When Elon Musk filed to take SpaceX public, it marked a new peak in financial audacity. The company is known for its rockets, but the IPO document reveals a confusing mix of AI, space, and social media ambitions. With a rumored valuation of more than $1 trillion, SpaceX is poised to be the largest public offering ever — but it's built on shaky ground.
The IPO's prospectus describes a total addressable market (TAM) of $28.5 trillion, a figure larger than the entire US GDP. Most of that is attributed to AI applications, even though SpaceX's AI arm lost $6 billion last year. The filing reveals that SpaceX spent $13 billion on AI infrastructure in 2025, yet its AI revenue was only $3.2 billion. To put that in perspective, competitor Anthropic is already turning a quarterly profit.
SpaceX's AI division includes Grok, a chatbot described as "one of the world's most advanced frontier models." However, recent court filings and news reports indicate that Grok has been involved in generating nonconsensual sexualized images, leading to multiple investigations and class-action lawsuits. The company also acquired xAI, which brought with it additional debt and a technical default on a $1.5 billion credit facility.
The space business is not in much better shape. Starship, the giant rocket that underpins many of SpaceX's future plans, has yet to achieve its promised payload capacity. The most recent test flight in May 2026 deployed only 20 dummy satellites, far short of the 60 V3 satellites that Musk envisions. Moreover, the V3 satellites themselves weigh 2,000 kg each, and Starship's advertised capacity of 100 metric tons is insufficient to launch 60 of them. Analysts call this "Musk math."
Starlink remains the company's only profitable unit, generating over $11 billion in revenue last year. It serves both consumers and enterprise customers and has a significant lead over competitors. However, even Starlink's revenue per subscriber has declined by 25 percent due to heavy discounting. SpaceX has chosen to staple its struggling AI and space ventures to Starlink's success, creating a risky cocktail for investors.
One of the most concerning aspects of the IPO is the debt. SpaceX carries nearly $30 billion in debt, including a $20 billion bridge loan that comes due in September 2027. The first $20 billion raised from the IPO must go to repaying this loan. Additionally, the company has a number of related-party transactions that have raised eyebrows. An audit refused to keep $9 billion off the balance sheet for lease deals between SpaceX and a board member's firm.
Governance is another major issue. Elon Musk will control 85 percent of the voting rights after the IPO, leaving public shareholders powerless. Lawsuits are effectively barred by arbitration clauses, and the Securities and Exchange Commission (SEC) under the current administration has shown little interest in investigating potential securities law violations. Leaks of the S-1 filing before its official release — likely from SpaceX itself — may have violated securities laws, but no action has been taken.
To make matters worse, Nasdaq has fast-tracked SpaceX for inclusion in the Nasdaq 100 just 15 days after its listing. This means index funds will be forced to buy billions of dollars worth of SpaceX stock, putting the company into the retirement accounts of ordinary people. If the company fails, those same people will bear the brunt of the losses, while early investors and Musk himself may be shielded.
SpaceX's vision of space data centers, asteroid mining, and point-to-point travel on Earth is pure science fiction at this stage. The filing repeatedly mentions the Sun containing 99.8 percent of the solar system's energy — a phrase used four times — as if repeating a number makes it more plausible. Meanwhile, the company has bought $2.8 billion in polluting gas turbines to power its data centers, contradicting Musk's clean energy image. An environmental lawsuit over the turbines is pending, and if permits are revoked, the AI business will suffer.
Ultimately, the SpaceX IPO represents financial nihilism in its purest form. It is a bet on hype over substance, on sci-fi promises over achievable milestones. As one analyst noted, "The market can stay irrational longer than you can stay solvent." For ordinary investors, there is no getting off the train once it leaves the station. If SpaceX fails, the government bailout will likely follow, given Musk's ties to the Trump administration. Until then, the IPO will make Elon Musk the world's first trillionaire — at everyone else's expense.
Source: The Verge News