What does Musk’s SpaceX IPO freak show say about us?

If you’re reading this, congratulations: you are officially closer to having the net worth of billionaire Amazon boss Jeff Bezos than he is to having the net worth of South African-born American trillionaire Elon Musk.

After Friday’s blockbuster initial public offering (IPO) for his rocket-producing, space-exploration, human-galactic-colony-conduit and AI company, Space Exploration Tech (SpaceX), Forbes updated the net worth of Musk ― who was already the richest human alive ― to declare him the first trillionaire in modern history.

For context, at the time of writing, Bezos ranks on the Forbes Real Time Billionaires list at number 4, with a colossal net worth of $248.9bn, or more than R4-trillion. Theoretically, if a person worked every single day for $7,000 a year from the lifetime of Jesus of Nazareth until today, they would only have $5.17bn.

As fun as it is to number crunch on the sheer meaningless absurdity of these numbers being tied to the personal wealth of individual human beings, it is probably far more interesting to look under the hood of this IPO to make sense of where these numbers are being drawn from, or at least try.

Before investors could even buy a share in SpaceX, it enjoyed a $1.77-trillion valuation, eclipsing IPO valuations of companies such as Alibaba, Amazon and even Saudi Aramco. It is chasing a $28.5-trillion addressable market, or a quarter of the entire planet’s annual economic output …on rockets.

While Starlink is a hugely successful part of the business, other areas of the business, including rockets and launching operations, have come at a massive cost.

The company’s own prospectus says that its space segment revenue is primarily derived from fixed-price contracts, under which the company agrees to deliver specified products or services at a predetermined price regardless of the actual costs incurred.

“As a result, if we experience cost overruns on these contracts, including from factors outside our control, we are required to absorb the excess costs, which may reduce profitability or result in losses, strain cash flows and impact our ability to invest in future growth.”

The prospectus said its AI segment incurred significant losses since its inception, and the company may not achieve or sustain profitability in this segment, and the returns on AI investments may be inadequate to justify the capital deployed.

“Furthermore, the continued improvement of AI model capabilities has historically depended in part on scaling laws, the empirical observation that model performance improves with increased compute, data and model size, but there is uncertainty as to how long these scaling relationships will continue to hold.”

Critics are already decrying the valuation as aggressive and lofty, and are understandably queasy about the prospect of the equivalent of about a billion gainfully employed people across the planet handing a rocket company three times the world’s food production budget.

This is a company that incurred a net loss of $4.9bn in 2025 against revenue of $18.5bn. This is over a decade after Elon Musk tried contracting goods and services to the US government on for size. I think down here, we call those … tenders.

For those not in the know, a book called The Space Barons by Christian Davenport goes into this in some detail. In 2014, SpaceX sued the US National Aeronautics and Space Administration (NASA) and the US Air Force in a bid to break the Lockheed Martin and Boeing chokehold on their supplier base.

The numbers might not add up, or as the kids would say, the math might not math. But investors are far from swimming away from the current of SpaceX’s waves, and some might feel compelled to join in by sheer dint of the fact that they don’t see anyone else heading for the hills.

Despite the fundamentals, those in support of the IPO and the company say that the impossible valuation of the company leans heavily on its potential as an AI company. After all, AI-related capital expenditure was the second-largest driver of quarterly GDP growth for the US economy behind consumption.

That would be a compelling pitch if the frontrunner crop of AI companies were profitable, and none of them has posted a profit as yet. And by the looks of things, SpaceX probably won’t be the first to make a profit either.

Even Sam Altman’s OpenAI had to can Sora-2 because, despite people being addicted to glossy AI slop media, the company has still not come up with a compelling business case to present to investors.

And what are the accountability guardrails if things go wrong? While Musk owns 42% of SpaceX following the IPO, he still has a massive 82.4% of voting control over the company. This means that, despite being publicly traded, no one can remove him as CEO of SpaceX except him.

When the business fundamentals and the state of the tech and AI market are stripped away, the only positive argument for SpaceX that seems to remain is Elon Musk himself. If you missed the Tesla moment, this is your next shot at a hit of Musk magic, retail investors are told.

The numbers might not add up, or as the kids would say, the math might not math. But investors are far from swimming away from the current of SpaceX’s waves, and some might feel compelled to join in by sheer dint of the fact that they don’t see anyone else heading for the hills.

This sounds a lot like the proposal that was made to South Africans to back another billionaire in an election that took place nearly a decade ago, in the hopes that he would work his magic and get us to the Promised Land. It seems that the more things change, the more they stay the same.