SpaceX has transformed the aerospace industry with its reusable rockets — radically lowering the cost of lifting satellites into space while bringing internet service to all corners of the globe with its Starlink network.
Now, Elon Musk’s privately held company is eyeing what could be the largest initial public offering ever as it faces multiple challenges — including landing Americans on the moon, satisfying the billionaire’s ambitious if quixotic desires to colonize Mars and potentially putting AI data centers into orbit.
The company is seeking to raise more than $30 billion with an IPO perhaps late next year that would value the company at $1.5 trillion, according to reports.
The funding could speed development of its deep-space Starship spacecraft, key to its moon and Mars missions, as it explores the orbiting data center concept — all of which has drawn skepticism, given their need for cutting-edge technological advances.
Here’s what to know about Musk’s plans for the company, which moved to Texas last year but retains large operations at its Hawthorne complex. SpaceX did not return emails seeking comment.
SpaceX has been private since it was founded in 2002. Why is it going public now?
Plain and simple, the company has a voracious appetite for capital. Musk has said on his social media network X that the company’s revenue will top $15 billion this year, but when your goals are to land astronauts on the moon, colonize Mars and assist development of the most sophisticated AI, there is never enough money.
How would the IPO compare to other big public offerings?
It could set a record. The largest public offering to date was conducted by oil industry behemoth Saudi Aramco, which raised $29 billion during a 2019 offering that valued the state-owned company at more than $1.5 trillion.
SpaceX is currently conducting a private offering that would value the company at around $800 billion, Bloomberg reported. It would give employees liquidity by allowing them to sell some $2 billion worth of shares. A public offering next year could almost double that valuation while raising more than $30 billion, the report said. In comparison, the most valuable public company in the world is Nvidia, the maker of AI chips, which has a market cap exceeding $4 trillion.
What is the urgency to raise so much money?
Musk has often talked about colonizing the Red Planet in his lifetime, and at 54, that might be a technological stretch — though the billionaire claims otherwise. Closer to earth, SpaceX is under pressure to get the massive Starship spacecraft — larger than Apollo’s Saturn V — ready for NASA’s Artemis mission to put Americans back on the moon.
In an email sent to staff last week, Bret Johnsen, the company’s finance chief, said the offering “could raise a significant amount of capital” with proceeds funding speedier development of “insane” missions to Mars and the deployment of the AI data centers, according to the Wall Street Journal.
So why put data centers in space?
Musk’s artificial intelligence company xAi and its Grok chatbot are in a race against Google, Open AI and other competitors to build the most sophisticated AI agents, leading to hundreds of billions of dollars of capital investments. But hampering all competitors are the huge power needs of data centers that perform all of the computations.
One so-called hyperscale facility has power needs equivalent to 100,000 households, according to the Pew Research Center. Putting data centers into Earth orbit powered by a large solar cell array would give the chips 24-hour access to the sun’s energy if the satellite is in what is called sun-synchronous orbit.
Musk has confirmed on X that data centers were a key reason for the IPO. He also told an audience at a recent event held by New York investment firm Baron Capital that he could foresee launching data centers each year with aggregate 100 gigawatt power consumption — equivalent to more than 20% of the country’s annual power consumption.
Is that really feasible?
It’s a tall order, experts say. Ehud Behar, an astrophysicist at the Technion – Israel Institute of Technology, said that while putting data centers into a sun synchronous orbit would provide an abundance of solar energy, there are technological hurdles to be overcome, including how to cool the satellites while being exposed to constant sunlight.
“I have not seen a convincing argument or a convincing solution for cooling such data centers,” he said. Other drawbacks include the rapid advances of AI chips which could make an orbiting data center quickly obsolete, as well as the difficulty in fixing a malfunctioning satellite.
“I’m not convinced that that is worthwhile. However, this is something I always advocate — when people try to do hard things, good things happen,” he said.
Are any other companies trying to do this?
Yes. Starcloud, a year-old startup in Redmond, Washington, backed by Andreessen Horowitz and other major venture capital firms, launched a demonstrator satellite with an Nvidia chip last month. And Google last month announced Project Suncatcher, which it said is exploring an “interconnected network of solar-powered satellites” equipped with its own chips.
Long Beach rocket startup Relativity Space, bought this year by former Google chairman Eric Schmidt, also is exploring launching data centers into space.
But doesn’t the Starship program face some hurdles?
Yes. Starship, which has conducted 11 test flights, has been slowed by some unsuccessful launches, though the last two this year came off much better. It is under pressure to speed its development not only to fulfill Musk’s dreams of colonizing Mars in his lifetime, but to meet a $4-billion NASA contract to build a version of the upper stage of Starship that can land on the moon by 2027.
But in order to even transport astronauts to the moon, SpaceX must develop technology that will refuel Starship while in Earth orbit, given how much fuel the gargantuan craft consumes during its launch. Members of NASA’s safety panel said in Septemberthey doubted that timeline could be met.
Acting NASA Administator Sean Duffy in October said he would reopen the Artemis contract to competitors. Whether that actually happens is another story.
President Trump, with whom Musk clashed earlier this year after his short tenure leading the Department of Government Efficiency, recently renominated payments billionaire and private astronaut Jared Isaacmen to be NASA administrator. Isaacmen has flown on two private SpaceX missions and counts Musk as a friend.
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