The Current - Why Elon Musk is taking SpaceX public

Episode Date: June 3, 2026

SpaceX is going public with a sky high valuation of over $1 trillion. Max Chafkin, a reporter with Bloomberg, and the co-host of the podcast “Everybody’s Business” breaks down what this could mean for the larger economy and for investors.

Imagine you've been charged with a crime, and the only witness pointing the finger at you isn't even human. I remember thinking, are you serious? What is this thing? It's something artificial, created by a mysterious Canadian. And it's coming for all of us. A life-defining technology. Crime as we know it will never be the same. I'm like, oh my God, he's lying.

From CBC's Uncover, The Expert Witness. Available now on CBC Listen or wherever you get your podcasts. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. Elon Musk's SpaceX is set to rocket into the record books next week when it goes public. It's the biggest IPO or initial public offering in history, and it could make Elon Musk the world's first trillionaire. And SpaceX isn't alone.

The artificial intelligence race is hitting the stock market as well. Open AI and Anthropic are also set to go public. Max Chaffkin is Bloomberg's reporter and a co-host of the podcast, Everybody's Business. Max, good morning. Hey, how's it going? It's going great. And it sounds like it's going great for Elon Musk. Put this SpaceX IPO into perspective for us.

How much is it expected to race? Well, you hit it. I mean, the scale here is staggering, much bigger than even the largest IPO in history. So they're talking about raising $75 billion for perspective. That's about double what the largest IPO ever was, which was the IPO of Saudi Aramco, the big oil company. We're talking about several times as big as the largest tech IPO. The valuation here, again, we don't know exactly what it will be because they are in the process of pitching it to to investors, but they're targeting $1.75 trillion, which would make it

one of the top 10 largest companies in the world. So enormous scale, especially considering that the revenues for this company are not huge. This is not, this is a company that looms large, I think in the imaginations of many. It is not a large company in terms of revenue. So why the hype? I mean, there's clearly people see promise, they see potential. but what's that based on? We have two things going on in terms of hype. And I think the most important one is just the sort of singular character of Elon Musk. This guy is a one-man hype machine.

I mean, for better or worse. And he is really, first of all, he has a very impressive track record. He is also the CEO, longtime CEO of Tesla Motors, which is another gigantic company that is also built on sort of, you know, tech hype to some extent. And he's done that. A lot, people have made a lot of money. He's also just a master at kind of crafting these tech narratives. He's seen as the guy who, you know, single-handedly popularized the electric car starting

in the early 2000s. He is seen as having, you know, revitalized the American Space Program with SpaceX. So this is a guy who commands an audience, but both an audience kind of on social media. He's the owner of the company formerly known as Twitter, has a lot of files, followers there, but also on Wall Street. He is, he is able to get both institutional investors, you know, hedge fund managers, fund managers, and so on, as well as just regular people to buy his stock. And so, so it's, it's those things. And then the final factor is AI, is, is that there is, we are, we are in a moment where there is just a ton of promise. People, many smart people anyway,

I feel there's a ton of promise with these AI companies. There's belief that, you know, although they're not very big right now, they're going to eventually unlock huge amounts of productivity and ultimately money. And there's an AI angle to SpaceX because Elon Musk, in addition to operating this rocket company that essentially put satellites into space, he also has an – this company has an AI division, XAI, which competes with OpenAI and Anthropic. So there's an AI angle. There's an Elon Musk angle. There's probably just a general.

generalized financial hype angle. Stock markets are near an all-time high now. Yeah, and I want to talk about OpenAI and Anthropic also heading to the stock market. But just one last point on Elon Musk that I'm curious about. You use the word single-handedly. I mean, he does sort of come across as that he is the maverick behind these companies. Why would he want to take his company public and have to answer to shareholders? Well, that is the thing. So I've covered this guy for a really long time, almost 20 years.

And if you talk to anybody who knows Elon Musk or and has known him for a long time, the thing that they will say is the thing he hates the most is running a public company. He went through, there was a whole like mini scandal eight years ago when he sort of joke, half joking, half serious, suggested that he was going to buy Tesla and take it private for 420, which was a marijuana. There was this whole complicated and sort of funny story where he almost took Tesla private. And the reason given at the time was that he didn't like running a public company, didn't like being responsive to shareholders. And I think there are two possibilities.

One is he needs the money. AI is really expensive. SpaceX is losing huge amounts of money, as are all of the AI developers. So he needs money. And the other thing is this is a really, really, really great time to take it, even if you maybe have some reservations about shareholder control. and because Elon Musk is Elon Musk, because he can essentially dictate terms to Wall Street, he is going to keep control even when he takes this company public. So SpaceX, like a handful of other Silicon Valley companies, has a dual-class stock structure.

Elon Musk is going to control this thing. He's not going to be responsible to shareholders or a board or anything like that. He's going to have 85% of the voting control. So he doesn't have to answer to shareholders, and he can raise dozens of billions of of dollars to fund these AI investments. And you think shareholders will be just fine with that? I think that many shareholders have reservations. And you look at statements coming out of pension funds and so on there, and shareholder rights

advocates and so on. There are people who are very unhappy here. And you can understand why. I mean, it's not just the voting thing. There are terms in this IPO around arbitration. It's going to be much, much harder for shareholders to bring class action lawsuits. against this company than any other company. You know, Elon Musk is going to get paid an absurd amount of money.

There are just a million ways where they are trampling over shareholders' rights. On the other hand, the fear is missing out. The fear is if I don't buy this stock, and now I'm talking about fund managers and so on, if I don't buy this stock, I'm going to miss out on the mammoth gains. I'm going to miss out on the next Tesla or so on. I think it's worth being somewhat skeptical of that fear, given where the stock market is right now, as I said, at all-time highs. I mean, there's no guarantee it's going to go up as much as it's gone up in the past. But I think that is kind of the thing that people are balancing, even if they're buying the stock.

They're holding their nose, but they also want it. Let's talk about the stock market, because we mentioned open AI and Anthropic are also set to go public. I mean, this is going to be a massive sort of bulge heading into the stock market. What effect do you think these IPOs will have on the stock market in the broader economy? I mean, there is just an absurd amount of money going into AI right now. You know, when you look at the gains of the major stock market indexes, a huge percentage. It's not just tech companies. It's actually like specifically AI stuff.

You also have, besides that kind of paper wealth and besides the revenue that these companies are pulling in, because companies like Google, you know, they're reporting record revenues and things like that. There's also all this building. So it's it's it's all of these companies that make you know switches for data centers, chip companies. You know, there was a report earlier this week that GoPro, the action camera maker is is is, is, was issuing warnings to its shareholders saying it could go out of business because memory chips have gotten so expensive. So there is just a huge amount of money that is flowing into this space. And it's tempting at a time like this.

to sit, you know, it has elements of a bubble, but it's not a bubble in the sense that, oh, it's just overhyped, because there's real money here. I mean, their companies are really spending money and, and so on. The question is how long does it last? And we've already seen reports of some companies saying, hey, we're not sure that, you know, we're spending tens of millions of dollars on Anthropic and Open AI. We're not sure we're getting that much back here. And that I think should be, that is the concern that at some point these tools have to like perform. Whether, whether perform means increased productivity, whether it means increased revenue, whether it means you're able to replace some percentage of your employees,

which would be very scary, you know, but, but some, they have to get some return. And, and that hasn't, it's not clear that that has happened in the way that it would need to happen to justify the evaluations that we're talking about besides um space x at 1.75 trillion probably another trillion dollars each for anthropic um and open a i so that's four trillion dollars in stock market wealth that is that is about to to come on to the market it's a huge amount of money but again it we're in this moment of of of instability where a lot of the economy is dependent on this stuff and and it could shift and so so it's it's a time of a lot of growth but also a time of a lot of risk well the New York, I was reading a business column in the New York Times. They called this a, quote,

dangerous moment for everyday investors because they said if you're expecting, you know, a quick short-term gain, you're not going to find it. So what's your view about that? That because of all those points, you've just enumerated. I think, yeah. Well, so one of the, I've heard people ask me like, oh, well, like, who should buy SpaceX and who should buy Anthropic? The answer is that you are going to buy it because anyone who has an index fund is, is going to own these things. And there are big changes. The major index makers are basically changing their rules as we speak

so that index funds will buy these newly launched mega-cap companies. In the past, there were rules that required companies to sort of operate for some period of time or turn a profit or whatever. And because there's a sense that these companies now loom so large in the economy, the index makers feel like it would be wrong for them to exclude it from their indexes. But the upshot is you're going to be invested in this. And the fact is you already are, because anyone who owns an index fund, which is many investors, index fund would be being like a broad bucket of stocks that includes the entire market,

owns a lot of this stock. You have already made a lot of money from this AI hype cycle. And I think that is what's dangerous. that already there's a ton of paper wealth here. You have a couple of Silicon Valley Titans trying to essentially take money off the table or take advantage of this moment. And no one really knows how long this will go on. I mean, you've got to remember back to the first dot-com bubble,

there were warnings for years before the bubble eventually burst. And so that's the other side of the coin. The other side of the coin is you don't want to miss out on the, on a on a on a on a on a world shaking world historical uh boom or something like that so so that is why it's a risky moment because because on one hand there's a lot of promise but also on on the other hand you know no one knows how long this lasts hey max what a time to be alive listen thanks for your time of your perspective really appreciate it my pleasure max chafkin is a bloomberg reporter and co-host of the podcast everybody's business he was in new york this has been the current

You can hear our show Monday to Friday on CBC Radio 1 at 8.30 a.m. at all time zones. You can also listen online at cbc.ca.ca slash the current or on the CBC Listen app or wherever you get your podcasts. My name is Matt Galloway. Thanks for listening. For more CBC podcasts, go to cBC.ca slash podcasts.