Elon Musk's net worth has contracted sharply due to extreme volatility in SpaceX (SPCX.US) shares, with more than $48.5 billion erased in a single day on Friday, pulling his total wealth down from the trillion-dollar level reached just recently to $865 billion.
The primary driver of this wealth destruction was not his stake in Tesla Motors (TSLA.US), but rather the deteriorating performance of SpaceX (SPCX.US) on the Nasdaq market. Pressured by a broad U.S. stock market downturn and the deflation of the artificial intelligence sector bubble, SpaceX (SPCX.US) shares fell to $134 on Friday, marking not only a new low since August but also a significant retreat from last month's high of $176.56, representing a decline of as much as 40% from its post-IPO all-time peak.
According to data compiled by Woofun AI, market panic stems primarily from doubts about the return on investment in artificial intelligence infrastructure, and SpaceX (SPCX.US) is one of the most capital-intensive players in this space. Although the company disclosed in its latest earnings report that its AI business generated $7.56 billion in revenue during the September quarter, surpassing Starlink's $5.24 billion to become its largest revenue source, the capital expenditure behind it was equally staggering. Capital spending on the AI business reached $16.4 billion in that quarter, a figure that far exceeds the combined total of its space and network business segments.
In addition, SpaceX (SPCX.US) owns Grok, a product that competes directly with ChatGPT and Claude, and Musk has warned that more than 200 new cloud service companies could collapse due to funding chain failures. This concern about an industry bubble bursting has directly hit SpaceX (SPCX.US), which needs $40 billion in funding to develop its data center business.
Notably, SpaceX (SPCX.US)'s weakness is not an isolated case. Its competitors CoreWeave (CRWV.US), Nebius (NBIS.US), and IREN (IREN.US) have also seen their share prices fall by more than 50% from their all-time highs, reflecting an ongoing valuation restructuring across the entire AI infrastructure sector.
In stark contrast to SpaceX (SPCX.US)'s slump, Tesla Motors (TSLA.US) has demonstrated strong resilience this week. As the week ended, Tesla Motors (TSLA.US) shares closed at $400, up 34% from this year's July low. This upward trend was supported by Musk's earlier proposal to merge SpaceX (SPCX.US) with Tesla Motors (TSLA.US) to form a large conglomerate, which received positive feedback from the market. Meanwhile, changes in macroeconomic energy prices have also provided tailwinds for Tesla Motors (TSLA.US), with average gasoline prices now at $4.2 per gallon and diesel prices near historic highs, prompting more American consumers to switch to electric vehicles with lower maintenance costs.
Improving fundamentals further confirmed market confidence. Tesla Motors (TSLA.US)'s latest delivery report showed third-quarter deliveries reached 486,532 units, well above the previous quarter's 464,391 units, indicating continued strong demand.
In terms of asset structure, Elon Musk holds approximately 49% of SpaceX (SPCX.US), which constitutes the bulk of his wealth, while his roughly 12% stake in Tesla Motors (TSLA.US) is valued at approximately $197 billion. Analyst Dan Ives estimated in a recent research report that once the merger plan between SpaceX (SPCX.US) and Tesla Motors (TSLA.US) is implemented, Tesla Motors (TSLA.US) shares could reach around $500 per share, as investors are willing to pay a higher premium for such economies of scale.
However, before the merger is completed, SpaceX (SPCX.US)'s high capital expenditure and the overall valuation correction risk in the AI industry will remain key variables suppressing the growth of Elon Musk's net worth. This situation signals that tech giants, in their pursuit of AI supremacy, are facing a harsh transition from a "growth narrative" to a "profitability reality."
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