Elon Musk has told banks, law firms and auditors competing for roles on SpaceX’s upcoming initial public offering that they need to purchase subscriptions to Grok, the AI chatbot built by his xAI subsidiary.
What’s Going On?
As per reports, some banks have already agreed to spend tens of millions of dollars per year on Grok and have started integrating the chatbot into their internal IT systems. Musk also asked the banks to advertise on X, his social media platform, though he was reportedly less insistent on this request compared to the Grok requirement.
Five banks are expected to serve as lead bookrunners on the deal: Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley. Law firms Gibson Dunn and Davis Polk are advising on the listing. The broader syndicate numbers at least 21 banks, including Barclays, Deutsche Bank, UBS, Macquarie and Wells Fargo.
SpaceX has filed confidential IPO paperwork with the U.S. Securities and Exchange Commission and is targeting a Nasdaq listing as early as June 2026. The company raised its target valuation above $2 trillion, which would make this the largest stock market listing on record, surpassing Saudi Aramco’s $29 billion debut in 2019. SpaceX aims to raise between $50 billion and $75 billion. Estimated underwriting fees on a deal this size sit at roughly 2%, placing the total around $1 billion.
The Grok requirement turns the IPO process into a distribution channel for xAI’s commercial product. SpaceX completed an all-stock acquisition of xAI in February 2026, valuing xAI at $250 billion and folding both the Grok chatbot and the X social network under the SpaceX corporate umbrella. Grok currently ranks fourth in the AI chatbot market, behind ChatGPT, Claude and Gemini. Forced institutional purchases from a 21-bank syndicate would improve Grok’s enterprise revenue figures right before SpaceX files its prospectus for public investors to review.
Some Preview Since Musk Took Over
In 2025-26, X has struggled with declining ad revenue and user numbers since Musk acquired the platform in 2022. Data reported under the EU Digital Services Act showed X’s usage in Europe fell by 15% in the second half of 2025. Musk has previously taken legal action against brands that reduced their ad spending on X. SpaceX itself has become a major advertiser on the platform, which raises additional questions about how the company reports its financials ahead of the IPO.
The banks view the Grok subscriptions as a cost of doing business. Against potential fees of $350 million for the five lead bookrunners alone, a few million in AI subscriptions amounts to a rounding error. The arrangement has no clean precedent in recent IPO history, but private companies hold wide latitude in selecting their advisers and setting terms.
