According to sources cited by Bloomberg on Friday, June 5th, the space exploration technology company SpaceX is expected to raise up to $75 billion in its initial public offering (IPO), rejecting investors from China and Hong Kong due to concerns over U.S. restrictions on the export of key technologies.
Sources indicated that Goldman Sachs and Morgan Stanley, the main organizers overseeing the transaction, have instructed other members of the underwriting team not to allow clients from mainland China and Hong Kong (including private banking clients) to place orders for this issuance, citing regulatory and compliance risks.
It was mentioned by some sources that the decision to exclude investors from mainland China and Hong Kong was based on guidelines from the U.S. International Traffic in Arms Regulations (ITAR), which impose strict distribution restrictions on the aforementioned jurisdictions.
SpaceX launched its roadshow for the IPO in New York on Thursday and published IPO-related documents on its official website. Reuters investigations show that on Friday, the official website of SpaceX and its IPO marketing materials were inaccessible in Hong Kong and mainland China. Attempts to access them would result in error messages indicating that the company has prohibited access from IP addresses in these regions.
Originally a rocket startup, SpaceX has now become a massive bet for global investors on satellites, artificial intelligence (AI), and Mars. With an estimated overall valuation of at least $1.8 trillion, SpaceX’s IPO, expected to raise up to $75 billion, is not only setting a historic record but could also reshape the global capital market.
In recent years, U.S. tech and AI companies have become increasingly cautious when accepting funds from Chinese investors, reflecting stricter scrutiny from regulatory agencies and clients regarding potential national security and data security risks. Companies seeking government contracts or operating in sensitive areas typically do not want investors in their shareholder structure who could trigger scrutiny from U.S. authorities or cause concerns for potential clients.
This shift contrasts sharply with the past decade when Chinese venture capital firms, private equity funds, family offices, and wealthy individuals were active investors in Silicon Valley startups. Many participated in investments through offshore Special Purpose Vehicles (SPVs) and multi-layered fund structures, masking the ultimate source of funds.
As concerns grow about Chinese infiltration into sensitive U.S. technology sectors, U.S. politicians have launched a vigorous counterattack against such “hidden ownership.” Senators Elizabeth Warren and Andy Kim wrote to Secretary of Defense Pete Hegseth on February 5, requesting a national security review of aerospace giant SpaceX.
According to information obtained by Reuters, Chinese-related investors are reportedly using entities in the Cayman Islands and British Virgin Islands to transfer funds through layered holding structures to circumvent internal background checks at SpaceX and secretly acquire shares of the rocket manufacturer.
Currently deeply involved in U.S. defense infrastructure, SpaceX plays a core role in launching military and intelligence satellites and operating the Starlink communication network. Additionally, SpaceX officially acquired AI company xAI in early February, with Elon Musk publicly describing the entity as a “vertical integration innovation engine” covering AI, rockets, and satellite internet, making security investigations more urgent.
Lawmakers are concerned that any level of Chinese ownership could trigger federal regulations on Foreign Ownership, Control, or Influence (FOCI), posing a potentially lethal threat to U.S. military and intelligence infrastructure.
As geopolitical tensions between the U.S. and China escalate, founders and underwriters are increasingly stringent in screening shareholder lists before going public, with some tech companies even voluntarily reducing or completely avoiding Chinese ownership. This is also a deep-rooted main reason for SpaceX closing its doors to capital from China and Hong Kong in its IPO.