Elon Musk wants to be a trillionaire — here's how SpaceX may get him there

Elon Musk is on a trajectory towards becoming the world's first trillionaire, with rockets taking center stage in his financial ascent rather than his electric vehicle enterprise, Tesla. Recently, Musk's net worth soared past the $800 billion mark, reaching approximately $845 billion, as reported by Forbes. This remarkable wealth positions him ahead of the combined fortunes of Google co-founders Larry Page and Sergey Brin, along with Meta’s Mark Zuckerberg. The significant jump in Musk's wealth is attributed to SpaceX's recent merger with his artificial intelligence and social media company, xAI. Financial documents reviewed by CNBC indicate that this merger has created a new entity valued at an impressive $1.25 trillion. Musk's stake in this combined firm is estimated at around 43%, translating to a valuation of over $530 billion, illustrating a dramatic shift in his financial landscape. As Musk’s wealth pivots towards SpaceX, the electric vehicle manufacturer Tesla has acknowledged in its latest proxy filing that a majority of Musk’s wealth now stems from his other ventures. Last year, Musk indicated his intentions to take SpaceX public by 2026, suggesting that Tesla's role in his financial portfolio may diminish over time. However, the challenge remains to attract public market investors to a company that merges defense contracting, satellite operations, and an ambitious AI model that aims to rival giants like Google and OpenAI. SpaceX has already secured over $20 billion in federal government contracts, with more lucrative deals anticipated. Musk has characterized the merger with xAI as a pivotal step towards establishing "orbital data centers." Industry experts like Greg Martin from Rainmaker Securities note that while the merger complicates Musk's position as a pure-play SpaceX investor, it also significantly broadens the company’s capital market prospects. Despite the promising outlook, xAI is currently under scrutiny from regulators across Europe, Asia, Australia, and California due to concerns surrounding the company's Grok image generator, which has been linked to the creation of troubling deepfake content. It remains uncertain if the merger will trigger any regulatory reviews. Political pressures also loom, as Democratic senators have urged the Pentagon to investigate SpaceX regarding undisclosed Chinese investments. Nevertheless, Musk has ample motivation to remain engaged with Tesla, especially following a recent shareholder vote that approved a new pay structure potentially worth $1 trillion, contingent upon reaching specific operational milestones over the next decade. Tesla's proxy filing highlights that the pay package is designed to ensure Musk's focus remains on the company. However, experts like Dorothy Lund from Columbia Law School argue that Musk's engagements with multiple companies may dilute this focus. Musk's ownership stakes reveal a complex landscape: he previously held about 42% of SpaceX and controlled 80% of the voting rights, while his Tesla share ownership varies between 11% and 15%. Tesla's stock has seen a decline of around 9% this year, compounded by challenges in brand value and core sales. To reach trillionaire status, SpaceX's valuation would need to hit approximately $1.6 trillion, assuming Tesla's stock remains stable. Investment CEO Ross Gerber speculates that Musk may forgo taking SpaceX public as a standalone entity, instead envisioning a merger between SpaceX and Tesla under a unified brand, likely indicated by the ticker symbol "X". In light of recent announcements from Alphabet regarding substantial capital expenditures, Gerber emphasizes the need for Musk to generate significant cash flows to remain competitive in the AI sector. As Musk continues to navigate these complex corporate structures, the unfolding developments will be closely watched by investors and fans alike.