SpaceX’s $150 Billion Question: How Chinese Investors Gain Access Despite Restrictions

A recent investigation by ProPublica, the non-profit US investigative agency, has uncovered that Elon Musk’s rocket company SpaceX permits Chinese investors to purchase shares—but only indirectly through offshore financial centers like the Cayman Islands.

Court Documents Expose Investment Strategy

Evidence from a Delaware court business dispute revealed SpaceX’s dual approach to Chinese investment. Court testimony from SpaceX CFO Bret Johnsen and major investor Iqbaljit Kahlon confirmed:

• SpaceX generally avoids direct Chinese investment due to its status as a defense contractor
• However, the company finds it “acceptable” when Chinese investors use offshore special purpose vehicles (SPVs)
• In 2021, SpaceX blocked a planned $50 million direct investment from a Chinese company while tacitly approving offshore investment channels.

The Offshore Investment Mechanism

“The main mechanism is that these investors invest through intermediary entities created by themselves or others,” Kahlon explained during proceedings. “Typically, they will set up a British Virgin Islands structure or a Cayman Islands structure or a Hong Kong structure and various other structures. Offshore structures can hide the identity of the actual investor.”

Kahlon, who claims close connections with SpaceX leadership and ownership of billions in SpaceX shares, acknowledged his investment company has served as an intermediary. Court documents show he repeatedly channeled Chinese money into SpaceX through Caribbean entities.

The Aborted Deal That Sparked Litigation

The court case originated from a failed 2021 transaction where a Chinese company attempted to purchase $50 million in SpaceX shares. According to testimony, the deal wasn’t unusual but attracted unwanted attention, prompting SpaceX executives to cancel it to avoid scrutiny from US regulators. Notably, there’s no public record of SpaceX undergoing review by the Committee on Foreign Investment in the United States (CFIUS).

Pattern Across Musk’s Companies

This isn’t isolated to SpaceX. A Financial Times investigation previously found Chinese investors have funneled tens of millions into Musk’s other ventures—including xAI and Neuralink—through similar SPV arrangements.

SpaceX: The Crown Jewel of Musk’s Empire

ProPublica notes SpaceX represents perhaps the most crucial component of Musk’s wealth. With an estimated 42% ownership stake worth approximately $150 billion, the publication remarked: “Even if he doesn’t do anything, he’s richer than Bill Gates.”