In SpaceX’s IPO, Elon Musk is a risk factor

At a glance:

• SpaceX’s IPO filing reveals deep financial entanglements between Musk’s companies, including Tesla’s nearly 19 million shares and $697M in Megapack purchases.
• The rocket maker spent $131M on Cybertrucks, helping prop up Tesla’s registration numbers amid weak demand.
• Musk’s leadership is deemed critical yet risky; the S-1 warns he could compete with SpaceX or divert resources to ventures like xAI.

The intertwined empire: How Musk’s companies fuel each other

The long-awaited SpaceX IPO is more than a historic offering that could mint the world’s first trillionaire. It is a rare, unvarnished look into the complex financial web connecting Elon Musk’s sprawling empire. The 330-page Form S-1 filing reads at times like a corporate family tree, detailing how money, products, and strategic dependencies flow between SpaceX, Tesla, xAI, X (formerly Twitter), The Boring Company, and Neuralink. A simple keyword search tells the story: “Tesla” appears 87 times, “xAI” 356 times, and “X” 267 times. Even the more peripheral Boring Company (7 mentions) and Neuralink (3) get nods. This isn’t just cross-promotion; it’s a system of mutual reliance where each entity is both a customer and, increasingly, a shareholder in the others.

Specific deals: From Cybertrucks to Megapacks

Quantifiable examples of this symbiosis abound. Tesla owns nearly 19 million shares of SpaceX Class A common stock—a stake worth hundreds of millions, though less than 1% of outstanding shares. Meanwhile, SpaceX has been a significant buyer of Tesla’s troubled Cybertruck. The filing states SpaceX purchased $131 million worth of the vehicles at manufacturer’s suggested retail price. While a Bloomberg report cited 1,279 Cybertrucks bought in Q4 2025 alone, the IPO filing suggests cumulative acquisitions are higher. As Electrek noted, these purchases were likely crucial in preventing a year-over-year decline in Cybertruck registrations. On the energy front, SpaceX’s massive Colossus I and II data centers in Memphis, TN, rely on Tesla Megapacks for grid stabilization. The rocket company purchased $697 million worth of these giant stationary batteries in 2024 and 2025 alone.

The xAI merger: A valuation leap and a capital drain

SpaceX’s financial landscape was upended by the February merger with xAI, Musk’s AI startup that also owns X. The combined entity was valued at $1.25 trillion earlier this year. For investors, this means buying in at a historically high price. However, the merger came at great cost to both SpaceX and Musk personally. The filing reveals that in 2025, SpaceX directed about 60% of its capital spending—roughly $20 billion—toward xAI. This massive internal transfer underscores how SpaceX functions as a financial engine for Musk’s AI ambitions. Yet, this strategy carries risks. As TechCrunch reported, xAI lost billions last year on revenue that grew by only 22% year over year, raising questions about the sustainability of such heavy investment from its sister company.

The central risk factor: Musk himself

When companies go public, they list risk factors to warn investors. SpaceX’s S-1 is unique: its biggest risk is also its biggest asset—Elon Musk. The filing explicitly states SpaceX is “highly dependent on the continued services of Mr. Musk,” citing his leadership, vision, and technical expertise as critical. Yet, it simultaneously acknowledges he isn’t fully focused on SpaceX, serving also as Tesla’s Technoking and CEO, and being involved with Neuralink and The Boring Company. More pointedly, the document states Musk is not “restricted” from engaging in activities that compete with SpaceX, and that conflicts of interest may arise concerning business transactions or opportunities. The language is stark: “Mr. Musk and other businesses owned by or affiliated with him may now, or in the future, directly or indirectly, compete with us for investment or business opportunities.”

Concrete conflicts: Tunneling, talent, and component shortages

The filing enumerates specific areas where these conflicts could materialize. The Boring Company, for instance, has paid SpaceX about $1.2 million in office leases and spent roughly $1 million for Boring to dig a tunnel at SpaceX’s Bastrop, Texas, headquarters—small sums that symbolize deeper integration. More concerning are the battles for scarce resources. The S-1 notes Musk’s companies compete for RAM, AI chips, and other ultra-valuable components in short supply. This internal rivalry can drive up costs and create supply chain friction. Furthermore, Tesla shareholders sued Musk in 2024, alleging he diverted talent and resources to xAI. That lawsuit is pending, and its outcome could set precedents for how Musk manages—or is forced to manage—his competing priorities.

The paradox: Irreplaceable yet potentially damaging

The core paradox laid bare by the filing is that SpaceX is utterly dependent on Musk’s genius and drive, yet those same qualities could lead to its downfall. His media omnipresence means his statements and actions—even those unrelated to SpaceX—can sway public opinion, regulatory relationships, and stock price. The S-1 warns: “The actions and statements of Mr. Musk and his affiliated ventures, whether or not directly relating to us, may draw significant public attention and scrutiny to us.” This is not standard IPO boilerplate. It is a frank admission that the company’s fate is tied to a singular, unpredictable individual whose attention is divided and whose ventures are deeply, financially entangled. For a company whose ultimate goal is a permanent Mars colony with at least a million inhabitants—a vision that could make Musk billions—the terrestrial risks of his leadership style are now documented in black and white for all prospective shareholders to see.

What to watch after the IPO

As SpaceX enters the public market, investors must weigh its transformative potential against the governance risks embedded in its structure. Key metrics to monitor will include the financial performance of xAI (now consolidated) and its ongoing drain on SpaceX’s capital, the resolution of the Tesla shareholder lawsuit, and any new competitive moves by Musk’s other ventures that could directly challenge SpaceX’s core business. The filing has set the stage: the company’s success is inextricably linked to Musk, but its stability may depend on how well he manages—or is constrained from mismanaging—the conflicts of interest he has so transparently created.