Wall Street opened the floodgates today, releasing years of pent-up hype surrounding SpaceX’s long-awaited IPO.
Elon Musk’s unprofitable rocket company, which merged with his even more unprofitable AI startup xAI earlier this year, hit the NASDAQ earlier, spiking a bit from their debut price of $150 before seemingly stabilizing around $170.
It was a broadly successful launch — though not a stratospheric one — and one that officially minted Musk as the world’s first trillionaire, at least on paper. It also pushed SpaceX’s market value north of an eye-popping $2 trillion, making it the sixth most valuable company in the US based on market cap, even eclipsing Musk’s already massively overvalued EV maker Tesla.
To be clear, none of this has much to do with the rocket company’s actual business performance. Back in the land of financial reality, SpaceX lost just shy of $5 billion last year, turning the justification of its multitrillion-dollar valuation into a delirious exercise in taking Musk by his extremely dubious word.
The development is closely tied to the galactic hype currently surrounding the AI industry, with key players similarly raising hundreds of billions of dollars based on largely unproven tech. SpaceX’s Wall Street launch sets the stage for other industry juggernauts’ own IPOs, including Anthropic and OpenAI, both of which confidentially filed the necessary paperwork this month.
In fact, earlier this year SpaceX absorbed Musk’s own AI company, xAI. The rocket company’s new AI arm, which is burning through billions of dollars in cash, drew plenty of skepticism, with Musk promising to launch one million enormous orbital data center satellites into space, turning an already dubious value proposition surrounding the construction of megalomaniac data centers on Earth into an even harder pill to swallow.
Nobody knows if sending AI data centers into space is financially sustainable, let alone even logistically possible. Maintenance of the chips could turn into an extremely costly proposition, especially considering how quickly the tech is progressing, with new AI chips hitting the market every couple of months.
What it all shows it that we’re not even close to peak AI, the hypothetical point at which Wall Street’s hubris could finally catch up with it, causing the long-rumored bubble to burst.
And in a practical sense, Musk’s infatuation with AI could turn SpaceX’s Wall Street debut into an even rockier rollercoaster ride as even die-hard boosters are forced to wonder whether the mercurial CEO’s shaky plans will actually pan out long term.
SpaceX has a lot to prove — and that’s putting it extremely lightly. But retail investors have already signaled they’re willing to go along for the ride.
More on the IPO: The More Data We See About SpaceX’s IPO, the More We’re Wincing
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