Unquestionably the "Science Fiction Financial Guru" Musk

Elon Musk’s “Starship Empire” high-stakes gamble, which sounds truly like a “castle in the air.”

On February 2nd, Elon Musk announced that his SpaceX would acquire his own “money-eating beast” company xAI for $250 billion. The merged company will have a portfolio including rockets, AI chatbots, and the social media platform X.

SpaceX originally planned to go public, and now, after the merger, xAI can also share in the funds raised through the new company’s IPO. SpaceX informed investors that the company’s valuation has risen from approximately $800 billion in December 2025 to $1 trillion. Meanwhile, the valuation of xAI in this deal is $250 billion. Combined, the post-merger company’s valuation is $1.25 trillion.

This deal further intertwines Musk’s various companies and creates the world’s most valuable private company. Of course, Musk doesn’t explain the merger this way. He describes it as a way to bypass the power limitations faced by ground-based AI data centers. “In the long run, space-based AI is obviously the only way to achieve scale.”

In a memo to SpaceX and xAI employees, Musk wrote: “I estimate that within the next two to three years, space will become the cheapest way to generate AI computing. With this cost advantage alone, innovative companies will be able to train AI models and process data at an unprecedented speed and scale, accelerating our breakthroughs in physics and spawning technologies that benefit humanity.”

Perhaps this is indeed valid in the long term, but does merging xAI and SpaceX now mean that xAI’s losses won’t drag down SpaceX?

In fact, Musk’s statement doesn’t even attempt to explain how xAI will help send data centers into space. Don’t forget, “Orbital AI” was originally a key part of SpaceX’s IPO narrative. This narrative emphasized transforming SpaceX from a rocket launch company into an infrastructure and service provider for space AI, leveraging Starship’s low-cost recovery technology and Starlink’s global communication network to build a high-value space internet and a potential space data center ecosystem.

So, what exactly does xAI bring to the table?

It is an AI model development company responsible for the Grok series models, selling Grok subscriptions to consumers, and attempting to sell Grok to enterprises, though currently without success. Like most AI startups, it is burning through cash at a high rate. Additionally, it owns X (formerly Twitter).

Undoubtedly, this move is financially motivated. Musk may be the world’s richest person, but he faces the same reality as other AI startup leaders: competing in AI R&D against tech giants with strong cash flows, like Google and Meta, is extremely difficult.

However, merging SpaceX and xAI doesn’t truly solve the problem. SpaceX’s revenue scale is far from enough to support the funding needed for xAI in the coming years. Reports suggest SpaceX’s revenue in 2025 will be about $15 billion, compared to Meta’s $200 billion. Musk’s other company, Tesla, is even larger—projected revenue of about $95 billion in 2025—but it is also in a high-investment phase, shifting toward robotics and robotaxi services. Tesla simply cannot support funding for both xAI and its own strategic transformation simultaneously.

Therefore, Musk’s only option is to persuade investors to believe in his “space data center” vision, hoping to raise enough cash through an IPO to support xAI. He might succeed—he has a “pied piper” appeal to investors. But on the concept of a “space data center,” he may still face skepticism.

Making data centers operate in space involves dizzying technical and financial obstacles, including heat dissipation, radiation protection, equipment maintenance, and the high costs of launching all hardware into orbit. Critics argue that launching data centers like AWS into space sounds more like science fiction than a practical business plan.

Science Fiction Financialization and Venture Capital Theology

However, critics fail to realize that Musk is selling science fiction itself.

This is why, although the merger originally served Musk’s more “secular” goal—strengthening the company’s overall financial power—he describes the combined operation in a highly sci-fi language in the memo to SpaceX and xAI employees, as if narrating humanity’s conquest of space and intergalactic travel.

This is a new fundraising approach: replacing traditional fundamentals with technological visions as the basis for legitimacy. I call this “Science Fiction Financialization.”

What is science fiction financialization? It refers to an economic model where capital values, finances, and speculates based on future technological visions that are not yet real, verifiable, or even physically feasible.

The “science fiction” here is not a literary genre but refers to the typical features of the underlying assumptions: technological feasibility is unproven; timelines are aggressively compressed (e.g., from “a century problem” to “a five-year roadmap”); narratives abandon product-level discourse, elevating to civilizational themes like “rewriting human labor,” “breaking Earth’s resource limits,” or “initiating the post-human era.”

Science fiction financialization is a form of post-industrial capitalism—capital markets price in futures that do not yet exist, turning “future imagination” itself into tradable assets. Its essence is not a “tech bubble,” but the securitization of the future. The reason for calling it “post-industrial” is that, unlike the industrial era’s sequence of “production—sales—profit—valuation,” in the post-industrial context, it becomes “narrative—expectation—valuation—re-financing—possible production,” with production delayed and stories brought forward.

In the merger blog post on SpaceX’s official website, it states: “This not only marks the next chapter of SpaceX and xAI’s mission but also the beginning of a new book: building a perceivable sun through scaled development to understand the universe and extend the light of consciousness to the stars.”

This can almost be called a theological dream. Musk’s masterful storytelling creates a classic case of “venture capital theology”: entrepreneurs construct future narratives, companies transform from “cash flow machines” into “containers of future stories,” investments resemble religious “sacrifices,” and a community of faith forms among investors and entrepreneurs. Skeptics are seen as “lacking vision.”

The valuation logic of venture capital, in this highly theological context, exhibits three characteristics: First, future-first—valuations heavily depend on future imagination rather than current profits. This disconnects capital flow from actual profitability. Second, unquestioned—once investors accept the future narrative, the underlying capital flow and strategic choices are regarded as natural and legitimate. Third, success mystification—success is explained as the realization of faith and vision, while failure is often attributed to bad timing or the “world not being ready,” rather than entrepreneurial or investment mistakes.

In short, the theological nature of venture capital turns faith in future technology and markets into the core logic of capital flow and valuation, giving investment a near-religious faith-like quality.

Atmosphere Valuation Makes Investment More Like Social Psychology

Complementing this theological approach is “atmosphere investing.”

Inspired by the concept of “vibe coding,” The Economist introduced the term “vibe valuation” to describe how venture capital firms assign extremely high valuations to AI startups while deliberately ignoring traditional financial metrics like annual recurring revenue.

In Silicon Valley, many startups receive high valuations driven by emotion and subjective feelings—what is called “atmosphere.” This emotional capital includes: founder narrative charisma, the grandeur of technological vision, investor community consensus, and the anxiety of “not missing the next wave.” When capital pricing is mainly based on market sentiment, future imagination, and narrative momentum rather than current financial capability, atmosphere investing occurs.

If theological venture capital emphasizes sci-fi visions, atmosphere investing focuses on collective emotion and social ambiance. In other words, contemporary investment behavior is increasingly driven by social approval, public opinion, and psychological resonance. Investor decisions are influenced not only by the company’s fundamentals but also by social media, public discourse, and investment communities.

For example, the January 2021 GameStop (GME) stock event was entirely driven by Reddit community sentiment, with price movements largely unrelated to traditional valuation metrics. Reddit retail investors bought heavily shorted GME shares through trading platforms, causing the stock to surge nearly 190 times, forcing hedge funds to cover losses. This demonstrated the power of “meme stocks,” stocks influenced by online discussion, viral social media spread, and emotional impact. Their popularity often stems from community members’ optimistic expectations for future growth or focus on specific events.

Typical features of atmosphere investing include: First, emotion-driven. Investors base decisions on feelings, psychology, or FOMO rather than financial statements or market size. Second, community amplification. Social media, online forums, and public opinion serve as emotion amplifiers, making investment behavior highly collective and contagious. Third, narrative dominance. Future visions, founder images, technological hype, and brand stories become core investment criteria.

In the case of SpaceX merging with xAI, atmosphere investing logic is also evident.

Investors, when paying attention to Musk’s orbital AI narrative, are influenced by media reports, social media buzz, and technical community discussions. This collective recognition and emotional resonance reinforce belief in the future narrative and amplify capital flow scale and speed.

From these post-industrial investment logics, investing increasingly resembles social psychology rather than accounting. When capital no longer revolves around capacity, profit, and cash flow, but instead flows based on belief strength and emotional climate, investment shifts from a calculation system to a collective psychological mechanism. Theological narratives turn the future into objects of faith, while atmospheric dynamics turn markets into emotional feedback loops; the former offers an ultimate narrative beyond reality constraints, the latter provides a social resonance structure for rapid story realization. Together, they form a new mode of capital organization.

This means today’s markets are no longer just resource allocation venues but also machines for producing future imaginations. The question is no longer just “can the project succeed,” but: when society’s attention, funds, and institutional resources are directed toward a few grand visions, who bears the structural consequences if these narratives fail? In this sense, the post-industrial investment logic ultimately tests not technological limits but society’s capacity to collectively bet on an uncertain future.

2026 may be the most astonishing IPO year in tech history, with giants like SpaceX, OpenAI, and Anthropic planning to go public this year. In this super cycle of IPOs, the market itself has become an experimental ground for future visions—here, faith, stories, and emotions, just like traditional profitability metrics, determine who can dominate the next wave of technological and social order construction. The potential cost is that when valuations are based on “civilizational turning points,” failure is no longer just a company collapse but a misallocation of societal resources.

This article is sourced from: Tencent News Voice of Thought

Risk Warning and Disclaimer

Market has risks, investment should be cautious. This article does not constitute personal investment advice, nor does it consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Invest accordingly at their own risk.