Elon Musk Denies Report of Potential Investment From Saudi Arabia, UAE

Elon Musk denied recent reports that SpaceX was in talks with Saudi Arabia and the UAE for a potential investment round. In a tweet replying to a Teslarati report, he simply said, “Not true.”

Saudi Arabia operates a sovereign investment fund it calls the Public Investment Fund (PIF). The report also said a private Abu Dhabi company was planning to invest in SpaceX. Saudi Arabia’s Public Investment Fund previously invested $200 million in SpaceX. The UAE invested $100 million.

However, Saudi Arabia’s PIF may have had a falling out with Elon Musk when Musk tweeted that he had funding in place to take Tesla private in 2018. According to Musk’s testimony while defending against an investor lawsuit, he expected at least part of the funding to come from the PIF. However, it turned out to be a case of Musk counting his chickens before they hatch and the deal was never finalized.

The now-infamous tweet led to lawsuits from Tesla shareholders and scrutiny from regulators. In a settlement with the SEC, Musk agreed to have an attorney vet any tweets that might impact the value of Tesla shares. However, he has had difficulty retaining the attorney since then, likely due to some behind-the-scenes battles between Musk and the attorneys he hired.

The tweet also led to an investor lawsuit alleging market manipulation. A jury recently dismissed a class-action lawsuit against Elon Musk.

The incident could have made the PIF hesitate to own stakes in Elon Musk’s companies, at least publicly. However, Saudi Arabia became the second-largest shareholder in Twitter after Musk’s highly dramatic takeover of the social media platform.

Musk could also be playing it safe through not giving the SEC or investors in his companies any more ammo for a legal action. If he is in talks for a new fundraiser, he may not want to say so publicly until he has a finalized deal on paper and cash in the bank.

The supposed investment deal would have placed SpaceX’s valuation at $140 billion. Musk’s denial sparked speculation that he was trying to clamp down on speculation about its financial situation. As a privately held company, SpaceX does not have to send routine financial reports to its shareholders.

Any potential upcoming funding round is likely to include the venture capital firm Andreessen Horowitz, which is better known as the digital asset-friendly “a16z.” This firm is expected to lead the next funding round and holds a $400 million stake in Twitter. SpaceX planned to hold the funding round at a $137 billion valuation.

SpaceX raised $2 billion in funding rounds in 2022 and $2.6 billion in 2020. Since its founding in 2002, it went through some hiccups with early rocket development that came close to bankrupting the company. It also challenged other aerospace companies and government organizations head-on for a more level playing field to compete for launch contracts. In typical Elon Musk fashion, though, he was able to turn things around and it climbed to its current position as a leading launch service provider.

It may have used the 2020 and 2022 funding rounds to raise money for the development and deployment of the Starlink Internet-providing satellite constellation. It has already launched thousands of Starlink satellites into orbit and frequently launches more.

It also launches the “Transporter” satellite rideshare missions, which can bundle several small satellites from multiple organizations into a single launch. SpaceX’s contracts with NASA include launch services like sending cargo and crew to the International Space Stations on the two variants of its “Dragon” spacecraft. It will launch the first components of the Lunar Gateway space station and develop a Starship-derived lunar lander that NASA plans to fly on the Artemis III mission.

Its current success may make SpaceX an attractive company to invest in. In fact, somebody was caught selling fake shares in SpaceX with the claim that it went public. (News flash: It didn’t and any “financial advisor” who tells you it did is probably committing fraud. Ditto for any crypto-based “SpaceX Coin.”)

However, Elon Musk is keeping his mouth shut about any potential future funding around. He denied that he is in talks with Saudi Arabia and the UAE for potential investment in SpaceX.