Elon Musk Has Never Kept a Payday. The Spending on This One Has Already Started.

Last Tuesday, SpaceX reported the first profitable quarter of its life as a public company.¹ Revenue for the three months through September was $14.6 billion, up 161% from a year earlier, and net income was $4.4 billion, or 35 cents a share, beating Wall Street's expectations.² The artificial intelligence business became the company's largest by revenue, at $7.6 billion for the quarter, while Starlink remained its biggest profit generator.^1, 2

The next evening, on Tesla's own earnings call, Elon Musk was asked about the merger talk between his two biggest companies. He answered in one line: "With regard to a potential merger with SpaceX, I think I said everything that should be said yesterday."³

What he had said the day before was careful. A merger would be "a good idea," he told SpaceX's analysts, and both boards have formed special committees of independent directors to study one.⁴ But he pushed back on the idea that a deal is done: "Some people out there assume that a SpaceX and Tesla merger is a certainty. I think that would be overstating it."²

Step back from the merger question and a bigger one sits underneath it. Musk held 48.4% of SpaceX as of June 30, about 6.42 billion shares, a stake Reuters valued at more than $900 billion in August.⁵ Forbes now puts his net worth at $925 billion after the recent drop in SpaceX and Tesla shares.² No individual has ever controlled that much capital. The question for investors is not what Musk owns. It is what he does with it, and on that point his record is unusually consistent.

He has never kept a payday

In February 1999, Compaq bought Musk's first company, Zip2, for $307 million in cash. His 7% share came to $22 million. A month later he put $12 million of it into a new company, X.com.⁶ X.com merged with Confinity, became PayPal, and was sold to eBay in 2002 for $1.5 billion in stock. As the largest shareholder, Musk received $176 million.⁶

That money did not stay in the bank either. He founded SpaceX in May 2002 and put $100 million of his own money into it. In February 2004 he led Tesla's Series A round with $6.35 million and became its majority shareholder and chairman.⁶ When he wanted Twitter in 2022, the deal came to roughly $44 billion, including about $12.5 billion borrowed against his Tesla stock.⁶

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The pattern is nearly three decades old. Each sale funds the next build, and when the shares cannot be sold, they get borrowed against. Nobody who has watched Musk for that long expects the SpaceX stake to sit still.

The catch, and why it matters less than it looks

Here is the catch. Musk's own SpaceX shares are locked until June 2027.⁷ The unlocks that have been shaking the stock belong to other holders: up to 1.3 billion shares became eligible on the second trading day after the third-quarter results, another 328.4 million became tradable yesterday, and 797.6 million more are freed after the close on December 8.⁷ The shares closed at $147.79 last Tuesday, down from a post-IPO peak near $201.²

But Musk does not need to sell a share to deploy capital, because the companies he controls are doing it for him. SpaceX spent $19.6 billion on capital expenditure last quarter, nearly triple the year-earlier figure, and forecast $35 billion to $40 billion for the current quarter.² For the first nine months of the year the total was $48.1 billion, and the company still ended September with $51.3 billion of cash and $38.6 billion of marketable securities.¹ Tesla spent $4.73 billion in the quarter, more than double a year earlier, with research and development spending up 69%.⁸

Where the money is already going

Start with chips. In August, SpaceX announced a plant in Grimes County, Texas, called Terafab, with an initial phase estimated at $16.8 billion, to make computer chips for both SpaceX and Tesla. The two companies estimate their plans will need more than a terawatt of computing power, more than the world's current chip supply.⁹ On last Wednesday's call Musk called it "the most valuable building in the world" and said the bill is "not going to be less than tens of billions in capital equipment up through early 2028," adding that the two companies still have to "figure out what the relative split is between SpaceX and Tesla."³

Then artificial intelligence. On February 2, SpaceX completed its merger with xAI, a combination Musk described as a "vertically-integrated innovation engine," a week after Tesla put $2 billion into xAI.¹⁰ On August 14, SpaceX closed its $60 billion all-stock purchase of Cursor, an AI coding company.¹¹ By the end of September the AI segment had 1.7 gigawatts of nameplate compute and had taken $16.4 billion of the quarter's capital spending.¹

Then robots and batteries. Musk told Tesla's analysts he remains "convinced that Optimus will be the biggest product on Earth" and that the company needs "on the order of 10,000 or 20,000 bots" to train them properly. On energy, he said Tesla is "almost sold out of all Megapacks for 2027."³

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Even the giveaways are capital deployment. On October 19, Musk said on X: "Next year, I will give one of my SpaceX shares to every kid in America," without explaining how it would work.¹²

Who gets paid

Every item on that list is a purchase order for somebody else. A chip plant buys lithography tools, gas systems and clean-room equipment. A gigawatt of compute buys servers, cooling and transformers. A robot line buys motors, sensors and cells. A sold-out battery business buys more cells and more switchgear. Tesla itself said that "battery availability continued to be the limiting factor in increasing auto volumes in the quarter."⁸ When the richest person in the world is building, the money lands with the companies that sell him the parts.

When the richest person in the world is building, the money lands with the companies that sell him the parts.

That is the lesson of the Zip2 and PayPal years, applied at a scale nobody has seen. The proceeds never made Musk a passive investor. They made him the biggest customer his next set of suppliers ever had.

There are real risks. SpaceX shares are well off their peak, and more unlocks are coming.^2, 7 Tesla's operating margin was 2.6% last quarter, and its shares fell more than 3% after the call.^8, 13 A merger is not certain, and Terafab's spending runs to 2028. Plans this size can slip, and a market that has already sold SpaceX down from its high is not in a forgiving mood.

But the direction is set by history. Musk has had two big cash paydays and put both into the next company; when he could not sell, he borrowed against the shares. The payday now arriving is the largest ever, it is already being spent through SpaceX and Tesla, and the targets are no secret: chips, compute, robots and the grid. The question worth asking now is not whether to own his companies. It is who he is about to pay.