Elon Musk is reportedly moving to take his space corporations SpaceX public with an initial public offering (IPO). As plans to build artificial intelligence (AI) data centers in space gain momentum, the move is seen as a bid to raise large-scale capital.
According to the Wall Street Journal (WSJ) on the 21st, Musk has reversed his earlier stance of keeping SpaceX a private company and is rushing the company's IPO. The New York Times (NYT) previously reported that Musk plans to pursue an IPO in the second half of this year and is meeting with multiple banks.
Earlier, Musk had stuck to the position that he would not conduct an IPO "until regular service to Mars is underway." He signaled a conviction to take bold risks to pursue the goal of "colonizing Mars" by leveraging the freedom of a private corporations status free from investor pressure. As a result, the company was recorded as the most valuable private corporations in the world with a corporate value of $800 billion (about 1,180 trillion won).
Musk's view has been widely shared in and around SpaceX. Gwynne Shotwell, the chief operating officer (COO) often called "SpaceX's No. 2," said in a media interview that "our investors are selected very carefully (picky) in that they must be able to share a common vision," and added, "We are focusing on the fundamental goal of technology development instead of an IPO." It has also been reported that internal employees received an email conveying the same message.
However, with big tech companies' demand to build data centers surging and the idea of constructing data centers in space gathering speed, Musk is seen to have abruptly shifted strategy.
In fact, the industry has recently been actively discussing launching AI satellites powered by solar energy into orbit to use them as data centers. Building facilities on the ground faces various constraints such as permits, construction, community approval and electricity rates, while in space these obstacles can be greatly reduced. That is why Google and Blue Origin moved into this business earlier.
In response, Musk appears to have embarked on fundraising with a strong goal for SpaceX to lead this field. Building compute facilities as satellites that orbit Earth quickly is highly technically challenging, and producing, launching and operating thousands of satellites is estimated to require as much as tens of billions of dollars.
A SpaceX listing is also closely tied to Musk's AI corporations xAI. Because xAI's chatbot trails competitors OpenAI and Google in revenue and user scale, the calculation is that capital and space infrastructure secured through this IPO could be used to strengthen xAI's competitiveness. SpaceX previously invested $2 billion in xAI in July last year, and xAI's chatbot Grok has been used for customer support on SpaceX's Starlink satellite internet service.
Analysts say the competitive dynamic between Musk and OpenAI CEO Sam Altman also influenced the decision. Altman previously considered acquiring or partnering with a rocket company to deploy AI compute satellites last year. With OpenAI and Anthropic weighing IPOs this year, Musk is seen as wanting SpaceX to enter the public market first and secure capital.
However, assessments are that the success or failure of the space data center business hinges on SpaceX's super-heavy rocket Starship. Satellites for data centers are designed on the premise of being carried by Starship, but although Starship has conducted test flights for about three years, it has yet to carry an operational payload. SpaceX plans to conduct the 12th Starship test launch in the first quarter of this year.
Meanwhile, the market expects SpaceX to select IPO underwriters soon. Musk has reportedly expressed a desire to complete the listing by July.