The Space X IPO shows that Musk has discovered capitalism’s cheat code

Elon Musk, who has successfully admitted to cheating in video games, may have discovered the ultimate cheat code that will make him the first trillionaire in the world’s game of capitalism.

That may be the case for the SpaceX IPO, where the company filed its S1-approved SEC form on Thursday. The document was full of questionable claims about SpaceX’s future as an AI company, as well as embarrassing admissions about SpaceX, its new company xAI, and Grok.

And yet, none of these stares seem to be stopping SpaceX from targeting a record $1.75 trillion valuation.

What’s in the SpaceX IPO?

To explain how strange the filling really is, and how it can kill other offerings, let’s first ignore the names. Spacex xAI, Grok, Elon again Musk. Instead, imagine telling your financial advisor that you are looking for shares in a new company for a local market launch.

The company lost nearly $5 billion last year, on $18 billion in revenue. The income is making it look smaller, and its losses are increasing. But such is its currency, so he has high hopes for its future.

OK, says your financial advisor, raising a questioning eyebrow. It’s a risky bet, but one that can pay off big sometimes. What is the angle?

Well, he replies, the CEO is perfect for AI. This space launch company is actually an AI company now, having been quickly merged earlier this year with one of the CEO’s companies, one he described as “very small” among the big AI players. The merger was a grindstone, the cause of many losses for the merged company.

Who is the creator telling everyone to follow him? Voted them Mashable’s Fan Fav.

However, the connection of AI with the business of local presentation makes perfect sense. The CEO says it will launch AI data centers in space from 2028. And he totally believes that, despite the fact that this guy has a long history of making bold space-based predictions that never come true.

Do space AI data centers make sense? Who knows! “Space conditions in AI infrastructure have not been tested by us or anyone else,” the IPO noted. “Any component failure could result in permanent loss of capacity” — since there are no IT people to fix it.

But hey, what would make critical data center components fail in space? I mean, separately from the S-1 company’s inventory: geomagnetic storms, solar flares, cosmic rays, micrometeorites, orbital debris, and vibrations and thermal shocks from the initial launch. Oh, and “the useful life of our satellites is inherently shorter than that of the information technology systems and infrastructure they host,” the filing also says, but you try not to think about what that means for the data center business.

Eh, regulatory filings can be such Debbie Downers! The bottom line is that this guy really believes in his AI product, right? So much so that SpaceX’s IPO calls for an AI market capable of handling $26.5 billion (compared to the space launch and communications market of Starlink, which claims a total potential of $2 trillion). That AI product, by the way, comes with “Raw Voice Mode” and “Spicy Imagine Mode.” The IPO notes “high risks” of “damage to reputation,” not to mention regulatory and legal damages, due to “content that may be public … false information … exploitative images, intellectual property violations, “or content” that is harmful, abusive, harassing, or discriminatory.

Can it go wrong?

Well, apart from the open international investigation into whether the company’s product was used to make unauthorized deepfakes for children, as the IPO should also be aware. (You can almost hear the deep sighs from the lawyers who wrote this – but at least they didn’t have to talk about the whole MechaHitler thing.)

If we talk about legal damage, and you do not have a problem with the purchase of 3 billion dollars in the new data center for the purchase of the gas engine exposed by the IPO, although this doubles the risk when the company is already facing a large lawsuit from environmental groups. After all, this guy has a history of winning many of his legal battles! Just ignore the last one, where he violated a court order by skipping to China, and the judge found he had no right to bring the case in the first place.

Given all that information in the abstract, most financial advisors would advise you that the company isn’t worth the risk – if they don’t advise you to get your head checked.

Tesla cheat code

Tesla’s Berlin-Brandenburg Gigafactory in Grünheide, Germany.
Credit: Joko / imageBROKER / Shutterstock

In the case of SpaceX, however, your financial advisor may rush to invest before you do. The IPO sets aside 30 percent of the shares for so-called “retail investors,” an unusually high percentage; they are undoubtedly more likely to bet on the name, the personality, the myth, than the company’s fundamentals.

The reason, in fact, amounts to five words: “never bet against Elon Musk.” First mentioned by another PayPal billionaire and friend Peter Thiel, then by SpaceX investor Peter Diamandis, this rallying cry was made by the CEO of Morgan Stanley and Breyer Capital. It’s an article of faith — literally, in the headlines it uses to deflect Musk’s confusing moves, from the creation of the Cybertruck to Twitter’s highest-priced acquisition. (Which, given that Musk turned Twitter into the lesser-known X, then folded it into xAI, and then folded it. that (for SpaceX, it may go down as the most buried expense in corporate history.)

Musk has long been a master at show business. He has learned to dance on the ever-high ropes of a promised future. At a crucial time in Tesla’s early days, he placed pre-orders for the Model S before its prototype even existed. That lesson has fit well into the era of Tesla’s Cybertruck, when the company has been saddled with a weird-looking, slow-selling EV that’s become a joke with all the tire recalls and water leaks, led by cheaper Chinese rivals, and boycotted much of Europe.

In response, Musk simply siphoned off billions more from the company in order to be honored to stay, then steered Tesla toward another, more promising future. That future – full of humanoid robots and robotaxis – is almost as ephemeral, as unproven, and full of pitfalls (literally, Optimus robots fall into) like AI data centers in space. But at this stage, Musk can simply insist that it will happen, then sit back and tempt Tesla investors to bet on him.

Optimus’ robots, like SpaceX’s data centers, “allow near-term demonstrations that look impressive but don’t generate money in a meaningful way, while allowing Musk to make long-term estimates of ‘infinite’ profits that can be (almost) indefinitely deferred,” notes Tim Farris, president of satellite and telecom research firm TMF. The Rorschach test applies to investors who want to believe in the “never bet against Musk” myth.

Don’t worry that “never bet against Musk” isn’t literally true. In 2026, you can make money by selling short (that is, betting against) Tesla stock, which is down about 5 percent from where it was in Jan. 1. You can also make more than 30 percent profit on prediction markets in the last year, as one canny investor did, by predicting that Musk’s DOGE side quest will ultimately fail.

There are signs of cracks in Wall Street’s wall of belief in Tesla. Last year was the first decline in company revenue on the books. Tesla investors are reportedly afraid that the SpaceX IPO will cost them – SpaceX, Tesla’s biggest investor who grew to Fortune, will be Musk’s “new kid”.

But Musk should only dance before the Tesla wave for a while longer. If all goes according to plan, and the AI ​​bubble doesn’t burst before he brings his shiny new AI platform to market next month, Musk’s army of retail investors will help turn the windy promises into billions of dollars in net worth for their hero.

And then…we have the courage to go where no economist has gone before. With access to that much money and that much voting power — Musk will control 85 percent of SpaceX’s votes, making him invulnerable to being fired as CEO — there’s no limit to the height of the tightrope he can dance to. It is not beyond the bounds of reason to imagine Musk folding the failing Tesla into SpaceX, then surprising investors by investigating more unproven plans for humanoid robots that maintain space data centers.

In the game of global capitalism, being a trillionaire may be the ultimate cheat code.