Elon Musk’s SpaceX has unveiled the details of one of the most audacious IPOs in history.
Its 200,000-word prospectus, released on Wednesday, lays out a vision of asteroid mining and “passenger transport to the Moon and Mars” resting on a business that is still lossmaking and an unprecedented governance structure that gives the mercurial billionaire near total control.
Musk’s ambition to extend “the light of consciousness to the stars” and harness the sun “to power a truth-seeking artificial intelligence” will be tested next month in the largest flotation of all time.
Here’s what we learned from the SpaceX IPO filing.
AI-driven cash burn
The vast prospectus highlights the extent to which Musk’s 24-year-old rockets-to-chatbot conglomerate has become a bet on AI.
The world’s richest man has identified the technology as by far the largest market for SpaceX to address, with a potential value of $26.5tn, dwarfing the $2tn or so from the group’s Starlink internet service and space operations.
He is investing intensively in an area where SpaceX trails market leaders OpenAI, Anthropic and Google. The company spent close to $13bn on AI hardware last year, recording an operating loss of $6.4bn for that business segment. That dragged it to a net loss despite Starlink generating $4.4bn in operating income.
However, Musk has recently been able to monetise the surplus computing resources he has managed to build. The filing revealed Anthropic will pay $15bn a year to lease space in both of SpaceX’s flagship Colossus data centres.
The deal could be worth $45bn in revenue to SpaceX between now and May 2029, which would more than offset the outlay on hardware. But the decision to lease to a direct competitor highlights the limited uptake of Musk’s own Grok chatbot.
Extraterrestrial data centres
SpaceX wants to leverage this “terrestrial experience” in computing infrastructure to launch a vast constellation of orbital data centres powered by the sun and cooled by the vacuum of space.
Moving the burden of AI computing into orbit is the first step, on the path to the wider opportunities, including the “emergence of new trillion-dollar markets on the Moon, Mars, and beyond”.
In the near term, these ambitions rely on the success of SpaceX’s latest Starship rocket — a reusable spacecraft taller than a 35-storey building. The company’s ability to cheaply launch satellites has helped it corner the launch market, ferrying 80 per cent of all the mass lifted into orbit each year since 2023.
“Over time, especially with orbital data centres, we expect to serve AI at extremely high scale,” Musk wrote on X on Wednesday afternoon.
One investor said that even if xAI’s models flop, the “orbital data centres work with or without Grok”. If Musk’s chatbot does not need the new capacity, he said, the SpaceX chief still had “CoreWeave in the sky”, referring to the fast-growing cloud computing company.
Billion-dollar rewards for Musk loyalists
The blockbuster listing will unlock vast new wealth for SpaceX executives and investors if the company reaches a $1.75tn valuation. Shares held by president Gwynne Shotwell and chief financial officer Bret Johnsen will be worth more than $1bn apiece.
Longtime Musk backer and SpaceX director Antonio Gracias, head of Valor Equity Partners, holds 503mn shares across several funds, which could be worth $70bn or more. Luke Nosek, who co-founded both PayPal and Founders Fund alongside Peter Thiel and joined SpaceX’s board in 2008, holds a stake worth about $5bn.
But all of the holdings pale in comparison to the riches that Musk will unlock. He holds 5.1bn vested shares, or about 41 per cent of the total, which could be worth about $700bn. A successful listing could see him become the world’s first trillionaire.
An unfireable CEO
SpaceX’s board has gone to unusual lengths to cement Musk’s control. It recently granted him two large batches of super-voting class B shares, 1.3bn in total, which carry 10 votes per share.
These shares vest in tranches as SpaceX reaches market capitalisation milestones and either builds powerful orbital AI data centres or establishes a permanent human colony on Mars with at least 1mn inhabitants.
But because the shares were issued to Musk as restricted stock, rather than options or RSUs, the filing shows that he can wield the voting power of these shares immediately, and for as long as he remains employed at SpaceX.
Musk can only be removed as chair or chief executive by a majority vote of the class B shareholders — and personally controls 93.6 per cent of the share class — in effect guaranteeing his position.
Musk has agreed to a “lock-up” period — the amount of time before which pre-IPO shareholders can sell their stakes — of 366 days, twice as long as the 180-day lock-up period typical of most IPOs.
Some other large shareholders will have lock-ups that resemble Musk’s while others will be free to sell out of their positions after the standard 180 days.
Potential hiccups from Musk’s unchallenged control were highlighted by the disclosure that SpaceX bought $131mn of Cybertrucks from Tesla last year at retail price. That could equate to 1,500 of the poorly selling vehicles.
Cosmic risk factors
The concentration of power in Musk’s hands, as well as the chief executive’s potential conflicts of interest, are cited in 37 pages of risk disclosures — alongside the technical complexity of pulling off aims such as lunar power generation.
The extensive risk warnings reflect a company that operates across three distinct sectors having swallowed Musk’s social media site X and AI lab xAI. The S-1 lays out dangers ranging from onerous regulation to “space-related risks” including “radiation from solar and cosmic sources; micrometeoroids and orbital debris” and “human injury or death”.
The company also points to ongoing litigation and regulatory probes into the creation of non-consensual explicit images and “content representing children in sexualized contexts”.
Wednesday’s filing also warns: “We have a history of net losses and may not achieve profitability in the future.”
Goldman beat most of Wall Street to lead position
Goldman Sachs pipped rivals Morgan Stanley, JPMorgan, Citigroup, Bank of America and UBS to lead the IPO, which features a total of 23 Wall Street lenders that will act as underwriters on the deal.
Retail investors will be allocated a chunk of the freshly listed shares via Charles Schwab, Fidelity’s brokerage unit and Robinhood, among others.
Legal advisers on the deal include Gibson Dunn and Davis Polk.
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