Musk’s $1tn deal to build a colony on Mars
Musk’s $1tn deal to build a colony on Mars
Matthew FieldSat, May 16, 2026 at 9:00 AM UTC
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The tech billionaire has pledged to make mankind an interplanetary species
On a sprawling launch site in Texas, the final preparations are under way to ready SpaceX’s Starship rocket for its 12th test flight.
A successful mission on Tuesday would take mankind a step closer to reaching Mars. It would also edge Elon Musk nearer to a potential $1tn (£750bn) payday.
Thousands of miles from the Starbase site in Texas, investment bankers on Wall Street are attempting to engineer a financial moonshot for the rocket business.
Musk has claimed SpaceX will one day make humanity an interplanetary species, colonising the red planet. His financial goals for the company are of similarly out of this world.
SpaceX is expected to formally announce its plans for an initial public offering as soon as this week. The deal could value Musk’s space empire at between $1.75tn and $2tn.
The supersize float is forecast to break multiple records. Musk, 54, is seeking to raise as much as $75bn, almost three times as much as the next largest float of all time, that of Saudi Aramco, the state-owned oil giant.
Just months ago, SpaceX was valued at $1.25tn, as it merged with another branch of Musk’s empire, xAI, his artificial intelligence venture.
Yet amid the hype, there have been warnings from investors that the deal will hand the mercurial billionaire absolute control of the company, all while exposing funds to a stock with an outsized valuation derived chiefly from its founder’s personal aura.
When SpaceX finally reveals its public prospectus, it is expected to disclose some of Musk’s wildly ambitious goals for the business – and the rewards on offer if he achieves them.
These include an ambition to build a million-person colony on Mars, launching 100 terawatts of data-centre satellites, and reaching an overall valuation of $7.5tn.
If all these goals are achieved, SpaceX will reward Musk with up to 260 million shares in the business. Compensation experts and analysts told The Telegraph this could hand Musk as much as $1tn in stock options.
Eric Hoffman, of executive compensation firm Farient Advisors, says it is “safe to say that it will be worth somewhere between $500bn and $1 trillion”, although the “challenge of these goals is unprecedented”.
He adds: “It was a herculean effort to send four people around the back side of the Moon on an 11-day trip. SpaceX would need to send 1,000 ships each containing 1,000 people to Mars – a one year journey – to meet that one-million-inhabitant goal.”
On its website, SpaceX claims that its self-sustaining city on Mars will require “millions of tonnes of cargo” to be delivered to the red planet, with more than 10 Starship launches per day during a brief window of planetary alignment that opens once every two years. Each ship that eventually makes the passage to Mars will need dozens of refuelling tankers to launch from Earth to load the vessel up for its months-long flight.
SpaceX has claimed that “thousands of Starships will ultimately transfer crew and equipment” to Earth’s neighbour. The company has said it will begin exploratory missions to Mars in 2030.
Musk had once promised an uncrewed mission to Mars by 2022. So far, five of its 11 test missions have ended in total or partial failure.
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Musk wants to build a colony of one million people on Mars
Ahead of the float, Chris Quilty, of space analysis firm Quilty Analytics, notes there have so far been no details of how SpaceX will fund a Mars colony.
“For the past 20 years, the Mars colony was the rationale for not going public – he did not want to have to justify those expenditures,” he says.
Aside from a Mars mission, SpaceX’s float is expected to trigger a spending spree worth hundreds of billions of dollars.
SpaceX’s plans to build the world’s largest chip plant, dubbed the Terafab, which could cost as much as $119bn. It has also agreed an option to acquire Cursor, an AI coding business, for as much as $60bn. That is on top of the estimated $15bn overall cost of its Starship rocket programme, Reuters reported, and billions more on Starlink.
On top of reaching Mars, Musk has claimed SpaceX will attempt to launch one million satellites that will form a vast, planet-spanning AI data centre in space. Analysts at Moffett Nathanson have calculated that could cost as much as $5tn per year. For comparison, the annual GDP of the US is about $30tn.
It is understood that early analyst meetings with SpaceX had focused more on its AI ambitions and plans for data centres in space than on its core rocket launch business as its bankers sought to capitalise on the AI stock market boom.
SpaceX says it will begin exploratory missions to Mars in 2030
With Musk at the helm and Mars colonisation at stake, the float is expected to trigger a frenzy of interest from small shareholders. As much as 30pc of the offering, or around $22bn, will be allocated to retail investors, many of them Musk fans. Typically, about 5pc of a float is offered to everyday investors.
Duncan Ferris, an analyst at trading platform Freetrade, says this cohort of Musk-backers could make “early trading more volatile and emotional”.
Some investors have warned of potential red flags in the mega-deal that could strain markets.
US public sector pension giants, which collectively control $1tn in savings, last week warned the float allows Musk an “extreme” level of control, making him practically impossible to fire and leaving shareholders with no option but to accept the billionaire’s whims.
A spokesman for Ekō, the shareholder activist group, says: “Musk can’t be held accountable, can never be fired, and has no limits on multi-trillion-dollar pay cheques.
“UK investment funds should be sounding the alarm. This deal locks in a governance structure where Musk is effectively fire-proof, leaving shareholders with all the risk while he retains absolute control.”
Gordon Johnson, founder of GLJ Research, adds: “This is the most aggressively priced mega-IPO in modern market history. The compensation plan is structurally designed to entrench the founder, rather than align with public shareholders, and the governance architecture is the most one-sided of any company that will list at this scale.”
Critics say that SpaceX going public would make Elon Musk ‘fire-proof’ - Michael Gonzalez
Other investors have also pointed out that a rule change by the Nasdaq will allow SpaceX to be added to the blue-chip index in just 15 days, rather than several months. This fast-tracking will mean passive, index-linked funds will be forced to buy its stock, helping to juice SpaceX’s already inflated valuation. They will buy these shares before stock lock-ups on insiders end, allowing them to cash out.
Quilty notes that other space stocks have already skyrocketed this year – or gone “bats--- crazy” – over the hype surrounding the SpaceX deal.
It is unclear whether that momentum can last.
If Starship pulls off a successful launch this week, it will be taken as a sign by SpaceX fans that the Musk IPO rocket ship is ready for blast-off. And even if it fails, it is unlikely to bring Musk’s legions of admirers back down to Earth.
Source: “AOL Money”
