A controversial venture capital investment by Google a decade ago is evolving into one of the most profitable bets in Silicon Valley history. With SpaceX announcing the acquisition of artificial intelligence company xAI and integrating it into its expansive business landscape, Google, as one of SpaceX’s largest external shareholders, is now reaping massive returns from this capital feast.
According to a recent article by Wall Street Insights, Elon Musk’s SpaceX has completed the acquisition of xAI for a staggering $250 billion. This not only makes SpaceX the world’s most valuable private tech entity but also paves the way for its IPO, targeting a valuation of $1.5 trillion.
For Google, which holds around 7.4% of SpaceX, this investment, initially valued at just $900 million, is expected to soar to $111 billion, providing a return of over 120x. In addition to its 14% stake in Anthropic, the tech giant has quietly secured dual dividends in both space infrastructure and cutting-edge AI, all without directly bearing the operational risks.
A Decade-Old Bet Blossoms
Looking back to January 2015, when Google and Fidelity jointly invested $1 billion into SpaceX (with Google contributing around $900 million), the market was filled with skepticism.
At that time, SpaceX was valued at only $12 billion, the Falcon 9 rocket had not yet achieved regular reusability, and Starlink was still a concept. Musk was burning through cash to prove the feasibility of reusable rockets.
The Wall Street Journal was doubtful of the investment, pointing out “the major technical and financial challenges the project faced, including the cost of installing ground antennas and computer terminals to receive satellite signals,” and questioned “how SpaceX planned to transmit internet signals to Earth given that the company was not perceived to control radio frequency rights.”
But Google saw immense opportunity: a company with an effective monopoly in large-scale space launches, a founder with boundless belief, and a business model that would become increasingly valuable as global data and computing demands exploded.
As Starlink moved from PowerPoint slides to reality and gained widespread application, and as rocket reusability technology matured, SpaceX’s valuation curve showed near-vertical growth—from $36 billion in 2020 to $350 billion by the end of 2024, and targeting a $1.5 trillion valuation at IPO.
According to Bloomberg’s data, if SpaceX goes public with a $1.5 trillion valuation, Google’s stake is expected to surge from the initial $900 million investment to about $111 billion. This means that every dollar Google invested is expected to return approximately $123.
Earlier this year, Google reported $8 billion in “non-saleable equity securities” gains, which Bloomberg confirmed stemmed from SpaceX’s revaluation, accounting for 25% of Google’s Q1 net profit.
It’s important to note that this $111 billion gain had been hidden from most observers until now. As a private company, SpaceX’s shares on Google’s balance sheet had remained at their initial cost price for nearly a decade.
However, once SpaceX goes public, this $111 billion stake will become tangible and will appear in Google’s financial statements, fundamentally altering the way investors perceive the value of Google’s investment. For a company already valued at $4.1 trillion and whose stock has risen nearly 70% in the past year, this will still be a significant catalyst.
A Potential Variable: Starlink Going Public Separately
It is worth noting that Musk has repeatedly stated that SpaceX will not go public until regular flights of its Mars colonization transport system are underway, as the Mars colonization plan may not become profitable for years or even decades, making it difficult to garner support from public market shareholders.
However, Musk has also mentioned the possibility of Starlink, SpaceX’s satellite internet subsidiary, going public separately. SpaceX COO Gwynne Shotwell confirmed in 2020 that “Starlink is the kind of business we could take public.” Musk himself said in 2021 that once Starlink became “fairly predictable,” an IPO could be pursued, and in 2022, he indicated that this might occur “three to four years” from then.
Starlink generates nearly all of SpaceX’s profits, with its share of SpaceX’s projected $15.5 billion revenue in 2025 possibly reaching as much as 76%. If Starlink goes public instead of SpaceX as a whole, investors could still benefit from SpaceX’s cash-generating machine without the expensive burden of “colonizing Mars,” while the parent company could use the funds raised from the IPO to support Musk’s Mars plans.
Regardless of the final form of the IPO, Google’s 2015 investment will go down as one of the most successful venture capital bets in history.