SpaceX Woos Investors As C-Suite Shakeups Continue
The Takeaway
- SpaceX to host institutional investors in Texas, Tennessee
- xAI’s top finance executive Anthony Armstrong has left
- xAI pauses $80 million water facility for data center in cost-cutting measure
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.