SpaceX, having merged with xAI in February 2026, recently completed the largest IPO in history, raising $75 billion at a valuation of approximately $1.77 trillion. The company's prospectus revealed a reclassification from a rocket and satellite internet provider to a "space AI compute infrastructure" business, with AI contributing $26.5 trillion to its projected total addressable market (TAM) of $28.5 trillion. This valuation strategy contrasts sharply with typical tech valuations, with SpaceX trading at 94.6 times its 2025 revenue of $18.67 billion, compared to Nvidia (20-30x) or AWS (12-15x) at their respective peaks.
The IPO was significantly oversubscribed, with demand reportedly topping $250 billion, and 30% of the float was made available to retail investors. The S-1 filing, however, disclosed a GAAP net loss of $4.94 billion for 2025. Analysts like Aswath Damodaran estimated the enterprise value around $1.22 trillion, approximately 30% below the offering price, while Morningstar set a fair value of $63 per share. The company acknowledged in its prospectus that space-based AI computing relies on "technology that does not yet exist" and "may never achieve commercial viability."
The substantial valuation is largely attributed to the AI segment, which includes xAI's Grok and the X platform. SpaceX aims to launch up to a million data-center satellites into orbit using its Starship rocket to move AI computing needs off-Earth, citing less regulation and greater profit potential. This requires massive-scale production of AI chips, with plans for a "Terafab" capable of producing 1 Terawatt of compute capacity, vastly exceeding the current U.S. total of 0.5 Terawatt-equivalent. The company also disclosed that xAI paid Tesla $506 million for Megapack batteries and $131 million for Cybertrucks in FY2025, and Tesla made $2 billion in cash equity investments into xAI before Q1 2026.
In a post-IPO move, just four days after its Nasdaq debut, SpaceX acquired AI coding tool company Cursor for $60 billion in an all-stock deal. This acquisition, confirmed via an 8-K SEC filing on June 16, 2026, aims to bolster xAI's competitive position against rivals like Anthropic and OpenAI. Cursor, which reached $4 billion in annualized revenue in June 2026, will operate as a wholly-owned subsidiary, with the deal expected to close in Q3 2026. This follows earlier insights that xAI's Grok division lost $6.35 billion in 2025, creating strong incentives for SpaceX to integrate Cursor into its own ecosystem.
The IPO proceeds were also used to pay down and refinance debt from the 2022 Twitter acquisition, which was bundled into the xAI merger package. This resulted in a $1.526 billion loss on debt extinguishment, effectively transferring historical acquisition liabilities to public shareholders. Additionally, "failed sale-leasebacks" related to xAI's capital expenditures led to the booking of $4.052 billion in long-term debt at the end of 2025 and an additional $5.365 billion in Q1 2026.
