SpaceX’s $1.75 Trillion Gamble

“Only when the tide goes out do you discover who’s been swimming naked.”

— Warren Buffett

You’ve probably heard of SpaceX—the company launching rockets, sending astronauts to space, and running the Starlink satellite internet service. Now, it’s a public company. That means one can buy shares in SpaceX just like one buys shares in Apple or Amazon. But here’s the weird part: SpaceX didn’t apply to be listed as a spacecraft company. In its official paperwork, it called itself an AI services and infrastructure company. Why would a rocket builder do that? Because the stock market is obsessed with artificial intelligence. By slapping an AI label on itself, SpaceX attracted way more investors and demanded a much higher price. It was a clever trick—but also a dangerous one.

Initial Public Offering

Let’s break down some basics. An IPO (initial public offering) happens when a private company sells its shares to the general public for the first time. Until recently, SpaceX stayed private, owned only by big investors, employees, and other investors. When a company goes public, only a small portion of its total shares usually hit the market. That small portion is the “free float.” Imagine a pizza with 100 slices. If the company listed only four slices for public trading, the free float was 4%. The other 96 slices stayed with founders, early investors, and employees. Why does free float matter? Because when very few shares are available to trade, even a small amount of buying or selling swings the price wildly. That makes the stock risky for everyday people. Most stock market indexes, like the S&P 500, require a free float of at least 10% before they include a company. SpaceX is listed with a free float of only 4%—extremely low and a clear warning sign.

The Quiet Rule Change

Normally, a new public company has to wait at least 12 months before joining a major index like the S&P 500 or the Nasdaq-100. That waiting period protects investors—it gives the market time to figure out the company’s real value before retirement funds are forced to buy it. But as SpaceX prepared to go public, the Nasdaq exchange quietly changed its own rules. Now, a company can join the Nasdaq-100 in just 15 days, not three months. And they can join even with a free float below 10%. That meant billions of dollars from index funds were forced to buy SpaceX shares almost immediately after the IPO. Those funds include many people’s retirement savings. In the U.S., a common retirement account is a 401(k)—think of it as a workplace pension plan. American workers put part of their paycheck into a 401(k), and that money often goes into index funds that track the Nasdaq. So when Nasdaq changed its rules, it forced millions of ordinary workers to buy SpaceX shares—whether those shares were a good deal or not.

The Real Financial Picture

Now let’s look at SpaceX’s actual financial health, not the hype. In 2025, SpaceX reported a net loss of nearly $5 billion US dollars. That means it spent about $5 billion more than it earned. Just one year earlier, the company was profitable—so this was a huge reversal. The only part of SpaceX that makes solid money is Starlink, the satellite internet service. But most of Starlink’s profit goes into a separate AI project called Grok, a chatbot that’s losing billions. So why did the IPO value the company at an unbelievable $1.75 trillion? That’s more than the entire economy of countries like Australia or Spain. The valuation rested almost entirely on AI hype, not on the real rocket business.

The Political Payback

Here’s where the story gets uncomfortable. During the 2024 US presidential election, Elon Musk spent roughly $300 million supporting Donald Trump’s campaign. After Trump won, the new administration handed SpaceX a massive government contract worth $4.16 billion from the US Space Force. In fact, government contracts now make up about 20% of its total revenue—a huge boost just before the IPO. But more directly, at least ten senior officials from Trump’s administration got to buy SpaceX shares at a low, private price before the public could. According to financial records, their holdings range from roughly $10 million to over $40 million each. The names include Donald Trump Jr. and others close to the president. When the IPO happened, those shares jumped in price. Those officials then sold and walked away with millions in profit. Many critics call this a pay‑to‑play deal: Musk helped Trump win, and in return, Trump’s team cashed in on the SpaceX IPO.

Connecting the Dots

Let’s put it all together. SpaceX renamed itself an AI company to ride the AI bubble—even though its AI division is losing money. Stock market rules changed to force index funds and retirement accounts to buy SpaceX shares almost immediately. The company has a tiny free float of only 4%, which makes the stock price unstable. And the whole IPO looks like a reward to political insiders who helped Trump win. For ordinary investors—especially people with retirement savings—this is a trap.

Why SpaceX Is Only the First

SpaceX is just the opening act. OpenAI, Anthropic, and other money‑losing AI darlings now line up to follow the same playbook. They rebrand slightly, list with a microscopic free float, and benefit from the same Nasdaq rule changes. The goal: force index funds and 401(k)s to buy their shares before any real profitability exists. This isn’t accidental. The AI bubble holds up the entire U.S. stock market—tech giants like Nvidia, Microsoft, and Google tie their valuations directly to AI hype. If the bubble pops, the American economy crashes with it. So regulators and exchange operators quietly rewrite the rules to pump new AI companies into retirement funds, injecting fresh money into the bubble. They keep it inflated just a little longer. SpaceX tested the model. OpenAI perfects it. And ordinary workers pay the price when the whole thing finally deflates.

The Aftermath

SpaceX builds amazing rockets. But this IPO wasn’t about space travel. It was about using AI hype, changed rules, and political favours to make a small group of people very rich—at the risk of everyone else’s savings. Whether you live in Abuja, London, Tokyo, or Sydney, keep your eyes open. What happens on Wall Street never stays on Wall Street.

UPDATE NEWS:

Nigerians can now invest ₦2.5 million on premium domains and profit about ₦17-₦25 million. All earnings paid in US Dollars. Rather than wonder, click here to find out how it works.