How Elon Musk can have his cake and eat it too

TL;DR: Now that SpaceX’s record-smashing IPO has been filed, everyone’s getting a look under the hood. And it reveals something very telling. It isn’t really about rockets or AI—it’s a bet on Elon Musk himself. It hands the CEO of a public company an unusual amount of control and asks shareholders to implicitly trust Musk’s judgement (and his uncanny ability to drive his companies’ valuations to the moon).

What happened: SpaceX’s IPO filing this week revealed, among other things, higher-than-expected losses last year—and the company has delayed the first launch of its third-generation Starship rocket multiple times now. It’s all raised questions around whether the company’s targeted $1.75 trillion valuation is justified.

What SpaceX says: The pitch is that this is no longer just a rocket company, but one refocusing on AI—a market that SpaceX says in its prospectus is potentially worth $26.5 trillion. The company has been investing heavily into building out data centers and improving its AI model.

The reality: So far, the AI play hasn’t borne the kind of fruit that might back up such a massive IPO—the prospectus revealed that SpaceX racked up a net loss of $4.9 billion last year. (Though it’s not all dire: Anthropic just committed $15 billion a year for SpaceX’s compute.)

The loss isn’t even the most eyebrow-raising part. The filing also showed that much of the company’s success relies on ambitious promises like space data centers and the future earnings that could result. And it made clear that the star of the soon-to-be-public company is Musk himself—with the CEO-CTO-chairman keeping 85% of the shareholder voting power. In another unusual quirk, the IPO reserves an unusually high amount of shares for retail investors, who tend to bet on a name instead of just business fundamentals. That means that SpaceX’s fate also likely hinges on whether Musk can keep up his track record of driving up the value of his companies (even if his most outlandish bets often haven’t panned out).

Who stands to benefit: A few longtime SpaceX backers and insiders could make billions once the firm goes public—including a crypto investor behind SpaceX's surprise turn as an unexpected Bitcoin whale. But the biggest winner is likely Musk, who gets a huge injection of capital for SpaceX—and considerably boosts his personal wealth—while retaining tight control. (Tesla investors, on the other hand, may be the losers.)

Bottom line: Musk's famous cult of personality isn't just underwriting an unprecedented public listing—it's also a test case for how far that kind of faith can stretch in public markets. —WK