TheChek News Flow

The Takeaway

Some of the biggest Wall Street fund managers are planning to trek to the southernmost tip of Texas, then about 950 miles to Memphis, Tenn, in two weeks, for exclusive visits to SpaceX facilities ahead of what could be the biggest initial public offering of all time, three people familiar with the matter said.

The two-day trip is sure to inspire awe at Starbase, where SpaceX is building the world’s largest fully reusable rocket, and Colossus 1 and 2, xAI’s pair of massive data centers. But it also comes as some investors have questions about how the two Elon Musk businesses will function as part of one AI-space behemoth. One recent sign of change is the departure of Anthony Armstrong, xAI’s chief financial officer, two people familiar with the matter said, part of a wave of senior exits at the company.

The events, which kick off the week of April 20, are a centerpiece of weeks of investor meetings that started picking up speed this week to line up investors large and small to support what could be the largest ever injection of new shares into public markets. Investor conversations so far have centered on SpaceX’s vision to marry its unique satellite-development capabilities to launch high-end chips in space in the coming years, while continuing to push toward building data centers on land, two of the people said.

The company’s decision on IPO size and valuation will hinge on how well investors take to the pitch. Some investors have voiced concerns to investment bankers close to the deal that the valuation that SpaceX has been reported to seek—as high as $2 trillion—would be unpalatable, and are urging them to consider a lower price. (Musk pushed back on X reports that the company would seek that high of a price.)

Meanwhile, SpaceX is cleaning up some of the parts of its business that are potentially a tough sell to investors, including its cash-burning xAI. Overhauling xAI, which The Information has reported was losing around $1 billion per month for most of 2025, could help SpaceX get its financials into shape ahead of an IPO slated for June.

In recent weeks, SpaceX CEO Elon Musk has been pushing xAI to cut spending on anything that doesn’t generate revenue while simultaneously accelerating plans for new AI models, one of the people said. So far, that’s resulted in the company indefinitely delaying work on an $80 million facility in Memphis designed to recycle wastewater for use at an xAI data center and other industrial sites.

Armstrong, a former Morgan Stanley banker, joined xAI last fall as CFO, working on the company’s data center buildout and a $20 billion funding round that xAI announced in January. When SpaceX acquired xAI in February, Armstrong was placed under SpaceX CFO Bret Johnsen, who’s now spearheading the combined company’s initial public offering process. Before joining xAI, Armstrong advised on Musk’s Twitter takeover in 2022. In 2025, he worked for Musk’s Department of Government Efficiency.

A spokesperson for xAI didn’t respond to a request for comment. As of Thursday, an insignia given to xAI employees no longer appeared on Armstrong’s X profile.

Much of xAI’s senior leadership team beyond Armstrong, including several co-founders, has left the company in recent months following the SpaceX merger, which valued xAI at $250 billion. Now, Michael Nicolls, a longtime SpaceX executive who heads the Starlink team and reports to President and chief operating officer Gwynne Shotwell, is leading much of xAI as well, according to the person with direct knowledge. Business Insider reported on Wednesday that Nicolls had brought in engineering leaders from SpaceX and said xAI was “clearly behind” in an internal memo.

But the delay to the wastewater recycling facility is likely to lead to backlash in Memphis, where xAI has become a significant political issue. The facility was intended to reduce the environmental impact of its Colossus data center. xAI broke ground on the facility in October and said at the time that it would cost more than $80 million.

On Wednesday, local news outlet the Daily Memphian reported on the delay, quoting an engineer in charge of the wastewater facility saying the project was on “indefinite pause.” On Thursday, Musk posted on X: “We need to focus on finishing Colossus 2 and ensuring it is extremely stable, then will build the water recycling plant.”

The Wall Street Journal and Reuters previously reported aspects of SpaceX’s investor roadshow plans.

The Takeaway

Three senior OpenAI executives who helped launch the company’s original Stargate data center initiative have left or are preparing to depart the ChatGPT maker in the coming days, according to several people with direct knowledge of the matter.

Peter Hoeschele, an OpenAI executive who played a key role in getting the Stargate effort off the ground, has already left the company, one of the people said. Two others—Shamez Hemani, who worked on compute strategy and business development, and Anuj Saharan, another leader in OpenAI’s compute organization—have announced their departures to colleagues, two other people said..

The departing executives are all going to the same new company, according to one of the people, though the name of that firm could not be learned.

The infrastructure team has been at the center of one of the biggest challenges that OpenAI and its rivals are contending with: how to ensure access to enough computing power to meet soaring demand for AI products at prices that the startup can sustain. OpenAI has said it plans to secure more than $600 billion in compute capacity over the next five years—spending plans that have prompted it to ink deals with an array of chip and cloud giants, from Oracle to Amazon Web Services.

The departures come after a broader reorganization of OpenAI’s infrastructure efforts. Late last year, the company hired former Intel executive Sachin Katti as head of compute and infrastructure.

“We’re grateful for the contributions Peter, Shamez, and Anuj have made to OpenAI and wish them the very best in what comes next,” an OpenAI spokesperson said in a statement. “Sachin Katti was recently hired to lead our Industrial Compute organization, which is making solid progress as we scale the infrastructure required for the next generation of AI systems.”

Last year, the team inked deals for 8 gigawatts of compute capacity in the coming years, short of the 10 gigawatt goal the firm set out to reach when it announced its $500 billion Stargate initiative in January 2025. That’s still a massive amount of capacity, however. OpenAI ended last year with access to around 2 gigawatts of capacity, the same amount of power that can be generated by two nuclear power plants.

Saharan posted a note in OpenAI’s Slack Thursday about his decision to depart, saying that “getting to help build literally the world’s largest computers over and over again with you all has been the ride of a lifetime.”

Original Stargate Leaders

Hoeschele, Hemani and Saharan were part of the original Stargate team, an ambitious initiative aimed at helping OpenAI build and operate its own large-scale data centers. The effort, announced at a televised White House event shortly after President Trump took office, was central to the company’s early push to secure long-term control over the infrastructure needed to train and run advanced AI models.

But OpenAI ultimately pulled back from that approach last year after struggling to line up financing and finalize the structure of a proposed joint venture with SoftBank and Oracle. In its place, the company has increasingly leaned on partnerships, opting to rent large amounts of compute capacity from cloud and infrastructure providers rather than directly owning the assets.

Following Katti’s arrival, several executives who had previously reported directly to OpenAI President and co-founder Greg Brockman—including Hoeschele—were moved under Katti, who reports to Brockman. Hoeschele went on to lead a group known internally as Ecosystems and Partnerships for Industrial Compute, or EPIC.

OpenAI does not plan to find a replacement for Hoeschele’s role, according to a person with direct knowledge.

Swipes at Anthropic

Though OpenAI’s Stargate strategy evolved last year, the firm believes that its aggressive spending strategy has given it a leg up against its competitors. In a recent memo OpenAI shared with investors, OpenAI took a swipe at rival Anthropic, which it claims is “operating on a meaningfully smaller curve” when it comes to compute capacity.

OpenAI said it believes Anthropic had 1.4 gigawatts of capacity at the end of last year, while OpenAI had 1.9 gigawatts. But OpenAI said it plans to ramp its capacity more steeply, with total gigawatts in the mid-single digit range at the end of this year and more than 10 gigawatts in 2027.

In contrast, it believes Anthropic will have 3 to 4 gigawatts in 2026 and 7 to 8 gigawatts by the end of 2027. (Anthropic hasn’t publicly disclosed its compute plans, but The Information has reported it has discussed securing at least 10 gigawatts of capacity over the next several years.) Bloomberg first reported on OpenAI’s investor memo.

The Takeaway

SpaceX lost just under $5 billion last year while generating more than $18.5 billion in revenue, two people familiar with the figures said.

The financial figures include xAI, the Elon Musk-founded artificial intelligence company that SpaceX acquired in February. The net loss, as well as other financial figures that consolidate SpaceX and xAI’s performance, haven’t been previously reported.

SpaceX has closely guarded its financials as it prepares for what will likely be the largest initial public offering of all time. The loss figure shows that investors who participate in the IPO will essentially be financing Musk’s unproven AI ambitions in order to get a piece of a high-performing commercial space and telecom firm.

SpaceX spent heavily on chips and data centers to power xAI, with capital expenditures for the division nearing $13 billion. That was 50% more capital spending than the rocket and satellite divisions combined.

SpaceX’s core businesses of selling rocket launch services to governments and companies, as well as selling its own Starlink satellite internet services, together generated nearly $8 billion in earnings before interest, taxes, depreciation, amortization and stock-based compensation in 2025.

The two space-related divisions are intertwined, with most SpaceX launches of its Falcon 9 launches carrying Starlink satellites, rather than other companies’ payloads.

Overall, including its AI division, the company generated just over $6.5 billion in adjusted EBITDA.

SpaceX’s depreciation of chips, rockets and satellites was among its largest expenses, topping $6.6 billion. Other large costs were stock-based compensation and interest expenses, which each neared $2 billion.

For SpaceX bulls, the company’s allure is its dominance in the commercial space market, where it sends by far the most payloads into space, lapping competitors. That could further its ability to catch up in the AI race in the coming years if it can bring down the cost of launching solar-powered data centers into orbit, as Musk has said he wants to do.

SpaceX is hosting investor meetings this month and sending invitations to a two-day IPO sales pitch in southern Texas and Tennessee, where it launches its new rocket and is building data centers, respectively.

In February, Musk orchestrated the merger of SpaceX, his crown jewel, and xAI, the AI model company he founded to rival OpenAI. The combined company is planning to go public in June.

Anthony Armstrong, a former Morgan Stanley banker, recently departed as chief financial officer of xAI, The Information reported Thursday.