Elon Musk is taking SpaceX's minority shareholders for a ride
5 hours ago
- #SpaceX
- #Elon Musk
- #xAI
- SpaceX is buying xAI in an all-share transaction valued at $1.25 trillion.
- Elon Musk describes the combined entity as the most ambitious, vertically integrated innovation engine on and off Earth.
- SpaceX's minority shareholders may view the deal as a bailout of loss-making xAI rather than a strategic move.
- Musk owns 42% of SpaceX, with outside shareholders including UK investment trusts Scottish Mortgage and Edinburgh Worldwide.
- SpaceX's core business is launching satellites and operating Starlink, while xAI is a cash-burning AI startup.
- Musk argues that AI's energy demands necessitate space-based solutions, but critics question the need for combining the two companies.
- SpaceX is valued at $1 trillion and xAI at $250 billion, with concerns that SpaceX is overpaying.
- The deal appears to benefit Musk and xAI at the expense of SpaceX's outside investors.
- The transaction may be overshadowed by the excitement of SpaceX's upcoming public listing.