SpaceX IPO Reveals $4.9 Billion Net Loss and Musk's 85% Voting Control

Article by Bao Yilong

Source: Wall Street Journal

SpaceX has officially filed its prospectus with the U.S. Securities and Exchange Commission, which would be the largest IPO in history and could make founder Musk the world’s first individual with a net worth exceeding $1 trillion.

The May 20 prospectus showed that SpaceX's full-year 2025 revenue reached $18.7 billion, a 33% year-over-year increase, but with a net loss of $4.9 billion. First-quarter 2026 revenue was approximately $4.7 billion, with a net loss of $4.3 billion.

The offering size, pricing range, and other details have not been disclosed in the prospectus and will be provided in subsequent filing documents.

The company's IPO proceeds will primarily be used to repay a $20 billion bridge loan and to expand its AI computing infrastructure, upgrade launch platforms, and increase the scale of its satellite constellation.

Wall Street Journal noted that the key highlights of this listing are SpaceX's space launches, Starlink satellite broadband, and the integration of AI business following the acquisition of xAI.

The prospectus shows that the connectivity business has achieved scalable profitability, but the AI segment remains in a phase of heavy investment losses, with capital expenditures far exceeding the combined total of the other two segments.

Meanwhile, Musk will hold approximately 85.1% of the voting rights after the IPO. According to Bloomberg data, Musk’s current net worth is approximately $667 billion; if SpaceX ultimately goes public at a $2 trillion valuation, combined with his Tesla holdings, his personal wealth could surpass the $1 trillion threshold for the first time.

SpaceX has divided its operations into three segments: space, connectivity, and AI, with markedly different financial performances.

The connectivity segment, centered on Starlink's satellite internet service, is currently the company's only profitable business.

In the first quarter of this year, Starlink generated $3.26 billion in revenue, accounting for 69% of the company's total revenue, with an operating profit of $1.19 billion.

As of the prospectus disclosure, Starlink’s global user base has reached 10.3 million, doubling from 5 million a year ago. However, the company noted that average revenue per user is declining due to increased user penetration outside North America and the promotion of lower-priced plans.

The space sector reported an operating loss of $619 million in the first quarter. According to the prospectus, SpaceX has invested over $15 billion in the Starship heavy-lift rocket, with approximately $3 billion invested in 2025 alone. The 12th test flight of Starship is expected to take place this week.

The AI segment incurred an operating loss of $2.5 billion in the first quarter, becoming the largest factor dragging down the company’s overall profitability. In the first quarter of this year, AI-related capital expenditures reached $7.7 billion, accounting for over 75% of the company’s total capital spending of $10.1 billion. Full-year AI capital expenditures for 2025 are expected to be approximately $12.7 billion, nearly doubling year-over-year.

When Musk integrated xAI into SpaceX in February this year, he cited the solar-powered orbital data center as one of the core rationales, stating that the cost of computing power in space would be lower than on Earth within three years.

However, the prospectus reveals that xAI is currently still significantly expanding its ground-based facilities powered by natural gas turbines, including a transaction of approximately $2 billion.

The prospectus explicitly states that SpaceX's ability to expand its data center infrastructure depends on turbine supply, access to natural gas, and regulatory approvals.

However, SpaceX still identifies its orbital AI computing satellites as the next major growth engine in its prospectus, with plans to begin deployment as early as 2028.

The company stated in its prospectus: "Orbital AI computing is an extremely challenging technological problem, and we believe we are the only company with a commercially viable path to building orbital AI computing capabilities at scale."

The prospectus shows that achieving this goal critically depends on Starship completing its designated performance objectives to enable economically viable in-orbit deployment.

SpaceX has applied to the U.S. Federal Communications Commission for permission to launch up to one million satellites equipped with GPUs and powered by solar energy, forming a space-based data center network to support AI projects.

The company estimates the potential market size could reach $2.85 quadrillion, with AI opportunities accounting for approximately $2.65 quadrillion, spanning areas such as space-based data centers, consumer subscriptions, digital advertising, and enterprise applications.

SpaceX completed its merger with xAI, Elon Musk’s AI startup, in February this year, resulting in a combined valuation of $1.25 trillion.

The prospectus, in the section on risk factors, states that Grok is facing investigations and inquiries from multiple regulatory and law enforcement agencies regarding deepfake pornography, which could result in legal liability, negative publicity, or other sanctions.

According to reports, eight law enforcement and regulatory agencies have confirmed that investigations are still ongoing. Musk himself acknowledged that xAI’s technology was “built incorrectly from the start” and needs to be “rebuilt from the ground up.”

In terms of AI commercialization, SpaceX signed a $40 billion compute agreement this month with Anthropic, under which Anthropic will lease all computing capacity from SpaceX’s Colossus 1 data center in Memphis, Tennessee, at a rate of $1.25 billion per month, with the agreement lasting until May 2029.

However, the agreement includes an unusual clause: either party may unilaterally terminate the contract with 90 days’ prior notice—a provision that is highly uncommon for an agreement of this scale, making it difficult for investors to incorporate it as a stable income source in their valuation models.

In addition, SpaceX plans to acquire the code editing tool startup Cursor for $60 billion in stock, with the transaction expected to proceed after the IPO. If the acquisition does not go through, Cursor will receive a $1.5 billion termination fee and an $8.5 billion deferred service fee.

The prospectus disclosed, for the first time with specific figures, the scale of related-party transactions between SpaceX and other companies owned by Musk.

In 2025, SpaceX purchased $131 million worth of Cybertrucks from Tesla at the suggested retail price, along with $506 million worth of Tesla Megapack energy storage products.

From early 2024 to February 2026, xAI has paid a total of approximately $731 million to Tesla.

Collaboration between companies extends beyond procurement. SpaceX and Tesla are jointly advancing a large-scale chip manufacturing project called "Terafab" and an artificial intelligence initiative named "Macrohard."

Tesla is mentioned 87 times in the prospectus, and the document states, "Plans are in place to explore additional strategic partnerships with Tesla in the future."

The prospectus disclosed SpaceX's equity structure and governance framework in full for the first time.

Musk holds 849.5 million Class A shares and 5.57 billion Class B shares (each with 10 votes), giving him a total of 85% of the company’s voting power, ensuring absolute control even after the IPO.

No individual or institution other than Musk holds more than 5% of the shares, with private equity firm Valor Entities holding 7.3% of the common shares, making it the second-largest shareholder.

Elon Musk's latest compensation package at SpaceX consists of two astronomical option bets, with no expiration date, directly tied to Mars and AI infrastructure:

• The Mars colonization plan unlocks when SpaceX's market capitalization reaches $7.5 trillion.
• The orbital data center solution is unlocked when the company's market capitalization reaches $6.6 trillion.

In addition to his $54,000 base salary, Musk will receive nothing unless the above technical and market capitalization milestones are achieved.

The company’s board of directors has been publicly disclosed for the first time, with Elon Musk serving as chairman, and President and COO Gwynne Shotwell, CFO Bret Johnsen, several venture capitalists, and private equity executives also joining the board, including Google executive Donald Harrison.

SpaceX's financial situation is particularly unique among the ultra-large-cap tech companies planning to go public.

In 2025, the company generated revenue of approximately $18.7 billion but incurred a net loss of $49 billion. In comparison, Meta, with a similar valuation, generated over 11 times the revenue of SpaceX last year and achieved a net profit of $60 billion.

If the IPO valuation ultimately exceeds $1.5 trillion, SpaceX’s price-to-sales ratio will reach approximately 80x, while the overall price-to-sales ratio of the top 15 largest companies by market capitalization in the U.S. is only around 7x.

This pricing logic is similar to that of Tesla, another company under Musk’s umbrella, which, despite massive investments in AI, humanoid robots, and Robotaxi, posted extremely slim profits in 2025 yet still trades at a forward P/E ratio of nearly 400.

Analysis suggests that investors betting on SpaceX or Tesla are essentially betting that Musk will convert today’s massive investments into enormous value in the distant future.