Elon Musk – Artifex.News

SpaceX IPO is really Elon Musk’s gamble to save his empire

admin — Sun, 07 Jun 2026 02:26:00 +0000

The SpaceX initial public offering (IPO), set for June 12, on Nasdaq (SPCX) is expected to be the largest single listing in history. The company is targeting a $75 billion raise at a valuation of $1.75-2 trillion.

SpaceX is seeking a large liquidity influx to fund its Orbital Data Centre (ODC) initiative and terrestrial expansion of its artificial intelligence (AI) unit. The prospectus also reveals a mandatory “deleveraging” requirement whereby SpaceX must use its IPO proceeds to repay a $20 billion bridge loan within six months.

Early headwinds

Investors are already scrutinising the “Frankenco” structure of the company, where profits from the space-based Internet service Starlink are being used to offset xAI’s heavy losses, nearly $6.4 billion in 2025 alone.

Starlink is facing headwinds of its own. In May, in a bid to protect competitors like Eutelsat and OneWeb, the European Commission proposed new regulations to limit third-country, including U.S., satellite operators to only one-third of Europe’s bandwidth. This significantly shrinks Starlink’s market in a high-wealth region. Second, as more direct-to-cell services launch, the amount of noise in protected radio bands increases. Regulators are thus becoming more conservative with spectrum grants, thus imposing a ceiling on Starlink’s data throughput.

While pre-IPO deals with Google and Anthropic provide revenue bridge capacity, investor scepticism has stayed high. Analysts at Morningstar have already warned of a valuation bubble, pegging the company’s fair value at just $780 billion, which is less than half of SpaceX’s target.

Sceptics are also motivated by independent experts calling into question the viability of Musk’s ODC plans.

Financial complexity

In March, SpaceX secured a $20 billion bridge loan led by Goldman Sachs. A bridge loan is a short-term loan, usually for 6-18 months, for immediate liquidity until a larger and more permanent funding event, like an IPO, happens. This loan was used to retire $17.5 billion of high-interest junk debt sitting on the balance sheets of X and xAI. SpaceX’s S-1 filing clearly states that the company is required to use a portion of its IPO proceeds to repay this loan within six months.

Normally, an IPO generates capital for growth; in this case, that would be money to build more rockets. However, here, a significant portion of the $75 billion raised will be non-productive capital as it won’t go into R&D but to pay off a loan.

Likewise, in February 2026, SpaceX officially merged with xAI, folding the social network X (a subsidiary of xAI) and the Grok AI model into the SpaceX corporate structure. Morningstar analysts had flagged this as a “related-party transaction” (RPTs). That is, because Musk controlled all the involved entities, the price of the merger — $250 billion for xAI — was determined not by the open market but by internal deliberations. Investors generally dislike RPTs for this reason.

Morningstar’s scepticism was further bolstered by the fact that xAI was burning cash, and by merging it into SpaceX, its losses were being hidden inside the considerable revenue from Starlink. As a result, investors could have a harder time calculating the real burn rate of SpaceX’s core rocket business.

SpaceX’s AI push

The new valuation of $1.75-2 trillion also rests on the assumption that SpaceX will own the ‘rails’ of the AI economy. As part of this, SpaceX has proposed a new semiconductors fabricating facility dubbed Terafab in Grimes County, Texas, at a cost of $55-119 billion. The goal is to manufacture 1 terawatt of internal computing capacity per year. This will be in the form of custom GPUs for xAI models and SpaceX satellites.

In an IPO, however, this asks investors to buy shares based on what money SpaceX is making now from its existing businesses as well as the performance of a chip-making factory it has yet to build. Critics have already argued that SpaceX is trying to solve a supply-chain bottleneck by becoming its own supplier for the world’s most complex product — custom GPUs — which could lead to long delays.

The proposed ODC is tied to this. According to the filing with the U.S. Federal Communications Commission, the constellation will have 1 million satellites with computing accelerators. The pitch seems to be that AI models running in orbit will be able to harvest 24/7 solar energy and bypass terrestrial land-use regulations. But it is no coincidence that to justify a $2 trillion valuation, SpaceX needs a total addressable market (TAM) larger than just launch services — and this is the ODC, an attempt to claim the AI cloud computing TAM.

However, thanks to risks like orbital debris, the insurance premiums and regulatory fines on the ODC alone could make all of SpaceX uninvestable.

Finally, to bolster the IPO, SpaceX signed a $30 billion agreement with Google through 2029 as part of which Google will pay around $920 million every month before the IPO to access SpaceX’s AI chip clusters, as bridge capacity for Google’s Gemini AI models. While this is SpaceX’s attempt to show that its AI-in-orbit business can be profitable, the catch is that Google is renting SpaceX’s terrestrial resources.

Concerns about the ODC

Independent experts have already raised serious questions about how a server in earth orbit will shed heat fast enough to keep operating — a considerable engineering challenge on the ground even with convection (the natural movement of air from warmer to cooler areas) to help. There is no air in space, however, so there is no convective cooling.

Another option is radiation, but here the Stefan-Boltzmann law stands in the way. Effectively, to shed 1 MW of waste heat — corresponding to a small terrestrial datacenter — at 20° C, a satellite will need around 1,200 sq. m of radiator area, larger than the wingspan of a Boeing 747. Engineering sceptics have already estimated that the mass of the radiators required to cool a gigawatt-scale computational facility in orbit would make the satellites too heavy to be cost-effective, even with Starship’s reduced launch costs.

Second, high-performance AI chips, like the NVIDIA H100s or SpaceX’s custom silicon, are very sensitive to single-event upsets (SEUs) from cosmic rays. In an SEU, a single charged particle striking a sensitive part of a microelectronic device can change its state. So these chips will have to be ‘hardened’ to radiation, which will reduce their performance by orders of magnitude. An alternative plan to launch consumer-grade chips and replace them every 2-3 years would heighten the space debris risk and inflate costs beyond profitability.

Gambler’s scheme

By using SpaceX IPO proceeds to pay off the bridge loan, Musk is effectively shifting debt from a private, struggling entity to a public and successful one. Second, if the $1.75 trillion valuation is the “bubble” Morningstar suggests it is, new investors will essentially provide the exit liquidity for the banks. Third, even if SpaceX captures 100% of the global launch market, that is only a roughly $20 billion/year industry. And if the ODC is physically impossible or economically unviable due to the cooling constraints, the $2 trillion valuation will effectively be based on a phantom product. Finally, by announcing a capital-intensive project in the form of Terafab, SpaceX is trying to force the market to keep funding it.

Taken together, it has many signs of a Ponzi scheme — but it isn’t one. Instead, it is a gamble. Musk is betting that he can build Terafab and the ODC fast enough for the revenue they generate to dwarf the $20 billion debt he dumped into the company. But this is also why the S&P 500, perhaps the gold standard for stability and retirement funds, has refused to waive its strict inclusion rules for SpaceX, essentially calling Musk’s bluff on the company’s financial health.

Ultimately, if the ODC also fails, SpaceX will be left a successful rocket company with an unsustainable debt load and a stock price that could drop 70-80% once the AI hype has been stripped off.

mukunth.v@thehindu.co.in

Source link

SpaceX launches its biggest, most beefed-up Starship yet on test flight

admin — Sat, 23 May 2026 00:16:00 +0000

SpaceX’s Starship 39 rocket launches from Starbase during the 12th test flight as seen from South Padre Island, Texas, on May 22, 2026.
| Photo Credit: AFP

SpaceX launched its biggest, most powerful Starship yet on a test flight Friday (May 22, 2026), an upgraded version that NASA is counting on to land astronauts on the moon.

The redesigned mega rocket made its debut two days after SpaceX CEO Elon Musk announced he’s taking the company public. It blasted off from the southern tip of Texas, carrying 20 mock Starlink satellites for release halfway around the world.

It’s the 12th test flight of the rocket that Musk is building to get people to Mars one day. But first comes the moon and NASA’s Artemis program.

The last of the old space-skimming Starships lifted off in October. SpaceX’s third-generation Starship — a souped-up version dubbed V3 — soared from a brand-new launch pad at Starbase, near the Mexican border. Last-minute pad issues thwarted Thursday (May 22, 2026) evening’s launch attempt.

SpaceX was hoping to avoid the fireworks it experienced during back-to-back launches last year when midair explosions rained wreckage down on the Atlantic. Earlier flights also ended in flames.

At 124 metres, the latest model eclipses the older Starship lines by several feet and packs more engine thrust.

The revamped booster sports fewer but bigger and stronger grid fins for steering it back to Earth following liftoff, and a larger and more robust fuel transfer line to feed the 33 main engines. This fuel line is the size of SpaceX’s Falcon 9 first-stage booster. The retro-looking, stainless steel spacecraft also has more of everything — more cameras and more navigation and computer power — as well as docking cones for future rendezvous and moon missions.

Starship is meant to be fully reusable, with giant mechanical arms at the launch pads to catch the returning rocket stages. But on this latest trial run, nothing was being recovered. The Gulf of Mexico marked the end of the road for the redesigned first-stage booster, and the Indian Ocean for the spacecraft and its satellite demos.

NASA is paying SpaceX billions of dollars — and also Jeff Bezos’ Blue Origin — to provide the lunar landers that will be used to land Artemis astronauts on the moon.

The two companies are scrambling to be first.

While Starship has reached the fringes of space on multiple flights lasting an hour at most, Bezos’ Blue Moon has yet to lift off, although a prototype is being readied for a moonshot later this year.

NASA is following April’s successful lunar flyaround by four astronauts with a docking trial run in orbit around Earth planned for next year. For that Artemis III mission, astronauts will practice docking their Orion capsule with Starship, Blue Moon or both.

A moon landing by two astronauts — Artemis IV — could follow as soon as 2028 using either Starship or Blue Moon, whichever lander is safer and ready first. It will be NASA’s first lunar landing with a crew since 1972’s Apollo 17. The goal this time is a moon base near the lunar south pole, staffed by astronauts as well as robots.

SpaceX is already taking reservations for private flights to the moon and Mars on Starship.

The world’s first space tourist, California businessman Dennis Tito, and his wife signed up three and a half years ago for a flight around the moon. The timing is uncertain.

This week, another wealthy space tourist — Chinese-born bitcoin investor Chun Wang — announced he will fly to Mars on Starship’s first interplanetary mission. Wang previously chartered a SpaceX polar flight in a Dragon capsule last year and, along with his hand-picked crew, became the first to orbit above the north and south poles.

No price tag or date was revealed for his Mars cruise.

Published – May 23, 2026 05:46 am IST

Source link

Decoding the Musk vs. Altman verdict

admin — Wed, 20 May 2026 02:38:00 +0000

In 2015, a small group of researchers and technology entrepreneurs gathered in San Francisco to create what they described as a gift to humanity, eventually to turn into enemies defining the future of artificial intelligence (AI) in a courtroom.

Elon Musk loses blockbuster OpenAI suit as jury says too late

OpenAI was founded on the premise that if artificial general intelligence (AGI) was coming regardless, it was better to have safety and ethics-conscious researchers build it. AGI is the kind of AI that can match or surpass human cognition. The group decided to create the initiative as a nonprofit and if the technology ever arrived, it would belong to everyone, as open source. OpenAI’s CEO Sam Altman even went as far as to design the company’s board such that it could fire him too if he ever came in the way of its core mission. That founding promise, to build ethical AGI, years later brought Elon Musk and Mr. Altman to a federal courthouse in California.

Eleven years since the founding, no longer friends and both pursuing their own paths to AGI, Mr. Musk and Mr. Altman are both convinced that the other has betrayed everything they had vowed to build together.

Mr. Musk brought forward the lawsuit against Mr. Altman, accusing him, OpenAI president Greg Brockman, and Microsoft, of manipulating him into donating to a public-interest organisation only for it to later attach a for-profit subsidiary and accept billions from Microsoft.

On May 18, a nine-person jury took less than two hours to throw out Mr. Musk’s case against Mr. Altman. The verdict did not settle the question of whether OpenAI broke faith with its founding mission but instead, it was settled on a procedural issue – that Mr. Musk had waited too long to sue. In the American legal system, civil claims must be filed within a fixed window of time, crossing which the claim becomes invalid. The jury said Mr. Musk’s claim fell outside the statute of limitations. The judge concurred, but Mr. Musk’s lawyers have signalled that they might appeal. The merits of the case were never discussed.

The nonprofit debate

Trial testimony and evidence showed OpenAI’s leadership had anxiously tracked Google’s acquisition of another AI research giant DeepMind in 2014.

OpenAI’s executives argued that the nonprofit structure was not sufficient to compete with bigshots like Google.

Mr. Musk was the company’s biggest early donor, contributing around $38 million. But, the economics of building AGI turned out to be brutal. Training large models requires computing infrastructure that costs billions of dollars. By 2019, a year after Mr. Musk’s departure from the OpenAI board, the company decided it could not remain competitive as a pure nonprofit. It attached a for-profit subsidiary to the existing organisation, with the nonprofit retaining oversight and a capped return structure for investors.

Microsoft came in with an initial investment that year, and kept coming, eventually investing more than $135 billion and holding a significant share in OpenAI. This is the transformation Mr. Musk’s lawsuit sought to attack, from nonprofit to a commercially driven AI laboratory he had set out to oppose.

Claims that did not make it to trial

The bit that went to trial eventually was a much smaller subsect of the original claims Mr. Musk had filed in 2024. Several of his claims were dropped or narrowed before the trial even began.

Mr. Musk claimed that Microsoft’s investment in OpenAI had aided it to breach its charitable mission. But, despite a Microsoft executive testifying that the company had invested billions in OpenAI, the jury dismissed the claim.

Mr. Musk also filed an antitrust claim against OpenAI and Microsoft, alleging that the two companies were colluding to dominate the AI market. This claim has not reached the jury yet. Judge Gonzalez Rogers heard arguments and signalled she was sceptical, noting the aggressive competition already playing out across the AI industry. She has not ruled on it, meaning that particular thread remains unresolved. OpenAI on its part filed a countersuit accusing Mr. Musk of running a years-long harassment campaign against the company. A judge ruled in August 2025 that those claims were legally sufficient to go forward. That case is separate and still ongoing.

Key takeaways from the proceedings

The legal question the jury resolved was procedural. But the three weeks of testimony preceding the verdict were pure Silicon Valley tech theatre.

Mr. Musk’s lawyers assembled a long roster of witnesses who testified that Mr. Altman is not trustworthy. Mira Murati, who served as OpenAI’s chief technology officer, told the court that Mr. Altman had lied about a safety review in the past. Ilya Sutskever, one of the company’s founding researchers, had spent more than a year building a case for Mr. Altman’s removal from the company, assembling a 52-page memo that described a pattern of dishonesty and internal manipulation – a case widely covered in media.

In November 2023, OpenAI’s board briefly fired Mr. Altman and reversed course within days, primarily under pressure from Microsoft. Mr. Altman returned and Mr. Sutskever eventually left the company.

OpenAI’s lawyers demonstrated that while still on the board in 2017, Mr. Musk himself had pushed to restructure OpenAI as a for-profit entity, including an attempt to fold it into Tesla under his control.

Mr. Musk’s argument that he had always opposed commercialisation now sat awkwardly alongside evidence that he had sought to commercialise the company himself, especially on the condition that he be in charge. Musk’s own xAI, founded in 2023 and now part of SpaceX, is a for-profit company.

The larger question

The immediate winner from the latest verdict is OpenAI. The lawsuit had cast a shadow over the company’s plans for its upcoming IPO that could value it at close to a trillion dollars. Mr. Musk has said he will appeal.

There is a larger question the verdict leaves entirely unanswered. The trial showed how OpenAI’s founding principles were abandoned in pursuit of competition. The nonprofit structure still exists, and the OpenAI nonprofit now controls assets of more than $200 billion. But what that oversight means in practice was not explored in court.

Published – May 20, 2026 07:30 am IST

Source link

Elon Musk, Apple’s Tim Cook to head to China with Trump, per White House

admin — Tue, 12 May 2026 06:34:00 +0000

Washington and Beijing have been at loggerheads over key issues ranging from trade tariffs to the Iran war to Taiwan [File]
| Photo Credit: AP

Top U.S. executives, including Tesla’s Elon Musk and Apple’s Tim Cook, will accompany U.S. President Donald Trump on his visit to China this week, a White House official said Monday.

Beijing has said it is ready to work with the United States in pursuit of “more stability” and confirmed that Trump will visit, the first US president to do so since 2017. His trip runs from Wednesday to Friday.

Washington and Beijing have been at loggerheads over key issues ranging from trade tariffs to the Iran war to Taiwan, which China claims as part of its territory.

While in Beijing, Trump will hold talks with Chinese President Xi Jinping, with the countries’ myriad trade and economic issues on the table.

Trump and Xi agreed in October to a one-year truce in a blistering trade war that saw tariffs on many goods exceed 100 percent.

The U.S. president has been pressuring companies to build manufacturing facilities in the United States, a bid to both reduce imports and increase domestic economic activity.

Many top tech companies’ supply chains, however, heavily involve China, making them particularly exposed to bilateral trade tensions.

The United States has also sought to block China from accessing the highest-end artificial intelligence chips from US companies.

According to a list shared by a White House official, speaking on condition of anonymity, Musk and Cook will be accompanied by 15 other chief executive officers.

They include the chiefs of Boeing, GE Aerospace, Citi, Goldman Sachs, Mastercard and Visa.

Among tech companies, top executives from Cisco, Meta, Micron and Qualcomm will be on the trip, the official said.

Musk, the richest person in the world, heavily backed Trump on the campaign trail for his second term as US president, contributing more than $280 million.

The two had a public falling out in July last year, but appear to have since reconciled, with Musk reappearing in White House circles.

Published – May 12, 2026 12:04 pm IST

Source link

SpaceX IPO filing shows Elon Musk can retain board control

admin — Thu, 23 Apr 2026 11:11:00 +0000

SpaceX founder Elon Musk. File
| Photo Credit: Reuters

SpaceX is telling prospective investors its board will not need a majority of directors who are independent ⁠of the company, according to an excerpt of its IPO filing reviewed by Reuters, underscoring how founder Elon Musk is retaining control of the rocket and artificial intelligence maker.

In a departure from the ‌vast majority of public companies, SpaceX said it would maintain “controlled company status” after its $1.75 trillion IPO, expected this summer. That means it will not need ‌a majority of its board to be independent, nor will it need independent compensation and ‌nominating ⁠committees, the filing excerpt showed. It only must have an audit committee ⁠composed entirely of independent directors, the document stated.

Published – April 23, 2026 04:41 pm IST

Source link

SpaceX’s xAI to compete in Pentagon contest for autonomous drone technology

admin — Tue, 17 Feb 2026 06:43:00 +0000

SpaceX, xAI and the Pentagon’s defense innovation unit did not immediately respond to requests ‌for comment.
| Photo Credit: REUTERS

Elon Musk’s SpaceX and its wholly-owned subsidiary xAI are competing in a secret new Pentagon contest ‌to produce voice-controlled, autonomous drone swarming technology, Bloomberg News reported on Monday, citing people ⁠familiar with the matter.

SpaceX, xAI and the Pentagon’s defense innovation unit did not immediately respond to requests ‌for comment. Reuters could not independently verify the report.

Texas-based SpaceX recently acquired xAI ‌in a deal that combined Musk’s major ‌space ⁠and defence contractor with the billionaire entrepreneur’s ⁠artificial intelligence startup. It occurred ahead of SpaceX’s planned initial public offering this year.

Musk’s companies are reportedly among a select few chosen to participate ‌in the $100 million prize challenge initiated in January, according to the Bloomberg report.

The six-month competition aims to produce advanced swarming technology that ‌can translate voice commands into digital instructions and run multiple drones, the report said.

Also Read | How drones are the new face of warfare

Musk was among a group of ⁠AI and robotics researchers who wrote an open letter in 2015 that advocated a global ban ‌on “offensive autonomous weapons,” arguing against making “new tools for killing people.”

The U.S. Defense Secretary last year outlined a new strategy to accelerate drone development and deployment by aiming to cut bureaucracy and boost domestic drone manufacturing.

The U.S. also has ‌been seeking safe and cost-effective ways to neutralize drones, particularly around airports and large sporting events – a concern that has become more urgent ⁠ahead of the FIFA World Cup and America250 anniversary ⁠celebrations this summer.

OpenAI, Alphabet’s Google, Anthropic and xAI last year won contracts that are ‌worth up to $200 million each and aimed at scaling up adoption of advanced AI capabilities in the Pentagon.

Published – February 17, 2026 11:49 am IST

Source link

Elon Musk says that SpaceX has shifted focus from Mars to Moon

admin — Mon, 09 Feb 2026 07:40:00 +0000

A file image of Elon Musk with a logo of SpaceX.
| Photo Credit: Reuters

SpaceX is putting its longstanding focus of sending humans to Mars on the back burner to prioritise establishing a settlement on the Moon, founder Elon Musk said Sunday (February 8, 2026).

The South Africa-born billionaire’s space company has found massive success as a NASA contractor, but critics have for years panned Mr. Musk’s Mars colonisation plans as overambitious.

The move also puts Mr. Musk in alignment with U.S. President Donald Trump’s shift away from sending Americans to Mars.

“For those unaware, SpaceX has already shifted focus to building a self-growing city on the Moon, as we can potentially achieve that in less than 10 years, whereas Mars would take 20+ years,” Mr. Musk said in a post on X, the social media platform he bought in 2022.

Difficulties in reaching Mars include the fact that “it is only possible to travel to Mars when the planets align every 26 months.”

“We can launch to the Moon every 10 days,” he added.

Mr. Musk has blown through several previous estimates on when he could feasibly put man on the Red Planet.

In 2016, Mr. Musk said passengers could take off for Mars as soon as 2024, if financing and other planning factors for his rockets came through.

That prediction came after he told the Wall Street Journal in 2011 that SpaceX astronauts would reach Mars in “Best case, 10 years, worst case, 15 to 20 years.”

In an executive order on U.S. space policy late last year, Mr. Trump said he wanted to get Americans to the Moon by 2028, under NASA’s Artemis program, for which SpaceX is a contractor.

That marked a shift from Mr. Trump’s earlier declaration that he wanted to plant the American flag on Mars before the end of his four-year term.

Americans are currently scheduled to return to the Moon’s surface in mid-2027 on the Artemis 3 mission, but the timeline has been repeatedly pushed back.

Industry experts say it will probably be delayed again because the lunar lander in development at SpaceX is not ready.

Easier access to the Moon “means we can iterate much faster to complete a Moon city than a Mars city,” Mr. Musk said Sunday (February 8, 2026).

But he added that SpaceX would not give up on its Mars plans, saying it would “also strive to build a Mars city and begin doing so in about 5 to 7 years.”

Published – February 09, 2026 08:33 am IST

Source link

SpaceX shifts focus from Mars to Moon, Musk says

admin — Mon, 09 Feb 2026 03:03:00 +0000