The $250 Billion AI Gamble: Inside SpaceX’s Record-Breaking IPO and Its $5 Billion Loss

SpaceX is set to pull off the largest initial public offering in history on June 12, with orders more than double the available supply and a valuation north of $1.7 trillion. Yet beneath the frenzy lies a stark contradiction: the company lost nearly $5 billion last fiscal year, dragged down by its costly integration of artificial intelligence startup xAI.

The xAI takeover, valued at a whopping $250 billion, has put a deep dent in SpaceX’s finances. In the first quarter alone, the AI unit burned through almost $2.5 billion. The prior year the company had reported a healthy profit. Now investors attending the final roadshow at Morgan Stanley’s New York headquarters are pressing management — including President Gwynne Shotwell and CFO Bret Johnsen — for clarity on how xAI will mesh with the core space business.

Starlink remains the silver lining. The satellite internet network now counts over 10 million subscribers and generated an operating profit of $7.2 billion last year. Total revenue climbed to $18.67 billion, with Starlink contributing the lion’s share. That cash engine is what allows SpaceX to pursue both its Starship ambitions and the expensive xAI integration — but it also underscores the gap between operational strength and the bottom-line hit from the AI bet.

The IPO itself is a spectacle of scale. SpaceX will issue approximately 556 million shares at a fixed price of $135 each, targeting gross proceeds of $75 billion. That gives the company a market capitalization of roughly $1.75 trillion to $1.78 trillion. Trading will begin on the Nasdaq under the ticker SPCX, with the final price set on June 11.

Should investors sell immediately? Or is it worth buying SpaceX?

Retail investors are getting an unusually big piece of the pie. Fully 30% of the offering is reserved for individuals — triple the typical allocation for a major tech debut. Brokers have scrambled to lower barriers. Fidelity, which previously required a $500,000 account balance, slashed the minimum to just $2,000. SoFi, meanwhile, imposes no limit at all. The subscription window closes on the Wednesday before listing.

Institutional demand is equally ferocious. Orders from big money managers have already topped $10 billion, making the deal more than twice oversubscribed. That appetite exists despite a technical hiccup: the Federal Aviation Administration grounded the new Starship V3 after a May test flight where the booster’s engines failed to ignite as planned. SpaceX still aims for 1,000 Starship launches annually once the vehicle is cleared.

Control of the company remains tightly held. Elon Musk wields almost 82% of voting rights through a multi-class share structure, and the free float will be a razor-thin 5%. To prevent a post-IPO sell-off, insiders face a lockup of exactly 366 days — a full year before they can unload a single share.

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Those constraints haven’t tempered expectations for a rapid index ascent. Analysts predict SpaceX will meet the requirements for inclusion in the Nasdaq-100 after just 15 trading days. That would trigger automatic buying by index funds, adding further upward pressure on the already scarce stock.

Not everyone is convinced the price is justified. Morningstar analysts peg the fair value at $780 billion — less than half the IPO valuation. For now, however, the combination of limited supply, massive retail demand, and the promise of index inclusion is creating a perfect storm. The countdown to the Nasdaq bell has begun, and the world’s most valuable private company is about to become its most talked-about public one.

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