Gulf investors secured substantial paper gains following the record-breaking initial public offering of Elon Musk’s SpaceX, with an estimated valuation of $2.1T.
The $75B flotation commenced trading on Friday, opening at $150, representing an 11% increase over the IPO price of $135. Shares closed at $160.95 end of trading.
The initial share performance will serve as a critical test for market confidence in companies linked to artificial intelligence at such extraordinary valuations.
SpaceX IPO Breakdown
Order volume for SpaceX shares surpassed $250B, driven by Arab sovereign wealth funds, family offices, and asset managers eager to secure a stake before the offering.
Individual investors accounted for an impressive portion, placing orders exceeding $100B, as reported by a financial publication.
Musk becomes the first trillionaire with the IPO, solidifying his position as the wealthiest man in the world.
SpaceX Control of xAI & Use of Starlink
SpaceX is aiming to build the “AI1” satellite constellation designed to put massive AI computing racks directly into space, utilising xAI and Starlink.
SpaceX acquired xAI, combining AI and space engineering to streamline aerospace technology into substantial productivity gains.
AI satellites will host large-scale compute infrastructure in the vacuum of space, relying on solar power and advanced thermal radiators to manage extreme computing loads in orbit.Â
GCC SWF Investments
Gulf state investors include Saudi Arabia’s Public Investment Fund and the Kuwait Investment Authority, both of which placed orders between $1 billion and $5 billion.
The Qatar Investment Authority, with assets totalling $580 billion, also indicated a significant investment.
Shares of Saudi Arabia’s Kingdom Holding Company under Prince Alaweed climbed to a decade high, highlighting the anticipated returns of AI-generated productivity gains from SpaceX alongside Musk’s other ventures including xAI and Tesla.
Kingdom Holding Stake Soars
Saudi Arabia’s Kingdom Holding Co. said the value of its stake in SpaceX has risen to about $6.83B following the aerospace and technology company’s debut on the Nasdaq stock exchange.Â
The investment firm, controlled by Prince Alwaleed bin Talal, said in a filing to the Saudi Exchange that SpaceX completed its initial public offering on 12 June at $135 per share and ended its first trading day at $160.95.Â
The Saudi PIF invested $3B in xAI earlier this year. Observers note that the SpaceX IPO could yield significant financial returns for Gulf sovereign funds and family offices, diversifying their interests in AI, data centres, and digital infrastructure.
Origins: SpaceX IPO Valuation
SpaceX reported severe losses in FY25 yet investors remain bullish on the returns by 2030.
The firm’s valuation is predicated on future AI infrastructure developments in space and ambitious plans for the human colonisation of Mars, unlocking both productivity gains and new tech revenue avenues for GCC SWFs and investors.
The significance of the IPO extends beyond SpaceX as it could set a new benchmark for major IPO offerings in leading AI firms: namely OpenAI and Anthropic.
SpaceX will attract further demand from passive investment funds although voting control will predominantly remain with Musk, curbing outside shareholder influence on the direction of the firm.
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