In a rare moment of public restraint, Elon Musk admits his AI company may not yet be the best — then invokes the near-collapse of SpaceX to explain why he thinks that hardly matters.
.jpg "Musk Defends xAI as the Clock Ticks to the Biggest IPO in History") |
| “I will never give up. Never.” Musk invokes SpaceX’s near-collapse to defend xAI as investors prepare for one of the biggest IPOs ever attempted. |
On a Tuesday in late May, while Wall Street was still dissecting the filings behind what could become the highest-valued IPO in history, Elon Musk was doing something he rarely does in public: acknowledging uncertainty.
The exchange began when futurist and entrepreneur Peter H. Diamandis posted an observation on X that cut directly into the economics of the AI race.
“Elon doesn't need to run the best AI model,” Diamandis wrote. “He needs to control the best hardware. Nvidia is the most valuable company on Earth and their models aren't the most popular. The hyperscaler play works.”
The post functioned as both endorsement and warning: in modern AI, infrastructure may matter more than software elegance. Then Musk replied — and, unusually, did not claim outright dominance.
“What you say is true, but nonetheless our AI will be great. Whether it is the best remains to be seen, but I will never give up. Never. Space(XAI) is only 3 years old. That's half the age of Anthropic and quarter the age of OpenAI. Let's see where things stand 3 years from now.”
Moments later, Musk followed with a second post reaching back to SpaceX’s darkest days:
“SpaceX had achieved nothing of note after 3 years and was written off as dead after 6 years with 3 consecutive launch failures. But you may have noticed that things are different now.”
The timing matters.
Just days earlier, SpaceX filed paperwork for a public offering reportedly targeting a valuation near $1.75 trillion, according to multiple financial reports. If achieved, it would eclipse previous IPO valuation records and instantly become one of the largest public debuts ever attempted.
And buried inside that filing was another major detail: xAI, Musk’s artificial-intelligence venture founded in 2023, had been folded into the broader SpaceX structure earlier this year.
According to the S-1 filing, the combined company described its strategy as building “integrated infrastructure across launch, compute, communications, and artificial intelligence.” The filing also disclosed that xAI generated roughly $2.1 billion in annualized revenue last quarter while continuing to post significant operating losses tied to aggressive compute expansion.
The hardware thesis that stings
Diamandis’ argument lands because it reflects a growing consensus in Silicon Valley: the AI race increasingly looks like a battle over energy, chips, and data-center scale.
Jensen Huang built Nvidia into the world’s most valuable semiconductor company not by creating a chatbot, but by supplying the hardware backbone powering nearly every major AI model on earth.
That logic cuts directly into xAI’s positioning.
While Grok has improved rapidly, benchmark leadership still largely belongs to rivals like OpenAI, Anthropic, and Google’s Gemini models. What Musk does possess is infrastructure: the Colossus supercomputer project in Memphis, access to SpaceX launch systems, and the distribution power of X itself.
Some analysts believe those assets could eventually support more ambitious computing architectures — including space-based infrastructure experiments that, until recently, sounded entirely theoretical. But for now, much of that remains speculative rather than operational reality.
“Whether it is the best remains to be seen, but I will never give up. Never.”
— Elon Musk, on X
What Musk actually conceded
Read carefully, and Musk’s first reply contains a subtle but notable shift in tone.
He did not say Grok would become the world’s best AI model. He said it “will be great,” then immediately added that “whether it is the best remains to be seen.”
For a founder whose public persona is built on certainty, that counts as restraint.
But he pivoted quickly to the story he trusts most: SpaceX itself.
The comparison is not accidental. SpaceX was founded in 2002, nearly collapsed after three consecutive Falcon 1 launch failures, and survived largely because a fourth launch finally succeeded in 2008. Today the company dominates commercial launch markets and routinely lands reusable orbital boosters — something much of the aerospace industry once dismissed as fantasy.
The message Musk is selling now is straightforward: judge xAI by trajectory, not current rankings.
IPO shadow over every word
None of these posts exist in isolation from the looming IPO.
As Reuters and other outlets have noted, institutional investors are closely scrutinizing the combined SpaceX-xAI structure, particularly the extent to which AI ambitions are already embedded into the company’s valuation.
That has led some analysts to question whether the market may be pricing in future technological dominance long before the underlying economics are proven.
“Investors are effectively being asked to underwrite several moonshots simultaneously,” said Dan Ives, managing director at Wedbush Securities, in a note discussing the filing. “The story is compelling, but execution risk remains enormous.”
That tension hangs over nearly every Musk statement right now. His posts are no longer read merely as social-media commentary; they are parsed as signals about leadership confidence, competitive positioning, and long-term strategy.
Three years, compared
The age argument is one Musk will likely continue emphasizing.
xAI launched in 2023, making it substantially younger than both OpenAI and Anthropic. Those rivals have had years more to recruit researchers, refine products, and build enterprise ecosystems.
But unlike most startups, xAI entered the market with unusual structural advantages: direct integration with X, access to SpaceX infrastructure, and a founder capable of raising capital at extraordinary scale.
The asymmetry cuts both ways. xAI may be younger than its rivals, but it is not operating like a conventional startup.
The SpaceX parable — and its limits
The SpaceX comparison remains compelling, though imperfect.
Rocket engineering has clear success metrics: a launch either succeeds or fails. Artificial intelligence is far murkier. Benchmark leadership shifts constantly, consumer preferences change overnight, and public perception can matter almost as much as technical performance.
Still, Musk’s broader point is difficult to dismiss outright. SpaceX was once widely viewed as an overhyped long shot. Today it is one of the most consequential private companies in the world.
The question now is whether xAI can follow the same arc — or whether the AI race moves too fast for patience to matter.
Musk’s answer, delivered in two posts on a Tuesday afternoon, was unmistakable: he knows he is behind some rivals today. He is betting that won’t matter in the long run.
Whether investors believe that thesis may determine the fate of a $1.75 trillion IPO.