Financial Times: SpaceX IPO showcases Elon Musk's storytelling ability, but the $1.78 trillion valuation still needs validation from real cash flow

BlockBeats news, June 5—The Financial Times published an article stating that the most distinctive aspect of the SpaceX IPO is that it’s difficult for outsiders to determine what kind of company it will become in 10 years, 5 years, or even 2 years from now, and this may be exactly what Musk intends to convey. On Wednesday, SpaceX confirmed it is seeking a valuation of $1.78 trillion, which, if achieved, would make it the seventh largest company by market capitalization globally. However, the path supporting this valuation is far from clear. In February this year, Musk merged SpaceX with xAI, suddenly making AI the most important business for SpaceX. Previously, SpaceX’s core goal had always been enabling humanity to become a multiplanetary species; now, AI dominates the company’s roadmap, with xAI accounting for more than three-quarters of capital expenditures in the first quarter, and 93% of the addressable market in the prospectus being related to AI.

Musk excels at constantly restructuring the narrative around his businesses based on market preferences. Previously, SolarCity was merged into Tesla and reshaped as an alternative energy group, and Twitter was also integrated with xAI. Currently, SpaceX supports the xAI deal with the narrative of combining rockets with AI, aiming to surpass competitors by deploying AI data centers in space.

However, SpaceX last year launched around 2,200 metric tons into orbit, while Musk stated that to participate in the orbital data center business, the company would need to launch 1 million tons per year. SpaceX’s rockets and Starlink satellite communication network are indeed significant accomplishments, but Musk’s real strength lies in creating narratives. The article also notes that ultimately, true cash flow will be key in validating the valuation.