Some of the banks have agreed to spend tens of millions on the chatbot, and they have already started integrating Grok into their IT systems

It's not uncommon for large companies doing big deals to make demands of their bankers and lawyers. But Elon Musk has made a particularly bold demand of his Wall Street advisers ahead of the initial public offering (IPO) of his company SpaceX.

Musk is requiring banks, law firms, auditors and other advisers working on the IPO to buy subscriptions to Grok, his artificial intelligence (AI) chatbot, which is part of SpaceX, said four people with knowledge of the matter, who were not authorised to speak publicly about confidential discussions.

Some of the banks have agreed to spend tens of millions on the chatbot, and they have already started integrating Grok into their IT systems, three of the people said.

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

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For almost any major initial public offering, banks find ways to ingratiate themselves with the company going public, as well as its chief executive. But after several years with few significant public offerings coming to market, Wall Street has been salivating for a deal like SpaceX, which is forecast to be one of the largest in history. The IPO is expected to raise more than $50 billion at a valuation above $1 trillion, which means the banks could generate fees in excess of $500 million for advising on the deal.

Musk's ability to secure business from the banks for his AI chatbot also shows the enormous sway of the world's richest man over a banking sector clamoring for his business now and into the future.

The banks' purchases of Grok subscriptions were not merely good-will gestures, said three people with knowledge of the arrangements. Musk insisted that they purchase the chatbot services. He has also asked the banks to advertise on X, which is also owned by SpaceX, but was less adamant about that request, according to two of those people.

For now, five banks are expected to work on the offering -- Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley. The law firms Gibson Dunn and Davis Polk are also advising on the deal.

Musk's agreement with banks is a big score for SpaceX, which merged with xAI in February and whose Grok is a distant fourth in the AI race behind OpenAI's ChatGPT, Claude and Google's Gemini.

Musk has marketed Grok as the antidote to political correctness and said his chatbot would not be "woke," unlike its competitors. In recent months, Grok has been mired in controversy after sharing antisemitic content as well as generating nonconsensual sexualised images of women and girls. Despite its problems, Musk has continued to promote the chatbot, regularly urging his more than 237 million followers on X to "try Grok."

Grok generates revenue mostly from individuals rather than from businesses. The subscriptions from the banks will give the so-called enterprise part of the AI arm a boost ahead of SpaceX's IPO.

In its most recent financial report to investors before the SpaceX merger, xAI reported roughly $1 billion in revenue from its AI operations, according to a person who viewed the results. Starlink, SpaceX's satellite internet service, generates billions of dollars in so-called free cash flow from its operations, said a person familiar with its financials. Documents obtained by The New York Times showed that Starlink recorded about $8 billion in revenue in 2024.

It's unclear which bank, if any, will have the lead role in the deal, a position that carries prestige and often an outsize share of the fees, according to two people familiar with the negotiations. SpaceX, which confidentially filed IPO paperwork with the Securities and Exchange Commission this week, left the names of banks off the filing, one of the people said.

Conditions apply

Some banks have agreed to spend tens of millions of dollars and begun integrating Grok into their internal IT systems
With SpaceX expected to raise over $50 billion at a valuation above $1 trillion, the banks could generate fees in excess of $500 million for advising on the deal
Beyond Grok, Musk has also asked banks to advertise on X
Subscriptions from the banks could strengthen Grok's corporate revenue profile ahead of listing

Big banks seeking a piece of spacex's IPO must subscribe to Musk's grok