The A.I. War Heats Up With Elon’s Trojan Horse - May 23, 2026

Musk Lost His Recent Head-To-Head Battle With Sam Altman, But He’s Just Getting Started

You may have heard the recent news that Elon Musk lost his lawsuit against OpenAI and its co-founder Sam Altman, over the evolving corporate structure of OpenAI.  Elon didn't spend much time licking his wounds, as he fired his next salvo in the A.I. war… trying to bring A.I. to outer space.  

Space X, started by Musk in 2002 with $100M of his own money to launch rockets, spaceships and satellites into space, this past week filed an S-1 document with the SEC, signalling that it intends to raise capital with an IPO. In February of this year, Space X acquired xAI, another Elon company offering the “Grok” A.I. platforms. But before that, xAI merged with Twitter/X, the social media platform also owned by Musk, in March of 2025.  In research for this article I learned that Space X is also developing its own solar panels, as part of  its outer-space A.I. ambitions. Thus, under the umbrella of “Space X”, Elon now has an A.I. organization, a space equipment organization and a social media company. And that kluge of businesses is about to raise a lot of money in the public markets.  

X/Twitter ⇒xAI ⇒ Space X = “Space X”; therefore Space X = rockets, spaceships, satellites, A.I. tools, solar panels, and social media.  Clear as mud? It is to Elon, and there may be brilliance in this madness!

Elon Musk is attempting to solve two of A.I.’s major challenges - a shortage of energy to power the data centres, and a shortage of water to keep those data centres from overheating. Municipalities are already resisting having new data centres set up in their communities because they drain their electricity resources and their available water supply.  

So Elon’s theory is that if we can’t build any more data centres on the earth, we’ll build them in space, powering them with solar energy, and keeping them cool with outer space temperatures that are in the range of -160°C (-256°F) for objects orbiting the Earth.   That’s why Musk’s company, Space X, is raising a very large amount of capital, embarking on the largest initial public offering (IPO) in history. 

The company is targeting raising $75B in capital, that would set the valuation of SpaceX in excess of $1.75 trillion.  The prospectus claims a total addressable market for Space X of $28.5 trillion. That breaks down to $870 billion for Starlink broadband, $740 billion for Starlink mobile, $600 billion for digital advertising through X, $2.4 trillion for A.I. infrastructure, and a staggering $22.7 trillion from “Macrohard”, Space X’s partnership with Tesla to replicate all digital work with .A.I. These numbers are all hard to fathom. 

Space X’s S-1 document spells out the company’s mission, its financial picture and its planned use of proceeds.  Some of the mission statements are outlandish and more attune to a Musk manifesto, such as:

• “SpaceX aims to evolve X into an ‘Everything App’; integrating real-time information, communications, media, payments, banking, and commerce all within one consumer experience.”

• The prospectus claims xAI will "enable humanity to understand the universe"; a bold statement for what is currently a chatbot business losing billions per quarter.

However, there is no doubt Musk, through Space X, is tackling an ambitious plan that is potentially game-changing for society. A.I. is here, and is becoming more and more a part of our daily lives. Infrastructure for A.I. applications and data is a key part of delivering this technology evolution. So, even though Space X is supposed to be a "space" company, this IPO is raising money for Elon’s’ A.I. ambitions.

Elon’s track record of delivering what he said he would is mixed at best.  For example,  during Tesla's Q1 2026 earnings call, Musk confirmed that unsupervised Full Self-Driving (FSD) for consumer vehicles won't arrive until Q4 2026 at the earliest, pushing the timeline back yet again after years of missed deadlines. When asked directly, Musk replied: "I'm just guessing here, but probably in the fourth quarter”. This is the latest in a long pattern; Musk had previously promised full autonomy by 2018, a million robotaxis by 2020, and unsupervised FSD by June 2025, having achieved none of these goals.  

On the flipside, Starlink, the satellite and internet service division of Space X, has delivered solid growth in its revenue and subscriber base.  Analysts at Quilty Space project Starlink's revenue will climb to roughly $20 billion in 2026, accounting for approximately 79% of SpaceX's total revenue for the year. Monthly active users at Starlink have already surpassed 10 million and are projected to exceed 25 million by the end of 2026. That’s solid growth, and it’s the stuff investors and stock markets like.  

Elon is highly intelligent and a compelling story-teller.  He’s a serial entrepreneur who has generated wealth for many investors already. He’s led companies that tackle the most challenging endeavours (with Tesla he created the electric vehicle market; with Space X he is addressing space travel).  Add to that, he’s the world’s richest man, approaching a trillion dollars in personal net worth. So, even though he doesn’t always deliver on stated product milestones, he has earned enough credibility to get people’s attention with whatever endeavour he takes on.  That is what’s happening with this Space X IPO.  It’s an A.I. play dressed up as a space equipment company, with a social media company tagging along. 

The recently filed S-1 allows us to dive into the numbers behind this aggregation of businesses:

• SpaceX generated almost $19 billion in total revenue for 2025, a 33% year-over-year increase. The adjusted EBITDA for 2025 was $6.6 billion, or about 35%. These numbers by themselves make a good story for an IPO. However, Starlink, the satellite and internet access company,  accounted for 60% of total revenue of Space X. 

• Further analysis of the underlying numbers reveals the following:  

  • Starlink - 2025 Revenue - 11.4B; GM - 39%; capex - $4.2B

  • Space - 2025 Revenue - 4.1B; GM - -16%; capex - $3.8B

  • A.I. (xAI & X/Twitter) - 2025 Revenue - 3.2B; GM - -199%; capex - $12.7B. 

The combined “Space X” spent 61% of its capex on “A.I.”, while “A.I.” generated only 17% of the combined revenue for “Space X”, and served as a drag on the operating profit of the combined company. Herein lies the Trojan Horse aspect of this story if investors don't pay attention to these details. 

• As of March 31, 2026, Starlink served over 10 million subscribers across 164 countries, territories, and other markets, supported by approximately 9,600 broadband and mobile satellites in LEO (low-earth orbit); 75% of all active maneuverable satellites are Starlink satellites. 

• Starlink subscribers grew from 2.3M (2023) to 4.4M (2024) to 8.9M (2025) ; a 97% CAGR. Revenue grew almost 50% year-over-year to over $11 billion in 2025. These are great numbers in terms of market adoption.

• On $19B in sales, the combined company posted a net loss of $4.94 billion.  This was a sharp reversal from 2024, when SpaceX on a standalone basis posted an estimated $791M in profit.

• In 2025, capital expenditure at the combined company surged nearly fivefold, with almost $13 billion directed at A.I. initiatives, exceeding spending on core space and satellite operations.

• For X specifically:

  • Advertising revenue declined by $100 million in the first quarter of 2026. 

  • For full year 2025, ad revenue grew by only $115 million after plummeting by $595 million in 2024.

• Between X and xAI's Grok assistant, subscription revenue increased by $365 million in 2025 and another $177 million in Q1 2026. 

  
  

This Space X play is essentially asking investors to bet on Musk's ability to turn an extraordinary rocket and satellite business into a multi-trillion dollar A.I. and space empire, while accepting there is a social media company along for the ride, and they'll have virtually no say in how he does it.  According to the S1 document:

• Musk controls 85% of shareholder votes, which makes it all but impossible to fire him. 

• Public investors and funds will own almost 60% of shares but get almost no voting power, and Musk is free to name a board dominated by insiders.

Source - Fast Company

As SpaceX embarks on its pre-IPO roadshow to court investors, Elon Musk will need to make the case for the variety of businesses he has folded into SpaceX,  including a social media platform that is losing ad revenue (X/Twitter), alongside a "truth-seeking" chatbot (xAI) the prospectus claims will "enable humanity to understand the universe." X  and xAI are part of the SpaceX IPO story whether investors like it or not.  They are business operations that add complexity, with some subscription revenue upside, but also significant advertising headwinds that potential investors will need to weigh.  Space X is not a simple story and  it’s not a space company. It’s an A.I. company with other allegedly complimentary activities.