SpaceX's stock market blast-off could be Musk's biggest gamble yet Simon Jack Business editorBBCIt's 07:25 am, 13 October 2024, at Starbase, near Boca Chica on the Texas side of the US/Mexico border, and on the launch pad stands the biggest rocket ever made. Its engines fire and it climbs into the skies over the Gulf of Mexico to cheers and screams in the SpaceX control room.But the launch is not the main event. What goes up must come down – and how it comes down will become a milestone in space exploration.Seven minutes later, the massive rocket booster that blasted the craft towards space starts falling back to Earth – until its engines reignite as planned.
It slows its descent and guides itself with pinpoint precision so it can be captured by a clasp called Mechazilla, or "the chopsticks", by engineers who have achieved something that's never been done before.Amid the whoops and high-fives in SpaceX's control room, Elon Musk tells his millions of social media followers that this is a "big step towards making life multiplanetary" - a reusable rocket that will slash the costs of launching things into orbit, to the Moon and one day to Mars.A company with a futuristic vision, led by what some would call a maverick unconventional genius, SpaceX and Musk have drawn comparisons with Tony Stark, leader of Stark Industries and also known as Iron Man of the Marvel Comics Universe.Anadolu via ImagesThe launch of Starship in October 2024, and return of part of it to the launch pad, marked another milestone in Elon Musk's ambitions for deep-space explorationOn 12 June, trading will begin in a chunk of shares in a company that, up to now, only Musk and a select group of rich private institutions have been able or invited to own.It is perhaps little wonder that more than one UK stockbroker has told the BBC that there has been "a surge" in interest in signing up for the chance to buy shares in this exciting company, controlled by a talismanic individual, that has captured the world's imagination. UK retail investors are likely to be allocated around £1.5bn worth of shares and one of the UK's leading investing platforms hopes this could encourage a new generation of investors.Simon Belsham, Chief Client Officer at Hargreaves Lansdown said: "While we recognise this IPO might not be right for everyone, it's an exciting moment for many of our clients. We're expecting this might be a first foray into investing for many."Even if you don't apply directly to buy shares, if you have retirement savings invested in shares - as almost everyone with a pension plan does - then it is very likely you will soon be a part-owner of a company, whether you like it or not, that sits at the crossroads between technology and geopolitics and, as Musk would have it, the very future of the human race.The chance for normal Earthlings to buy shares in SpaceX is one of the most important moments in the history of stock markets and is close at hand – and one that will almost certainly make Elon Musk the world's first ever trillionaire.ReutersA SpaceX stock market listing could make Elon Musk the world's first trillionaireOn the first few pages of the prospectus – or sales brochure – for SpaceX shares is this modest mission statement: "To build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe and to extend the light of consciousness to the stars."But SpaceX isn't just about rockets – it's not even mainly about rockets.
It's a bet on the future of artificial intelligence (AI). And the success or failure of its imminent partial sale to the public is an important test of the hitherto unbridled investor optimism – and some people's dismay - that AI will hoover up large parts of the world economy.The continued concentration of power in a few US mega-corps also poses important questions about the way business, economics and politics works here on Earth. And many think this is Musk's Icarus moment – when he flies too close to the sun.
"I think it's an Elon Musk ego project," says Sinead O'Sullivan, an economist who has worked for Nasa in the past.So should we be pleased we will all likely be passengers on his astral journey?A staggering valuationSpaceX has filed for an initial public offering (IPO) of its shares. Although it's only selling a portion of the company to the likes of us, the price of the shares Elon Musk is selling means we can calculate the price tag of the whole company.The bankers selling the shares have put a target price tag on the company on $1.75trn - which puts it comfortably in the top 10 most valuable companies on Earth.That is a staggering valuation for a company that lost nearly $5bn (£3.7bn) last year. So what are we buying?SpaceX is in fact several businesses in one company.
It designs rockets as well as manufacturing and launching its own and other people's satellites. Its launch capabilities alone dwarf that of any other company – or indeed country on Earth.Its own satellites also form the basis of the Starlink communications network, which has proven to have crucial geopolitical importance during Ukraine's defence against the Russian invasion.This is a profitable business and one that generates significant income. But even the most optimistic estimates value this part of SpaceX at around $300bn - less than 20% of SpaceX's $1.75trn target valuation.Big bet on AIThe real bet is on AI because bundled into SpaceX is Elon Musk's AI company xAI, along with a deeper space programme with plans to create data centres in space providing vast computing power – powered by the sun, cooled by the chill of space - while creating human-crewed bases on the Moon and eventually Mars.The success of SpaceX depends to a huge extent on its AI business.
Of the $28.5trn market that SpaceX has identified for its services, known as its total addressable market – $26.5trn of that is in AI.AI giants' race to raise funds he
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