TL;DR
SpaceX is preparing for a potentially record-breaking IPO that could reshape the capital markets.
The company plans to issue approximately 5.56 billion shares at $135 per share, raising around $750 billion, leading to an overall valuation of about $1.75 trillion. If the IPO is successfully completed, it will be one of the largest IPOs in history, propelling SpaceX to one of the highest-valued companies in the U.S. on its first day of trading.
Based on SpaceX's achievements over the past two decades, this market attention is not hard to understand.
The company has significantly reduced commercial launch costs through reusable rockets, established the world's largest satellite internet network, and transformed Starlink from a technical experiment into a tangible revenue and profit source. In the global commercial space sector, there are hardly any truly comparable companies to SpaceX.
However, as the IPO approaches, the market's doubts have intensified.
These doubts do not mean that investors deny SpaceX's technological capabilities or that the market believes Starlink has no value. What truly sparks FUD is the company's desire for the public markets to accept an extremely aggressive pricing logic all at once:
Today's investors are not only asked to pay for rockets and satellite networks but also to prepay for AI infrastructure, orbital data centers, the next-generation Starship, and the longer-term space economy.
The market's concern is not that SpaceX has no future but that the future has already been priced in too much.
$1.75 Trillion Valuation, Cannot Solely Be Explained by Starlink
The most direct controversy of SpaceX's IPO this time comes from its valuation.
By 2025, the company's revenue is projected to be around $18.67 billion, a 33% year-over-year increase, but it is still expected to incur a net loss of approximately $4.94 billion. With a $1.75 trillion valuation, SpaceX's market cap is nearly 94 times the previous year's revenue.
This multiple does not necessarily mean the company is overvalued. SpaceX has highly scarce infrastructure, and its business structure is difficult to compare with traditional aerospace, communication, or tech companies.
The challenge lies in the fact that at a valuation of $1.75 trillion, it is hard to fully justify the market pricing based solely on existing business.
If investors only see SpaceX as a rocket launch and satellite internet company, then the current valuation appears very aggressive; it is only when the market also believes in AI, orbital data centers, next-generation satellite networks, and the longer-term space infrastructure as potential real revenue sources that this pricing logic could hold.
This is also why the grand vision presented in SpaceX's prospectus becomes a point of market controversy.
When a company's valuation relies on yet-to-be-established mature business models to justify it, the market naturally demands a risk discount.
Starlink Makes Money, AI Burns Cash
If we temporarily set aside Mars, orbital data centers, and deep space transportation, SpaceX's current financial structure is actually quite clear.
In the first quarter of 2026, the company generated revenues of around $46.9 billion but operated at a loss of about $19.4 billion. Among the three main business segments, only the connectivity service division centered around Starlink was profitable, with a quarterly operating profit of about $11.9 billion. The AI division had revenues of around $8.18 billion but operated at a loss of approximately $24.7 billion.
Meanwhile, SpaceX's capital expenditures are significantly accelerating. The company's capital expenditure in the first quarter was about $10.1 billion, with 76% of it going into AI-related businesses.
This implies that Starlink remains SpaceX's most stable profit source for now, while the company's most aggressive capital investments are flowing into AI.
This pattern is not without merit. AI infrastructure itself is an industry that requires substantial upfront capital investment, and data centers, power, chips, and network equipment cannot achieve quick returns.
But what the market is truly concerned about is:
Is the profit from Starlink being funneled into a new business that requires ongoing cash burn, with an unclear payback period?
If AI can gradually establish stable revenue and profit, these investments will be seen as forward-looking strategies.
Conversely, if the AI business remains stuck in the heavy asset compute leasing phase in the long term, SpaceX's valuation logic will face pressure. Because what the market ultimately needs to see is not just revenue growth, but whether profits can keep up with the speed of capital investment.
After Acquiring xAI, SpaceX Also Took on the Risk of AI Expansion
SpaceX's AI investment is not merely a matter of increased capital expenditure.
In February 2026, SpaceX acquired xAI in an all-stock transaction. The deal valued SpaceX at around $1 trillion, xAI at around $250 billion, and the combined entity at approximately $1.25 trillion.
From a strategic perspective, this transaction is not difficult to understand. SpaceX has rockets, a satellite network, and potential orbital infrastructure, while xAI has Grok, large data centers, and an AI business. Putting them together can provide a more comprehensive framework for orbital data centers and space compute narratives.
However, from a financial point of view, SpaceX has taken on not only the AI growth opportunity but also the capital pressure behind AI expansion.
The IPO prospectus disclosed that an affiliate of xAI entered into AI infrastructure leasing agreements with entities related to Valor Equity Partners totaling over $200 billion, involving GPUs and data center hardware. Valor's founder, Antonio Gracias, is also a director at SpaceX and a long-time partner of Musk.
Some of these transactions have been classified as "failed sale-leasebacks" due to the failure to meet normal sale-leaseback accounting recognition conditions. This means that the corresponding obligations need to be recorded as debt on SpaceX's balance sheet rather than simply treated as lease expenses.
Reducing upfront cash pressure for data center construction through leasing and financing arrangements is not uncommon. What truly raises market concerns is that the financing party is not entirely an independent third party, and both the buyer and seller in the xAI acquisition are controlled by Musk.
This raises two unavoidable questions:
Is xAI's $250 billion valuation reasonable?
Are the transaction terms of the related financing transparent enough?
The market's concern is not that SpaceX is starting to invest in AI, but that the AI business's debt, financing arrangements, and execution risks are entering the balance sheet of a public company through internal mergers and related-party transactions.
The Texas Business Organizations Code has further amplified this concern. SpaceX is registered in Texas, where the law allows public companies to raise the ownership threshold for shareholder derivative lawsuits and restrict shareholders' access to certain emails, texts, and electronic communications. For SpaceX, which is expected to be valued at around $1.75 trillion, a 3% stake is already worth over $500 billion.
This does not mean that common shareholders are unable to sue the company under any circumstances.
However, it does mean that if investors believe related-party transactions harm the company's interests and wish to challenge directors or executives on behalf of the company, the actual threshold will be very high.
As the boundaries of the company blur more and more, the public market bears not only business risk but also the capital allocation risk of Musk's entire business ecosystem.
Investors Can Buy into Growth but Have Little Influence on Decisions
The reason why governance issues are important is that SpaceX is about to become a public company, but ordinary investors will have very limited influence.
SpaceX has a dual-class share structure. Musk will continue to maintain absolute control through high-voting shares, making it difficult for common shareholders to change the outcome through the voting mechanism even in the face of future capital allocation disputes, related-party transaction disputes, or strategic direction divergences.
This structure is not uncommon. Many tech companies use a dual-class share design to prevent founders from losing control after going public.
However, what sets SpaceX apart is that the company will still need to make many high-risk, long-cycle, and capital-intensive decisions in the future. Investors must accept not only lower voting rights but a more extreme governance premise:
The company can continue to invest heavily in Starship, AI, and orbital infrastructure, even if these projects fail to be profitable in the short term, and ordinary shareholders will find it hard to change the strategic direction.
For investors with a long-term belief in Musk, this structure may not be an issue. SpaceX's past success has been built on the founder's strong personal decision-making ability and risk appetite.
But for investors who prioritize governance transparency, this means something else:
Investors must bear long-term execution risk but find it challenging to truly constrain management.
Starship Is a Technological Project and a Valuation Variable
The market's concern about SpaceX is not only focused on AI and governance structure.
Whether it's the next-generation Starlink satellite, the orbital data center, or Mars transport, all ultimately rely heavily on the same infrastructure: Starship.
The significance of Starship is not just to build a larger rocket. It needs to significantly reduce the unit launch cost, increase the payload capacity, and ultimately achieve high-frequency and reusable commercial launches.
Only when Starship truly enters the operational stage at scale, can SpaceX potentially deploy the next-generation satellite network at a lower cost, put larger-scale equipment into orbit, and create realistic conditions for orbital computing infrastructure.
This is also why every test of Starship is not just space news, but also affects how the market understands SpaceX's long-term valuation.
SpaceX's valuation does not only depend on whether Starship can fly, but on whether it can fly stably, cost-effectively, and frequently like an infrastructure tool.
What is the market's FUD really worried about?
Putting several sets of data together will provide a more complete framework than just "Is SpaceX overvalued": Starlink has proven its commercial value, reusable rockets have established a clear competitive barrier, AI and orbital data centers provide new growth opportunities for the company.
But at the same time, the company's valuation has reached $1.75 trillion, the AI division is still heavily loss-making, capital expenditures are continuing to expand, related financing and internal mergers are blurring business boundaries, and ordinary shareholders have very limited governance constraints they can impose.
These facts can coexist and are not contradictory to each other.
Because the FUD surrounding SpaceX is not a denial of the company's past achievements.
It is:
When Musk puts Starlink, rockets, AI, and future orbital infrastructure into the same valuation model, what premium the public market is willing to pay for those possibilities, and what discounts should be applied for uncertainties?
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