Banks chasing SpaceX's IPO were told by Elon Musk to buy Grok subscriptions

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Rumor mill: SpaceX's upcoming initial public offering is already reshaping expectations on Wall Street - and not just because of its size. Elon Musk, whose companies have often blurred the boundaries between business innovation and personal brand, has extended his influence far beyond rocket launches and satellites by tying SpaceX's bankers to his growing artificial intelligence venture.

Four people familiar with the matter told The New York Times that Musk is requiring banks, law firms, auditors, and other advisers on the IPO to buy subscriptions to Grok. Some of the banks have agreed to spend tens of millions of dollars on the AI and have begun integrating it into their IT systems, three of the people said.

These conditions come as Wall Street competes aggressively for a role in what some forecasts say could be one of the largest offerings in history - one that could raise more than $50 billion and value SpaceX at more than $1 trillion.

Musk and a SpaceX spokesman did not respond to requests for comment.

The unconventional requirement underscores Musk's ability to use one venture to drive commercial momentum for another. After years of muted activity in the public markets, the prospect of taking SpaceX public has triggered intense competition among investment banks eager to secure the lucrative deal.

The offering could reportedly generate advisory fees exceeding $500 million. It also gives Musk an opportunity to position Grok - still trailing rivals such as OpenAI's ChatGPT, Anthropic's Claude, and Google's Gemini - as a high-profile enterprise product.

People familiar with the arrangements said the Grok subscriptions were not optional gestures of goodwill. Musk insisted they be purchased. He also encouraged the banks to advertise on X, his social media platform, although that request carried less weight, according to two of those people.

Five banks are currently expected to participate - Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley - along with law firms Gibson Dunn and Davis Polk. SpaceX has filed confidential IPO documents with the US Securities and Exchange Commission, but left the names of these advisers off the paperwork, one person said. Negotiations continue over which bank will take the lead, a role offering both prestige and the largest share of fees.

The deal follows SpaceX's February merger with xAI. In previous investor filings, xAI reported about $1 billion in annual revenue from its artificial intelligence operations, according to a person who reviewed the financials, although it did not detail how much came from consumer subscriptions versus enterprise clients.

The new contracts with banks give Grok a more visible enterprise presence and could add financial weight to SpaceX's broader technology portfolio.

Despite recurring controversy, Musk has remained an outspoken supporter of Grok, often portraying it as a "non-woke" alternative to other chatbots. The system has drawn regulatory scrutiny after sharing antisemitic content, praising Adolf Hitler, and producing nonconsensual sexualized images of women and girls.

Indonesia and Malaysia have banned its use, while several European governments have launched investigations into its dissemination of explicit material. "Grok & xAI are definitely improving faster than any other AI," Musk wrote when reposting a recent message on X. On Friday, he posted 18 times promoting the chatbot's latest software update.

SpaceX's dominant Starlink division continues to serve as the engine of its profitability, generating billions in free cash flow. Financial documents reviewed by The New York Times show Starlink reported roughly $8 billion in revenue in 2024. The robust position of SpaceX's core business - now combined with Musk's AI ambitions - is likely to draw intense attention to its IPO not only on Wall Street but also across the technology sector.