According to three informed sources, several major Wall Street fund managers plan to travel to the southernmost tip of Texas and then approximately 950 miles to Memphis, Tennessee, for an exclusive tour of SpaceX facilities. This visit comes ahead of what could become the largest initial public offering in history.
The two-day itinerary is expected to be impressive: at Starbase, SpaceX is constructing the world's largest fully reusable rocket, while xAI's two massive data centers, Colossus 1 and Colossus 2, are also located there. However, some investors have raised questions about how these two Elon Musk-led companies will operate after merging into a single artificial intelligence and aerospace giant. A recent sign of change, according to two sources, is the departure of xAI's Chief Financial Officer Anthony Armstrong, which is part of a wave of executive exits at the company.
These activities, set to begin the week of April 20, form the core of a weeks-long investor roadshow, two sources revealed. Coordination efforts have accelerated this week, aiming to gather investors of various sizes to support this potentially record-breaking new stock issuance. So far, investor communications have focused on SpaceX's vision: combining its unique satellite development capabilities with high-end space-based chip launch operations over the coming years, while simultaneously advancing ground-based data center construction.
The company's decision on the IPO's size and valuation will depend on investor reception to this pitch. Some investors have already expressed concerns to banks involved in the deal, stating that reported aspirations for a valuation as high as $2 trillion are difficult to accept and urging a reconsideration of pricing. (Musk has denied reports on platform X suggesting the company is seeking such a high valuation.)
Concurrently, SpaceX is moving to spin off business segments that may be less attractive to investors, including the persistently cash-burning xAI. Reports indicate xAI was losing approximately $1 billion per month for most of 2025. Restructuring and improving xAI's operations could help optimize SpaceX's financial position ahead of the IPO tentatively scheduled for June.
In recent weeks, SpaceX CEO Elon Musk has directed xAI to cut all non-profitable project expenditures while accelerating plans to launch new AI models, one source said. The company has already indefinitely postponed construction of an $80 million facility in Memphis; the facility was originally planned to treat and recycle wastewater for xAI's data centers and other industrial sites.
Armstrong, a former Morgan Stanley banker who joined xAI as CFO last autumn, was responsible for the company's data center construction and its $20 billion financing round announced in January. After SpaceX acquired xAI in February, Armstrong was placed under SpaceX CFO Bret Johnson, who is now leading the IPO process for the combined entity. Prior to xAI, Armstrong advised Musk on the acquisition of Twitter in 2022 and worked at Musk's Department of Government Efficiency in 2025.
A spokesperson for xAI did not respond to requests for comment. By Thursday, the xAI employee identifier had been removed from Armstrong's X profile. When contacted for comment via text message, Armstrong replied, "The matter is concluded."
Following the completion of the SpaceX acquisition, which valued xAI at $250 billion, most of xAI's senior management team, including several co-founders besides Armstrong, have departed in recent months. Longtime SpaceX executive Michael Nichols currently oversees much of xAI's operations, according to sources; Nichols leads the Starlink team and reports to SpaceX President and COO Gwynne Shotwell. Previous reports indicated Nichols has transferred several engineering leads from SpaceX to xAI and stated in an internal memo that xAI was "significantly behind."
The postponement of the wastewater recycling facility is likely to face opposition in Memphis, where xAI has become a significant political issue. The facility was intended to reduce the environmental impact of its "Colossus" data centers. xAI held a groundbreaking ceremony for the project last October, announcing an investment exceeding $80 million.
On Wednesday, local media Memphis Daily News reported the project's delay, quoting an engineer responsible for the wastewater facility who said the project had been "indefinitely suspended." On Thursday, Musk posted on X: "We need to focus on completing the Colossus 2 data center and ensuring its high stability before building the water recycling plant."
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