For years, SpaceX resisted going public. Elon Musk repeatedly said the company would not consider an IPO until its rockets were routinely flying to Mars. That position has now changed, and the shift is being driven by artificial intelligence.
According to people familiar with the matter, the rapid rise of AI computing has pushed Musk to rethink how SpaceX is funded and what role it plays in the global technology race. The core idea is no longer just rockets or satellites. It is about building the next layer of computing infrastructure, and doing it faster than rivals.
The plan drawing the most attention inside SpaceX is the idea of putting large scale AI data centers into orbit. These would be solar powered satellites capable of handling massive amounts of computation. In space, power generation and physical expansion are far less constrained than on Earth, where data centers are increasingly limited by land, electricity grids, and permitting delays.
This matters directly for Musk’s AI company, xAI. Like its competitors, xAI faces a growing shortage of affordable compute. Training and running advanced AI models requires enormous energy and hardware investment. Space based data centers offer a way to scale compute without waiting on local utilities or government approvals.
Speed has become critical. OpenAI and Anthropic are both exploring ways to secure long term computing advantages, and Sam Altman has previously looked into acquiring or partnering with a rocket company to deploy AI infrastructure in space. Jeff Bezos has also publicly said that moving data centers into orbit could make sense. Musk wants SpaceX to move first and set the standard.
Executing this plan would require tens of billions of dollars, and quickly. While SpaceX has raised large private rounds in the past, people close to the company say private funding alone may not be sufficient for a project of this scale and urgency. Public markets offer a way to raise massive capital in a single step, something an IPO can deliver.
This is where SpaceX’s existing assets come into play. Starship is central to the strategy. The next generation rocket is designed to carry extremely large payloads at lower cost, which makes launching data center satellites economically possible. Without Starship, the orbital compute vision would be far harder to execute.
Starlink also plays a key role. SpaceX already operates a global satellite network that delivers data at scale. Combined with Starship, Starlink positions SpaceX not just as a launch provider, but as core infrastructure for the global AI economy. Data moves through Starlink. Compute could soon live in orbit. Together, they form a vertically integrated system.
Inside SpaceX, what was once viewed as a medium or long term research effort became urgent around the middle of last year. Former employees say the company has spent years developing computing hardware suitable for space. By late last year, SpaceX reportedly made a breakthrough after dedicating more resources to solving deployment and power challenges.
The push toward an IPO surprised many observers, especially given Musk’s frequent criticism of running a public company while leading Tesla. But investors see logic in the move. A publicly traded SpaceX could fund orbital AI infrastructure, support xAI’s growth, and give Musk flexibility to allocate capital across his companies.
There are already deep ties between SpaceX and xAI. SpaceX invested $2 billion into xAI last year, and xAI’s chatbot Grok powers customer support features for Starlink. If SpaceX succeeds in deploying space based data centers, investors expect xAI to become a major customer.
At a broader level, the shift reflects Musk’s long held belief that hardware is the ultimate competitive advantage. Software can be copied. Models can converge. But control over energy, chips, launch systems, and networks creates durable power. In that sense, the SpaceX IPO is less about Wall Street and more about locking in physical dominance in the AI era.
Looking ahead, SpaceX’s move toward public markets signals a transformation in its mission. The company is no longer focused only on Mars or launch contracts. It is positioning itself as foundational infrastructure for artificial intelligence at global scale. Whether that vision succeeds will depend on Starship, capital access, and how fast SpaceX can move before rivals catch up.
Source: The Wall Street Journal
