Gulf likely to be all in on SpaceX IPO
- Targeting $1.75trn valuation
- Gulf already heavily invested in Musk
- SpaceX’s potential and Gulf’s goals ‘aligned’
The size and breadth of the forthcoming listing of Elon Musk’s SpaceX make it an irresistible play for Gulf sovereign wealth funds and other regional investors, analysts told AGBI.
The company, which is targeting a $1.75 trillion valuation, encompasses Musk’s rocket and satellite programmes as well as his artificial intelligence endeavours after SpaceX merged with xAI in early February.
“I think everyone is going to want to get in on this,” said Natasha Ahmed, a Washington-based managing director of investment network Cosmic Funds and senior adviser at Trends, a risk consultancy focused on US-Middle East relationships.
SpaceX filed for an initial public offering in the US earlier this month, planning a June roadshow, $75 billion in fundraising and a valuation that surpasses Saudi Aramco’s previous record-setter in 2019, Reuters reported.
Gulf stakeholders are already embedded in Elon Musk’s advanced-technology empire, spanning satellite communication company Starlink and AI chatbot Grok, among other ventures.
Humain, the artificial intelligence startup of the Saudi Public Investment Fund (PIF), put $3 billion in xAI during a January Series E funding round, shortly before the merger with SpaceX.
The startup said the deal made it a “significant” minority shareholder in xAI, and that its holdings subsequently converted into SpaceX shares.
Humain and xAI joined up during Saudi Crown Prince Mohammed bin Salman’s visit to Washington in November to develop 500 megawatts of data centres in the kingdom, and launch Grok models there.
PIF is now in talks to make an additional $5 billion “anchor” investment in the SpaceX IPO, Reuters reported in early April. Anchor investments by institutional players are seen as helping to boost confidence in a new floatation.
“Saudi Arabia wants to double down on the work it is doing with xAI… and will really consider being an anchor investor because it already holds so many shares and it’s going to get in at the pre-IPO price,” said Ahmed.
“If the valuation drives up, it’s a smart financial decision.”
Saudi-based Kingdom Holding, the Qatar Investment Authority and the Oman Investment Authority also invested in xAI during a Series C round in December 2024.
Abu Dhabi-listed International Holding Company and Alpha Dhabi Holding put $25 million each into SpaceX in June 2022.
MGX, the UAE’s advanced technology investor, also participated in xAI’s latest funding round from January.
“The Emiratis definitely have a place in this, because they want access to the cloud, they want access to space comms, they want access to orbital data centres,” Ahmed said.
In its IPO filing, SpaceX said it intends to use the money to launch upwards of 1 million data centres bearing satellites to increase compute power away from the resource and regulatory constraints on earth, according to Reuters.
Anna Hazlett, founder and CEO of UAE investment and advisory company AzurX, pointed to significant alignment between SpaceX’s capabilities and what the Gulf is trying to achieve.
“The rollout of Starlink, for example, is particularly relevant – connectivity, resilience and digital infrastructure are all key themes across the Gulf, and low Earth orbit constellations are increasingly seen as foundational to that.”
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Gulf states, especially the UAE, are determined to build “industrial depth” in the space industry by investing across its value chain and partnering with “leading global players,” Hazlett added.
“Participation in a SpaceX IPO would be a natural extension of broader regional ambitions, both from a financial and strategic standpoint.”
Analysts agreed the Iran conflict will only bolster Gulf states’ focus on space and its dual-use, defence applications, even if the costs they incurred from Iranian attacks put the brakes on other, shorter-term and less strategic plays.
“It is a balancing act,” said Ahmed. “So if you were to make a bet on anything, I would save my money on the earlier-stage stuff right now and say, what can we get access to? What’s working?”
Ultimately, SpaceX’s oversized listing may “suck up” a lot of the money and take away from domestic growth companies, Ahmed added.
“I think they’re going to have to find a way to work with SpaceX,” she said.
