Elon Musk is reportedly making Wall Street advisors pay for the privilege of working on SpaceX IPO, which may be one of the largest initial public offerings in history, schedule for later this year.
Citing four people with knowledge of the matter, The New York Times reports that Musk has demanded that the banks, law firms auditors and other advisers hoping to work on the deal to buy subscriptions to Grok, his artificial intelligence (AI) chatbot.
SpaceX IPO: What is at stake
The SpaceX IPO is expected to raise more than $50 billion at a valuation above $1 trillion, the report said, adding that it means the banks advising on the deal may collectively earn fees in excess of $500 million.
Five banks are expected to work on the offering: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley. Law firms Gibson Dunn and Davis Polk are also advising on the deal. The report comes a day after SpaceX is said to have confidentially filed IPO paperwork with the Securities and Exchange Commission this week. The names of the banks, though, were notably left off the filing. It remains unclear which bank, if any, will hold the coveted lead role.
The Grok ‘condition’ for The Wall Street firms
Three people familiar with the arrangements said that the subscription purchases are not optional goodwill gestures, and Musk insisted that advisers buy the Grok services. The report also pointed out that some banks have already agreed to spend tens of millions of dollars on subscriptions and have begun integrating Grok into their own IT systems.Musk reportedly also asked banks to advertise on X, social media platform owned by SpaceX, though he was ‘less forceful’ about that particular request.
SpaceX merged with Musk’s AI startup xAI in February, and Grok currently sits in a distant fourth place in the AI race — behind OpenAI’s ChatGPT, Anthropic’s Claude and Google’s Gemini.The chatbot generates revenue primarily from individual consumers, and this condition may give a boost in Grok’s enterprise division ahead of the IPO, which in turn may help paint a stronger revenue picture for prospective investors, the report noted.In its most recent financial report before the SpaceX merger, xAI reported approximately $1 billion in revenue from AI operations. SpaceX’s satellite internet service Starlink, on the other hand, generated approximately $8 billion in revenue in 2024 and producing billions in free cash flow.
