Trump's biggest donor scrambles to justify 'insane' stock market debut

In the run-up to SpaceX’s public offering next month, company head Elon Musk is making unusual business decisions that some say may be part of a frantic attempt to justify the IPO’s “insane” $2 trillion valuation. According to reporting by the tech publication Gizmodo, Musk appears to be preparing to shuffle a high-profile brand in and out of Starlink’s orbit as part of a wider effort to generate hype around his business.

The story dates back to May, when Musk announced he was teaming up with the AI company Anthropic — which he had previously called “evil” — saying he was leasing it the available computing power at SpaceX’s Colossus data center. At the time, it was suggested that the deal was part of a cash grab before the IPO, but now, Musk is suddenly implying that he may end the contract after 3 months rather than the 3 years it originally stipulated.

“SpaceX has not committed to leasing Colossus for years, although it’s possible that may be what happens,” said Musk on X, the social media platform he owns. “This is a 180 day lease with 90 day notice mutual cancellation thereafter.”

As Gizmodo notes, “That’s a mighty quick turnaround, given that Anthropic seemingly needs to scale up to meet its growing demand, while Musk is in dire need of revenue on his books as SpaceX heads toward an initial public offering. According to Musk, ‘The short term was our request, not Anthropic’s,’ which is interesting. Maybe he wants to treat the agreement as a proof of concept to show investors that renting the massive amount of compute that his company has built is a viable business model…Or maybe it’s an effort to generate hype and give people the impression SpaceX is going to need those chips back for some major in-house AI initiative.”

Musk himself implied as much, saying, “If compute gets super tight I said we might need it back at some point.”

But his claims are confusing in the context of the deal. As Gizmodo explains, “Musk’s accounting of the deal between SpaceX and Anthropic doesn’t quite match up with the way that it’s described in SpaceX’s S-1 filing with the Securities and Exchange Commission. According to that document, Anthropic ‘has agreed to pay us $1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee.’ The document does reflect the mutual 90-day termination clause. The text simply seems to suggest the deal is locked in for three years. “

This isn’t the only example of someone questioning the books on the SpaceX IPO. On Tuesday, prominent financial and tech analyst Ed Elson posted to X, “I read all 277 pages of SpaceX's IPO filing so you don't have to. Losses up 700 percent. Revenue decelerating. 107x price-to-sales multiple. It's a trainwreck.”

Much of the “unserious, empty, hallucinatory, and borderline dishonest” filing, said Elson, bordered on outright fantasy.

“After eighteen images of rockets in space, we learn that the company’s mission is ‘to extend the light of consciousness to the stars,’” Elson detailed. “To accomplish this, the company plans to advance humanity ‘to Kardashev Type II status,’ which is defined in the document as ‘a civilization that harnesses the full energy output of its local star.’ Only a few pages in and it’s already starting to feel like an ayahuasca trip.”

“Once you arrive at the financials,” he said, “you start to realize what the language is overcompensating for: awful numbers… I’ll put it simply: slowing revenue + skyrocketing expenses = not good.”

Other experts have warned that the SpaceX IPO appears to be structured to favor Musk “at the expense of other shareholders,” and leading stock analysts forecast the offering will likely result in "volatile" performance and “negative returns.”

Musk donated at least $288 million to elect President Donald Trump, and has faced accusations that his appointment as a “special government employee” at the head of DOGE allowed him to act with conflicts of interest, promoting SpaceX’s government contracts and diminishing those of competitors.

Musk stepped down from his role at DOGE in May last year and has since been primarily focused on his various business entities. Now, according to Gizmodo, SpaceX “has seemingly been acting in a whirlwind fashion to secure as many agreements as it possibly can ahead of going public, likely in an effort to show that it can justify what is expected to be the largest initial public offering in history.”