It is not unusual for major corporations to make various demands of their bankers and lawyers when undertaking significant transactions. However, ahead of SpaceX's initial public offering, Elon Musk has presented a particularly bold requirement to Wall Street advisors.
According to media reports citing multiple informed sources, Musk has mandated that banks, law firms, audit agencies, and other advisors participating in the SpaceX IPO purchase subscriptions for his artificial intelligence chatbot, Grok. Grok is part of the broader SpaceX ecosystem. Some banks have already agreed to invest tens of millions of dollars in the chatbot and have begun integrating Grok into their own IT systems.
In nearly all large IPOs, banks seek ways to court the company going public and its chief executive. Following years of scarce major IPO activity, Wall Street is eagerly anticipating a deal like SpaceX's, which is expected to be one of the largest IPOs in history.
The offering is projected to raise up to $75 billion, with SpaceX's valuation potentially exceeding $2 trillion. This means Wall Street banks could earn over $500 million in fees solely from advisory services.
Musk's ability to secure business for his AI chatbot also underscores the significant influence he wields over banking institutions eager to win his business.
Reports cite several individuals familiar with the arrangements, noting that banks are purchasing Grok subscriptions not merely as a gesture of goodwill. Musk has insisted they procure the chatbot service. Additionally, he has requested these banks to place advertisements on his social media platform X, though he has been somewhat less forceful on this particular demand.
Currently, five banks are expected to participate in the offering, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, and Morgan Stanley.
The agreement Musk has reached with these banks represents a major victory for SpaceX. The company merged with xAI in February of this year. Grok currently holds a relatively trailing position in the AI competition, ranking fourth behind OpenAI's ChatGPT, Anthropic's Claude, and Google's Gemini.
