\n<\/p>\n
Elon Musk is now the world\u2019s first trillionaire. SpaceX\u2019s historic debut on the stock market on Friday launched the CEO to unprecedented levels of wealth; his personal fortune now amounts to $1.1tn, an increase of more than $62bn since the previous day, according to Forbes.<\/p>\n
The rocket, satellite and AI company raised $75bn from its record-breaking initial public offering (IPO), and is now valued at $2.1tn after its first day of public trading.<\/p>\n
Musk was already the world\u2019s wealthiest person. In the days before SpaceX officially went public, his net worth hit $782bn, dropping by $50bn in one month due to a decline in Tesla\u2019s share price, according to Forbes. However, the figure represents a huge leap from a decade ago, when the tech executive\u2019s net worth hovered around $14bn \u2013 and an even bigger jump compared with 15 years earlier, when he was worth just $680m, according to Forbes.<\/p>\n
It can be hard to conceptualize such exorbitant wealth. To drive home just how much money $1.1tn is: only about 21 countries\u2019 yearly economic output exceeds $1tn. Even Musk\u2019s birthplace isn\u2019t part of that elite club; South Africa\u2019s output of goods and service is closer to $480bn. A trillion dollars is enough to buy 243bn gallons of gasoline. (That\u2019s more than the nearly 137bn gallons Americans used last year.)<\/p>\n
SpaceX share value throughout the day<\/p>\n
SpaceX\u2019s stock soared after its debut. At market close, at 4pm ET, its share price was $161, up 19% from its initial price of $135 per share. SpaceX had opened at $150 a share before peaking at $176 at midday.<\/p>\n
The vast majority of Musk\u2019s money is tied up in stocks and equity, and isn\u2019t available as cash he can quickly spend. His portfolio of companies includes Tesla, the electric car maker, and xAI, the AI startup that was folded into SpaceX earlier this year.<\/p>\n
Musk\u2019s fortune is unprecedented, not just for its size but the speed at which it grew.<\/p>\n
\u201cIf you look at a graph, it looks like a hockey stick. It\u2019s only in 2020 that his personal net worth truly went bonkers,\u201d says Quinn Slobodian, a history professor at Boston University and the author of Muskism: A Guide for the Perplexed. Around 2020 was when Musk first became the world\u2019s wealthiest person and Tesla the world\u2019s most valuable car company.<\/p>\n
\u201cMusk has a proven track record in creating sectors out of nothing,\u201d Slobodian says. There\u2019s a sense to \u201cnever bet against Elon \u2013 he\u2019ll always make you money\u201d, he adds.<\/p>\n
A few months before SpaceX\u2019s stock market debut, Musk wrapped his AI startup, xAI, into SpaceX in a record-breaking deal. SpaceX has proposed launching up to 1m datacenters into space, as part of its ultimate goal of establishing colonies on the moon and Mars.<\/p>\n
This lean into AI is what\u2019s allowed Musk to claim such high valuation for SpaceX \u2013 because many investors now believe \u201cAI is such a once-in-a-millennium opportunity that it merits these extravagant expectations\u201d, says Mihir Desai, a professor at Harvard Business School. Desai says the space business alone wouldn\u2019t have generated such excitement.<\/p>\n
SpaceX is running up billions of dollars in losses, and its prospectus warns it may never become profitable. Many great businesses start off losing money but \u201cthe real question is how people come to believe that the future is so, so bright that those losses will not just turn into profits, but will turn into really massive profits\u201d, Desai says. \u201cThat\u2019s a story about not just SpaceX, but really about AI.\u201d<\/p>\n
Musk has won investor confidence through the stratospheric success of his previous endeavors, which faced serious doubts. (A $10,000 investment in Tesla on the day of its IPO, in 2010, would be worth more than $2m this year.)<\/p>\n
Chart of the largest IPOs by capital raised<\/p>\n
Desai describes Musk\u2019s most loyal investors as belonging to a \u201cfinancial cult\u201d \u2013 and argues they believe he is \u201cso damn brilliant that he\u2019ll make it work even if the current product is crap and he has to spend a lot to get there\u201d.<\/p>\n
The AI portion of SpaceX lost $6.4bn last year \u2013 in part due to the cost of higher computing expenses for building and operating AI models. But investors may fear missing out more than they fear losses: \u201cYou don\u2019t want to sit on the sidelines. And so even if you think it\u2019s crazy, you have to play,\u201d Desai says.<\/p>\n
Musk is also able to consolidate his wealth through his continuing influence. He is not selling any of his shares in the SpaceX offering and will retain more than 82% of the company\u2019s voting shares. That means it will be almost impossible to unseat him from the company, and he will be relatively insulated from shareholder pressure.<\/p>\n
SpaceX\u2019s IPO comes amid recent announcements by OpenAI and Anthropic that they are going public, although it\u2019s unclear when exactly they will do so. All three companies\u2019 fates are tied up with AI.<\/p>\n
If the AI gamble doesn\u2019t work out, \u201cpeople are going to start to get cold feet and withdraw their investments\u201d, Slobodian says. \u201cThis is not an ironclad fortune. We may see the world\u2019s first trillionaire be the world\u2019s first former trillionaire in a pretty short duration.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
Elon Musk is now the world\u2019s first trillionaire. SpaceX\u2019s historic debut on the stock market on Friday launched the CEO to unprecedented levels of wealth; his personal fortune now amounts to $1.1tn, an increase of more than $62bn since the previous day, according to Forbes. The rocket, satellite and AI company raised $75bn from its<\/p>\n","protected":false},"author":1,"featured_media":50340,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[3269,91,306,2062,1371,93,5965],"class_list":{"0":"post-50339","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-debut","9":"tag-elon","10":"tag-market","11":"tag-money","12":"tag-musk","13":"tag-spacexs","14":"tag-stock"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/50339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=50339"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/50339\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/50340"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=50339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=50339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=50339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}