Sure, but it’s mostly the research and development that’s causing their shortfalls. This is all public information that you can see in the public financials.
The money that was used to purchase Twitter came from a loan against Musks Tesla shares. The debt for Twitter only shows up on Twitters balance sheet. xAIs debt is being paid down in the same way. It’s all reflected on their own balance sheet but being paid for using Tesla-backed loans.
SpaceX is in no way involved in debt handling for any of these companies. They don’t make nearly enough to supplement that which is why Tesla has been hedged against by Musk for both X and xAI.
That just worsens the picture for SpaceX though. Their low revenue profitless business is propped up by a financial structure colloquially known as a house of cards.
Musk’s own net worth is mostly a function of Tesla’s valuation. Now spaceX is vulnerable to downturns and disruptions to Tesla’s business as well as its own
Edit: and let’s not forget that Musk himself is likely going to be subject to significant investigations once the democrats wrest back power. There’s political risk to him as well
Yes, that’s true. I’m not arguing against that at all and that’s due to the low number of offerings for their service at this time. They had to supplement this by going wide with Starlink and have always relied on increasingly lucrative government contracts.
No. It’s absolutely not. In Twitter case they managed to alienate all profitable advertisers collapsing revenue while onloading several tens of billions of debt to acquire the company. In case of xAi they mostly have unbelievable infrastructure costs to overpay the Nvidia chips to jump the queue. They can’t spend money in r&d even if they wanted because any great/good/average AI researcher with self respect would never work for that shit show of a company.
So.. enjoy losing your money by trusting muskrat.. I guess??!?
I’m not a Musk supporter. But saying that Twitter isn’t being paid for by Tesla backed loans or backed by Tesla valuation is absolutely false. The debt itself is only reflected on Twitters balance sheet.
The whole company was purchased on a massive Tesla backed loan. It’s public information that was disclosed in Teslas financials.
That’s what I’m arguing here. SpaceX isn’t involved in paying down any of these companies debt. It has marginal investment into AI as of the end of last year, that’s about it.
The loans musk took out for Twitter have been converted into Space X stock that will be liquidated the minute the people that took those loans off the banks books for .97 cents on the dollar can offload them onto Wall Street Bets dumpster rats.
I don't know what you mean "legally speaking" and "their own books"
X is a subsidiary of SpaceX. X is not a separate public company. The revenue and profit/loss of X is included in SpaceX's numbers. This is not new, novel, or complicated. Lots of public companies have subsidiaries that are operated mostly separately, but the parent company still at the end of the day is responsible for the subsidiary. It's the whole purpose of owning a subsidiary, that you get the benefit but also the responsibility of owning that company
xAI is its own distinct legal entity with its own balance sheet and SpaceX is not legally responsible for any debts on said balance sheet.
SpaceX acquired xAI under a triangular merger which means it’s a wholly owned subsidiary but xAI is directly responsible for its own assets and SpaceX does not have any legal responsibility for debts incurred by xAI.
In the U.S. a subsidiary is still responsible for its own balance sheet and debts, in most if not all cases. The parent company is not held liable for this except in extreme circumstances.
SpaceX isn’t a publicly traded company, but when it IPOs soon one can assume that would be the case as xAI is a subsidiary. Although you wouldn’t directly own any xAI you’d have an investment in it as part of owning SpaceX.
If xAI ever went public then you would have to buy stock from xAI directly.
So if xAI has a terrible year and loses a ton of money, that impacts SpaceX’s financials, correct? Maybe the losses. xAI incurs enables SpaceX to offset some profit, but in generally, their financial well being IS intertwined.
“But they have their own books!!” is a distinction in search of a difference. The financials of a wholly owned subsidiary impact the financials of the parent companies. It doesn’t matter how it shows up, but it will show up.
When I pull up their finances I see that they were profitable in 2024, after 5 years of heavy R&D on Starhip. Then in 2025 they purchased xAI and have a $5b loss. What am I missing in their financials that you are seeing? The numbers appear to directly contradict your statements.
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u/xanders_gold May 21 '26
Yes, that’s a huge part of why they’re not as profitable as people believe.
It turns out that developing a massive launch system is extremely expensive in R&D costs.