[Business & Issue] Why Did Musk Shift Toward a SpaceX IPO?

Record-Breaking IPO Boosts Musk's Wealth
Raising Capital Amid Fierce Space AI Data Center Competition

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SpaceX, one of the leading space companies in the United States, has announced plans to go public next year, opening the door to what could be the largest initial public offering (IPO) in history. With CEO Elon Musk lifting the restrictions he had placed to defend his management control, investment companies around the world are now eager to secure stakes in SpaceX. If the IPO succeeds and brings in a large influx of capital, the construction of the space artificial intelligence (AI) data center that SpaceX is planning will accelerate. Should SpaceX secure a lead in the rapidly growing space AI data center market, which competitors are already entering, the company is expected to see significant expansion in its business scale.

Musk Confirms SpaceX IPO Plans... Poised for Record-Breaking Offering

On December 10 (local time), CEO Elon Musk acknowledged via social media that reports of SpaceX planning to go public next year are true. The previous day, Bloomberg News, citing sources, reported that "SpaceX is preparing for an IPO between June and July next year, aiming to raise more than $30 billion," and that "the company's valuation could reach as much as $1.5 trillion."

If SpaceX's IPO proceeds as planned, it will set a new record for the largest IPO in history. The current record is held by Saudi Arabian oil company Aramco, which raised $29 billion when it went public on the Saudi stock exchange in 2019. SpaceX plans to invest most of the capital raised into building AI data centers in space.

Market analysts expect SpaceX's revenue this year to reach $15 billion, a 14.5% increase from last year, and to rise to between $22 billion and $24 billion next year. The satellite internet business, Starlink, accounts for about 70% of total revenue. With Starlink's subscriber base surpassing 8 million this year and continuing to grow, most forecasts predict sustained revenue growth.

Intense Competition to Dominate the Space AI Data Center Market

Interior view of the artificial intelligence (AI) data center in New Carlisle, Indiana, USA. Photo by AP News Agency

With SpaceX's IPO plans now public, many investment firms are already showing strong interest in acquiring shares. Since its founding in 2002, SpaceX has been considered one of the most difficult companies to invest in, as CEO Elon Musk has refused to take the company public for over 20 years to defend his management control. In 2013, Musk famously emailed employees stating, "We will not go public until we reach Mars."

Currently, Musk holds a 42% stake in SpaceX, while Founders Fund and Fidelity each own 10%, and Google holds 7%, giving Musk an overwhelming share. In addition, through preferred shares and other mechanisms, Musk controls 79% of the voting rights. As a result, aside from early investors, other investment firms have been unable to acquire shares despite SpaceX's rapid growth.

The main reason Musk has decided to move forward with an IPO after more than 20 years of resistance is reportedly to fund the construction of a space AI data center. CNBC reported that SpaceX is developing technology to build AI data centers in Earth's orbit and is also working on solar power satellites to supply electricity to these centers. Musk recently posted on his social media platform X (formerly Twitter), "Within the next 4 to 5 years, we will build power satellites capable of supplying more than 100 gigawatts (GW) of solar energy annually in Earth's orbit," adding, "This could ultimately serve as the foundation for space AI data centers."

Space offers the advantage of unlimited solar energy without weather constraints and eliminates the need for separate cooling systems for data centers. As a result, not only space companies but also AI firms are racing to develop space AI data centers. According to The Wall Street Journal (WSJ), SpaceX competitor Blue Origin has operated a dedicated team for developing space data centers since last year. Jeff Bezos, Chairman of Amazon and head of Blue Origin, recently stated at a press conference, "Within 10 to 20 years, gigawatt-scale data centers will be built in space," emphasizing, "Within the next 20 years, space data centers will be more cost-competitive than those on Earth."

OpenAI, operator of ChatGPT, is also reportedly considering acquiring a rocket manufacturer to build a space AI data center. WSJ reported, "Sam Altman, CEO of OpenAI, has been discussing a multibillion-dollar acquisition or partnership with rocket startup Stoke Space since last summer."

If SpaceX secures a lead in the space AI data center market, it could achieve even stronger revenue growth. Goldman Sachs stated that the AI data center market was worth about $15 billion last year and is currently growing at an annual rate of over 26%. If this growth continues, the market is expected to reach $60 billion by 2030.

Crypto Industry Also Watching Closely... "Some Funds May Flow into Coins"

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Some observers suggest that a portion of the funds raised by SpaceX could flow into the cryptocurrency market. This anticipation is causing a stir in the crypto sector following news of SpaceX's IPO plans. Bloomberg News estimates that SpaceX already holds 3,991 bitcoins in its own accounts, valued at approximately $369 million.

CoinDesk, a cryptocurrency-focused media outlet, reported, "CEO Musk has drawn significant attention by purchasing Bitcoin and Dogecoin while developing Mars exploration vehicles at SpaceX, and the company still holds a large amount of Bitcoin," adding, "Even if only a small fraction of the anticipated $30 billion in IPO proceeds is used to purchase cryptocurrency, the market reaction could be significant."