On June 5, the Financial Times published an article noting that the most unusual aspect of SpaceX's IPO is the difficulty in predicting what the company will become in 10, 5, or even 2 years—a state of ambiguity that may well be deliberate on Musk's part. SpaceX confirmed on Wednesday it is seeking a $1.78 trillion valuation, which would make it the world's seventh-largest listed company if achieved. Yet the path to justifying that price tag is far from clear.
AI merger drives a narrative pivot
In February this year, Musk merged SpaceX with xAI, abruptly turning AI into the company's top business priority. Previously, SpaceX's long-term goal had been to make humanity a multi-planetary species; now AI dominates its plans. In the first quarter, xAI accounted for over three-quarters of capital expenditure, and 93% of the serviceable market in the prospectus is linked to AI. Musk has a proven ability to reorganise the narratives around his ventures according to market appetite: earlier, SolarCity was folded into Tesla and rebranded as an alternative energy group, and Twitter was later combined with xAI as well.
SpaceX's current narrative supports the xAI deal by marrying rockets with AI, claiming it can leapfrog competitors by deploying AI data centers in space. This vision ties rocket launch capacity directly to AI computing power.
Real cash flow remains the valuation test
The numbers, however, reveal a vast gap. SpaceX placed about 2,200 metric tons of payload into orbit last year, while Musk himself admits that entering the orbital data center business would require launching 1 million tons annually—a roughly 450-fold difference. SpaceX's rockets and Starlink satellite network are genuine achievements, but the FT argues that Musk's real strength lies in narrative creation. The article stresses that no matter how grand the story, real incoming cash flow will ultimately be the yardstick for the valuation.