Days after Elon Musk was found guilty of misleading investors prior to his takeover of Twitter in 2022,
the world's richest man is reportedly instructing the banks backing the potential SpaceX IPO
to invest in his AI company's Grok chatbot and advertise on his social media platform X.
According to The New York Times, which spoke with four unnamed sources familiar with the
matter, some of the banks behind the IPO have already agreed to spend tens of millions of dollars on Grok subscriptions and services, while even integrating the chatbot into their IT systems.
SpaceX -- which acquired both xAI and X in February, forming a $1 trillion
ecosystem dedicated to building AI infrastructure -- is expected to lead the largest initial public offering in history, with an evaluation as high as $1.75 trillion.
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As a result, the IPO
could raise over $50 billion for SpaceX, generating over $500 million for the banks committed to investing in the deal, which may include Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase,
Morgan Stanley, as well as law firms Gibson Dunn and Davis Polk.
Therefore, Musk is reportedly making demands that would benefit two initiatives that have faced both regulatory hurdles and
financial pitfalls: xAI's Grok chatbot, which is currently facing multiple legal
investigations due to the alleged unlawful processing of personal data and harmful sexualized content generation; and X, a social platform that has struggled since Musk's Twitter takeover four
years prior.
In addition to demanding banks' investment in Grok, The New York Times also reports that Musk has asked IPO investors to advertise on X “but was less adamant about
that request.”
To boost the popularity of Grok and compete with AI giants like OpenAI, Meta, Google, and Anthropic, Musk has posted consistently about the SpaceX-owned chatbot on X. Last
month, X also began experimenting with a new ad product on the social platform by testing promotions for SpaceX's highly profitable Starlink internet service directly in X posts.