SpaceX: the tollbooth to the stars

The financial world is rife with anticipation for what could be one of the most monumental events in market history: the public debut of SpaceX. Rumoured estimates project a staggering $1.75 trillion valuation, with plans to raise $75 billion in capital.

Founded in 2002 when NASA and legacy defense contractors completely dominated the aerospace sector, SpaceX has spent two decades rewriting the rules of spaceflight. Today, the company handles 80% of all payload mass launched into orbit, effectively establishing itself as the tollbooth to the stars for decades to come.

A Singular Company

Consider what you actually get when you buy into it: space, satellites, and artificial intelligence, arguably the three most consequential industries of the coming decades. Through its merger with xAI in February, SpaceX now houses Colossus I and II, some of the largest datacenters in the world. As the AI industry shifts from training to inference, and AI labs slowly realize that chasing benchmarks brings them no closer to enterprise adoption, the ability to run models at scale becomes the prize, and demand is sure to grow. xAI is among the very few with the infrastructure and the talent to deliver it. Anthropic is already a customer, paying xAI $1.25 billion a month for compute through May 2029.

For context, AI represents roughly 80% of SpaceX’s capital expenditure in the first three months of 2026. A reminder of just how expensive building AI infrastructure is, dwarfing even what it costs to send rockets into space.

Source: SpaceX S-1 filing

This is the power of the combined entity: the full synergies of owning three business lines at once means SpaceX can subsidize its growth. Today, Starlink, the satellite-communication arm, is the cash cow of the business, generating the majority of revenue and operating cash flow.

Source: Tomasz Tunguz

With xAI now tucked under its balance sheet, Starlink’s operating cash flow can help fund the massive buildout of AI infrastructure. And the AI subsidiary can now also tap into institutional debt markets from a much stronger footing, borrowing on the strength of its parent company at far more attractive terms than it could as a standalone venture. While pure-play AI labs continue to operate with uncertain economics and face growing fatigue in private markets, xAI benefits from being tethered to a real operating business. Pure AI labs must keep selling equity and lack an operating business to cross-subsidize their infrastructure.

Addressing valuation because of the noise

A word on valuation, and just a word, because it really isn’t the point. At $1.75 trillion, SpaceX would become the largest IPO to date. The temptation will be to model it like another tech stock, anchoring valuation on multiples, traction, and comparables. Resist that urge. In a market of companies claiming to sell the future, SpaceX is the real deal: a singular company with rockets, satellites, and AI.

It will be THE tollbooth to space for decades to come

Just look at the numbers. SpaceX delivered 80% of every kilo put into space last year. It accounts for 66% of all active satellites orbiting earth, with Starlink alone operating more than 9,000 of them. Sending a kilo to orbit now costs roughly $1,000, down from $16,000 just seventeen years ago, and is projected to fall to $100 once Starship goes commercial. Musk’s vision to reach Mars and build something durable in space requires a specific combination of assets: rockets, communications, and intelligence. SpaceX now holds all three components under a single entity. And of course, Tesla holds the fourth piece of the puzzle: robotics, the labor of space. A merger between the two looks like a foregone conclusion.

Simply put, there is SpaceX, and then there is everyone else. This is not your typical company, and it should not be valued like one. It has such a head start, that it will likely dominate for decades to come.

Source: Ark Invest

A capital-efficient business from the start

And all of this was achieved at remarkable capital efficiency. SpaceX has raised a total of roughly $12 billion to date. Compare that to OpenAI’s latest financing round alone, which raised $120 billion in March. This is an extraordinarily capital-efficient company and that DNA will continue well beyond the IPO.

An IPO structure like no other

It would be impossible, and unfair, to discuss SpaceX without addressing Elon Musk. Whether you like him or not, it is undoubtable that Elon is one of, if not the, greatest visionaries of our time. He is part of why SpaceX is the singular company that it is today. His business acumen and his relentlessness to bring his vision to life are simply admirable.

The structure of the IPO itself is a reflection of that conviction. The best way to ensure complete alignment between Elon and SpaceX is to tie his compensation to operational targets. His pay package is unbelievably rich, but so are the targets required to unlock it. Musk must help SpaceX reach a market capitalization of $7.5 trillion, and establish a permanent human colony on Mars of over 1 million permanent inhabitants. What an incredible incentive-alignment mechanism for the most visionary of founders.

But the IPO is just as rich in what it offers investors. SpaceX intends to allocate 30% of the public offering to the retail market; for context, the historical institutional-to-retail split for IPOs sits closer to 90/10. And the structure of share release for existing investors is elegant. Investors face a traditional lock-up period, but with early-release provisions tied to the performance of the underlying, that is, to how well SpaceX stock performs after listing. Instead of creating a massive sell wall on day 180, as is typical with most IPOs, this staggered structure with performance-based early releases spreads out potential supply and better aligns early holders with the company’s post-IPO performance. The structure is a smart mechanism to align investors with the performance of the company. Most notably, Musk himself is subject to the longest holding period of all, 366 days with no early release provisions. He is entirely tied to the company’s performance, and has no ‘easy way out’.

To space and beyond

As the frenzy for the IPO builds towards June 12th, I encourage everyone to savour and embrace the achievements of this extraordinary company. From its first launch on Omelek island in 2006 to the largest public-market offering ever recorded, in just two decades, it is a reminder of what can be accomplished by sheer force of will, hard work and capital. I can only dream of what is next to come...

SpaceX, I salute you.