SpaceX IPO targets $1.75 trillion valuation amid scrutiny over ecosystem synergy
The US Securities and Exchange Commission has issued comment letters regarding the filing, while market speculation intensifies around a potential merger with Tesla.
SpaceX is preparing to list on the Nasdaq under the ticker SPCX, targeting a valuation of $1.75 trillion for its initial public offering around June 12. The filing has drawn intense regulatory attention, with the US Securities and Exchange Commission issuing comment letters seeking further clarification and details. In response, the company amended its S-1 to warn investors that water scarcity poses a significant risk to the expansion of its data centre infrastructure.
MIT Sloan professor Sinan Aral has characterised the deal as a “Jekyll and Hyde” scenario, questioning whether the rising valuations of associated entities like xAI and X reflect genuine operational synergy or inflated assets. Aral noted a “paper trail of climbing numbers,” pointing out that when Musk folded X into xAI, the AI firm was valued near $80 billion and X around $33 billion, despite earlier internal valuations implying a $250 billion tag for xAI.
While the rocket manufacturer faces questions regarding its AI assets, it has secured substantial revenue commitments. Anthropic has agreed to pay roughly $1.25 billion a month for SpaceX’s Colossus compute capacity, a deal that could deliver up to $45 billion through May 2029. Aral, however, remains sceptical of xAI’s model tier, describing it as a third- or fourth-tier product and noting that its Grok model has lost users to competitors like Claude and ChatGPT despite the scaling of compute resources.
Market speculation is also driving interest in a potential consolidation of Elon Musk’s vertical ecosystem, with a future merger between SpaceX and Tesla being a key topic. Dan Ives of Wedbush expects the two companies to merge eventually, arguing that Tesla’s vehicle data is essential for training self-driving models. Kalshi estimates a 60% probability of such a merger occurring before May 1, 2027, while Polymarket assigns a roughly 78% chance to the SpaceX IPO closing with a market capitalisation above $2 trillion.
The IPO filing also contains a pay package for Musk that could push his net worth toward $2 trillion if he delivers a Mars colony, positioning him as a potential candidate for the world’s first trillionaire before the end of the year. Despite the bullish market sentiment and significant contractual revenue, Aral declined to endorse the IPO, cautioning that investors have bet against Musk before and lost.
