Elon Musk’s SpaceX is barreling toward what may become the largest IPO in history, and one MIT professor says the whole thing reads like a Jekyll and Hyde story.

Sinan Aral, an MIT Sloan professor and director of the MIT Initiative on the Digital Economy, told CNBC THursday the deal is either a brilliant vertical integration play or an expensive cover for weaker brands.

In the bull case, SpaceX supplies the space compute, xAI the model, Starlink the network, and X the consumer reach. In the bear case, investors are buying a fourth-tier AI model and an overpaid social network wrapped inside a real rocket company.

The Escalating Valuation Trail

Aral’s skepticism centers on a paper trail of climbing numbers. When Musk folded X into xAI, the AI firm was valued near $80 billion and X around $33 billion, even though earlier shuffles had implied a $250 billion tag on xAI.

Those figures keep ratcheting up as the companies roll together. The question, Aral said, is whether that reflects real synergy or valuations stretched past what the assets justify.

One number suggests the demand is real. Anthropic has agreed to pay roughly $1.25 billion a month for SpaceX’s Colossus compute capacity, a deal that could deliver up to $45 billion through May 2029.

That contract may turn the AI segment from a cost center into a revenue engine, but Aral’s worry is the model itself. He pegged it as a third- or fourth-tier product, and Grok has bled users to Claude and ChatGPT even as the compute around it scales.

A Merger With Tesla?

The interview surfaced growing market rumors that SpaceX will eventually swallow Tesla (NASDAQ:TSLA) to complete Musk’s vertical loop. Aral did not dismiss the theory.

Tesla’s millions of cars generate the kind of real-world driving video needed to train self-driving and robot models, and a combined company could run all of it on SpaceX’s compute and Starlink network. Aral said an integration like that would face virtually no competitors at its scale.

Dan Ives of Wedbush expects the two to merge eventually.

Kalshi thinks there is a 60% chance of a merger before May 1 2027.

Where The Money Is Moving

SpaceX is targeting a $1.75 trillion valuation when it lists on the Nasdaq under the ticker SPCX around June 12, according to its S-1.

On Polymarket, the SpaceX IPO closing market cap above $2 trillion carries roughly a 78% chance.

Musk is already favored to become the world's first trillionaire before New Year's, but a pay package buried in SpaceX's S-1 filing last week could push him toward $2 trillion if he delivers a Mars colony.

Aral declined to say whether he would buy the IPO, noting only that people have bet against Musk before and lost.

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