Inside SpaceX's IPO: Elon Musk's most ambitious plan yet

In the days after the PayPal IPO in 2002, Elon Musk and company executives gathered at a Las Vegas casino to celebrate. But while others socialized by the pool, Musk was hunched over an old Soviet rocket manual and already planning his next venture: SpaceX.

“He’d come off what was an unequivocally big win, he was one of the largest shareholders, and yet he was focused on this next thing,” Kevin Hartz, an early PayPal investor who was at the party, told Reuters. “Now it’s a multi-trillion-dollar business.”

In the two decades since Musk took the reins at SpaceX, the company has grown into the world’s largest space business, launching thousands of Starlink internet satellites and pioneering reusable rockets, transforming the economics of space in a way Musk likens to inventing an airplane that no longer has to be destroyed after every flight.

Musk’s years of defying accepted logic through audacious risk-taking in space look set to be validated when SpaceX goes public this year at a possible valuation of $1.75 trillion, in what would be the largest public listing on record and one that could put him on track to become the world’s first trillionaire.

But what comes next may be an even bigger ask than building reusable rockets or the first mass-market electric vehicle, according to a Reuters review of more than 100 pages of excerpts from SpaceX’s confidential pre-IPO prospectus, offering the most detailed look at SpaceX’s financials and its future plans since Musk took the helm. Reuters published a series of exclusive stories based on the documents last week.

“I always thought he was crazy,” said Walter Isaacson, who spent two years shadowing Musk while writing a biography of the billionaire. “But the danger of betting against him is that he ends up being crazy like a fox and gets things done.”

As if torn from the pages of one of Musk’s favorite books, Douglas Adams’ The Hitchhiker’s Guide to the Galaxy, SpaceX’s prospectus recasts the company less as a maker of rockets and satellites and more as the future power in artificial intelligence, spanning space-based data centers and industries on the moon and Mars.

It promises to harness the sun for near-limitless energy to fuel the AI era, and declares that it will “make life multi-planetary, to understand the true nature of the universe and to extend the light of consciousness to the stars.”

“You want to wake up in the morning and think the future is going to be great,” reads an opening quote from Musk at the top of the document, known as an S-1, “and that’s what being a space-faring civilization is all about.”

SpaceX did not respond to requests for further comment on the filing.

'SWINGING BIG AND HOPING TO CASH IN'

Such out-of-this-world claims are raising questions from market observers and skeptics. But some of the world's biggest institutional firms and Musk loyalists – Fidelity Investments, Founders Fund and Valor Equity Partners – have remained committed as SpaceX endured years of rocket failures, revenue losses, lawsuits against the U.S. government, workplace injuries and geopolitical issues.

Musk’s credibility with investors rests on SpaceX’s ability to turn once-dubious ideas into operational businesses, most notably through the reusable Falcon 9 rocket and the Starlink broadband network it enabled.

“Twenty-five years ago, people thought we were insane, including me,” said Jim Cantrell, one of SpaceX’s earliest employees, who later left to start his own company. Now, “the idea of having products made on Mars and sold on Earth is not so insane.”

But the filing also shows SpaceX lost money last year, is spending far less on AI development than major tech rivals, and warns investors that projects ranging from settlements on the moon and Mars to orbital data centers rely on unproven technologies that may not be commercially viable, Reuters found.

Those more sober numbers have led some commentators to dismiss Musk’s vision as hype designed to inflate SpaceX’s valuation. Unlike the early days of reusable rockets or electric vehicles, AI is no empty frontier, with SpaceX set to compete against the world’s biggest companies, including OpenAI, Microsoft and Google owner Alphabet.

Among the filing's largest claims is that SpaceX is going after a total addressable market of $28.5 trillion, more than the total GDP of the United States, "a very swing for the fences number," said Eric Talley, a Columbia Law School professor who focuses on corporate governance, adding that Musk's "calling card is swinging big and hoping to cash in."

Ross Gerber, CEO of Gerber Kawasaki, an investment firm that owns SpaceX and Tesla shares, said investors are "willing to suspend fundamental analysis to not be left out."

"There's the perception that Elon did it once with Tesla and built a trillion-dollar company," he said, "and that he'll be able to do this again and again."

SPACEX'S RELIANCE ON MUSK

Musk’s space predictions have not always borne out. Timelines for Starship, the fully reusable rocket at the heart of SpaceX’s future, have repeatedly slipped amid explosive test failures, regulatory delays and engineering hurdles.

That matters because Starship underpins much of what SpaceX has promised investors, from expanding Starlink into new markets to lofting AI infrastructure into orbit and carrying astronauts for NASA missions beyond Earth. The risks are laid out bluntly in the prospectus.

“Any failure or delay in the development of Starship at scale … would delay or limit our ability to execute our growth strategy,” the S-1 said.

One of the starkest risks flagged in SpaceX’s pre-IPO filing is its reliance on Musk himself. He holds four titles, controls the board, and has an unusually structured compensation package tied to valuation targets as high as $7.5 trillion and milestones, such as settling one million people on Mars.

The filing describes Musk as “one of the great visionaries of our generation” and warns that a future without him could pose an existential challenge for the company, adding that selecting a successor may not happen in a “timely manner or at all.”

“He’s the only person reliably getting satellites into orbit, and astronauts down from the space station,” Isaacson, Musk’s biographer, said.

“He’s been able to turn science fiction into just science.”