Elon Musk on path to become world’s first trillionaire with SpaceX-xAI
Elon Musk’s quest to become the world’s first trillionaire will likely be fueled by rockets rather than cars, as SpaceX now accounts for nearly two-thirds of the world’s population. Tesla’s CEO’s wealth.
Musk became the first person to surpass $800 billion this week, with his net worth currently sitting around $845 billion. Forbes. He’s worth more than the next three richest people – Google co-founders Larry Page and Sergey Brin and Meta CEO Mark Zuckerberg – merged.
The tech mogul’s unprecedented wealth soared after aerospace and defense company SpaceX acquired artificial intelligence and social media company xAI this week in a deal that valued the combined entity at $1.25 trillion, according to financial documents reviewed by CNBC.
Since Musk’s stake in the combined company is estimated to be around 43%, his shares would be worth over $530 billion, marking a rapid change in his fortunes.
Musk’s priorities are likely shifting his focus more towards SpaceX than Tesla; This is a fact that the EV company acknowledged in its latest report. proxy filingIt was stated here that “the majority of Mr. Musk’s wealth is now derived from other business ventures.”
Last year, Musk confirmed he wanted to take SpaceX public in 2026, which would make Tesla a less common component of his liquid wealth. But it still needs support from public market investors, who may be reluctant to pay a company that combines a defense contractor and satellite business with a cash-burning AI model developer trying to rival Google, OpenAI and Anthropic.
According to research from FedScout, SpaceX has received more than $20 billion in contracts with the federal government; More lucrative contracts are also on the way, and Musk framed the acquisition as the next step toward “orbital data centers.”
“As a pure SpaceX shareholder, you’ve muddied your story a little bit, but the opportunity has gotten a lot bigger,” said Greg Martin, managing director at Rainmaker Securities, which works on transactions for pre-IPO companies. “It makes sense for them to have access to a much larger capital market, especially with xAI having an insatiable need for capital.”
XAI is currently being investigated by authorities in Europe, Asia, Australia and California after the company’s Grok image generator allowed users to create and share explicit “deepfake” images of children and women.
It’s unclear whether Musk’s merger will require any regulatory review. Democratic senators this week called on the Pentagon to investigate SpaceX’s unnamed Chinese investors in the company.
Musk still has a huge incentive to continue focusing on Tesla. Late last year, shareholders voted to approve a new pay package that could be worth $1 trillion, paid out in 12 tranches if Tesla hits a certain target. milestonesIncluding market value gains and operational successes over the next decade. The first tranche of stock will be paid out if Tesla reaches a market cap of $2 trillion, which is about $460 billion more than the current valuation.
Tesla said in a proxy filing detailing the plan that the structure aims to “prevent other initiatives from being prioritized.”
But that strategy may not work, Columbia Law professor Dorothy Lund, an expert on corporate and securities law, told CNBC in an email.
Lund wrote that Musk is now “negotiating pay packages at every company and every board of directors trying to persuade him to pay attention through fact-finding.” “If SpaceX/xAI gives it more money and a larger share, the Tesla package may look less attractive.”
Before the xAI acquisition, Musk owned about 42% of SpaceX and controlled 80% of the votes, according to FCC reports. Its current ownership in Tesla is between 11% and 15% of outstanding shares, depending on what’s included in its holdings, according to public filings.
The company’s stock price has fallen nearly 9% this year as Tesla’s brand value and underlying car sales are in decline and its long-promised robotaxi and humanoid robots are still in development.
Based on Musk’s ownership in SpaceX and assuming Tesla shares hold steady, the rocket and AI company would need to reach a valuation of around $1.6 trillion for the world’s richest person to reach trillionaire status.
Ross Gerber, CEO of investment firm Gerber Kawasaki, is assertive that Musk will never want to take SpaceX public as an independent entity. Rather, he expects to see a merger between SpaceX and Tesla, and predicted this week It would be listed on the New York Stock Exchange under the symbol X, previously owned by US Steel.
Gerber is a long-time Tesla investor and now owns a stake in SpaceX after the company previously backed Musk’s leveraged buyout of Twitter in 2022. Musk rebranded Twitter as X and merged the social network with xAI last year.
Gerber said solidifying his empire makes sense because it would allow Musk to realize his dream of running a major company under the X brand. alphabet Gerber, who announced this week that he will spend up to $185 billion on capital expenditures this year, said Musk will need to be able to bring in large amounts of cash.
“This huge asset will make it easier for them to raise money and borrow money,” he said. “How else can Musk compete and become a major AI player?”
Musk did not respond to a request for comment.
WRISTWATCH: SpaceX acquired xAI
