7.6B

SpaceX has dismissed the majority of the employees working on Grok Imagine, its AI video and image generator. Meanwhile, the company's AI division continues to surge.

Approximately 60 staff members were laid off over the past week, according to The Information. Just a few individuals are left in the team. SpaceX has not issued a statement.

The Money Comes From Renting Computers to Rivals

During the last quarter, AI contributed $7.6 billion to SpaceX's total revenue of $14.6 billion, marking an 830% increase year-over-year. The Motley Fool attributes that growth to contracts for leasing computing capacity to AI firms like Anthropic and Alphabet, along with increased usage of Grok.

In Q2, the AI solutions and infrastructure segment brought in $2.19 billion out of the AI unit's total $2.56 billion. Advertising generated $367 million. SpaceX has secured $14.1 billion worth of cloud agreements.

Musk stated in August that he anticipates “maybe 10%” of SpaceX's computing capacity will be used for training Grok.

Musk Admits Claude Beats Grok

Anthropic, a client that pays for computing power, produces Claude. Musk remarked this week that his Grok 4.8 is “not as good” as Claude Opus 5.5. “Opus 5.5 is a masterpiece,” he said, as reported by BeInCrypto.

SpaceX President Gwynne Shotwell said in August that the firm was “rapidly expanding our compute capacity to meet our own needs as Grok expands.” Within three months, most of Grok's video team had been let go.

Grok Trails in Apps and Video

In May, Grok placed fifth among seven leading AI assistants in terms of web visits, according to a Momentic Marketing report. During a blind viewer vote in July for video quality, Chinese firms occupied the top six positions, with ByteDance's Seedance 2.0 leading, as noted by Capital and Compute.

Investors Barely Blinked

Following the report, SpaceX shares (SPCX) dropped 0.56% to $139.15 in early Friday trading. The stock rose to around $142 at the open but then fell back below Thursday's closing price of $139.94.