Elon Musk becomes world’s first billionaire as SpaceX shares go public

Elon Musk became the world’s first billionaire on Friday.

The tech mogul hit the milestone when shares of his rocket company SpaceX opened on the stock market at $150, signaling a new era of ultra-wealth and widening wealth inequality.

Shares of SpaceX opened up 11 percent from their initial public offering of $135. Mr. Musk’s net worth — which includes his shares in SpaceX and his electric car maker Tesla, as well as equity stakes in other businesses including brain implant company Neuralink and the Boring Company tunneling company — was about $1.1 trillion.

Mr Musk, 54, has already been the richest man in the world. He received the title from Amazon founder Jeff Bezos in January 2021 after Tesla’s stock rose and his net worth exceeded $185 billion.

Since then, the South African-born entrepreneur’s fortune has more than quintupled in five-and-a-half years, during which he bought social media company Twitter, founded an artificial intelligence start-up, teamed up with SpaceX and then took the conglomerate public. During that time, Mr. Musk also spent more than $250 million to help elect Donald J. Trump and advise the president.

And Mr. Musk’s wealth creation has only accelerated, cementing his influence on society, culture and global politics. Since October, his net worth has doubled.

“The fact is that wealth for some and wealth inequality are growing at a scale we’ve never seen before,” said Steven Durlauf, director of the Stone Center for Research on Wealth Inequality and Mobility at the University of Chicago.

When oil magnate John D. Rockefeller’s fortune was at its peak in 1937, his $1.4 billion net worth was about 1.5 percent of America’s gross domestic product, Mr. Durlauf said. Mr Musk’s net worth is now equivalent to more than 3 per cent of US gross domestic product.

Such wealth is so extraordinary that it can be difficult to make meaningful comparisons. The median American household had a net worth of just under $200,000 in 2022, the year with the most recent data available from the Federal Reserve. That means Mr. Musk’s net worth is five million times that of a typical family.

His wealth exceeds even that of the everyday rich. The top 10 percent of households by income had an average net worth of $6.5 million in 2022, less than 0.001 percent of leader SpaceX’s total. The world’s second-richest person, Google co-founder Larry Page, is worth around $304 billion, according to the Bloomberg Billionaires Index.

Inequality is notoriously difficult to measure, but the explosion of wealth at the top is hard to dispute. Adjusted for inflation, the net worth of the middle 40 percent of households has grown by just over 50 percent over the past decade, according to the data by French economists Emmanuel Saez and Gabriel Zucman. The top 1 percent saw similar gains. But the richest 0.001 percent saw their wealth roughly double over the same period.

In addition to Mr. Musk, the ultra-rich also saw significant increases in their wealth. In 2016, a net worth of $100 billion — a mark Mr. Musk surpassed about six years ago — would easily put someone at the top of the Forbes list of billionaires. Today, $100 billion would rank them as the 20th richest people in the world.

“Christ, when I was a kid, all we talked about was millionaires,” said Bernie Sanders, 84, a progressive senator from Vermont. “If this isn’t an example of oligarchy, I don’t know what is.”

Mr. Musk’s rapid accumulation of wealth has largely come from the appreciation of his nearly 50 percent stake in SpaceX, which is worth more than $900 billion. During its IPO, the company sold more than 555 million shares, valuing it at $1.77 trillion, up from a $400 billion private market valuation last summer. Since January, SpaceX has also given Mr. Musk pay packages totaling 1.3 billion shares, which he cannot sell until he reaches certain operational milestones.

Mr. Musk did not respond to a request for comment. But he already admitted the billionaire milestone.

In February he replied to a post on X about possible billionaire status by noting that he has created significant wealth for shareholders and held less than 0.1 percent of his net worth in cash. in May he answered he X on the financial considerations of Peter Diamandis, a friend and SpaceX investor who said he would hit “$10,000 or bust.”

Mr Musk also recently said that in the future “money won’t matter” as Tesla and SpaceX develop robotics, artificial intelligence and rockets so powerful that no human will ever need to work again. In his utopian world of “awesome abundance,” everyone would have a “universally high income,” he said.

Mr. Musk’s allies said his net worth was justified by his impact, an example and incentive for those who want to build successful companies. Mr Diamandis, head of the XPrize Foundation, an organization that organizes competitions to promote scientific discoveries, said Tesla and SpaceX were “raising the floor”.

“The results of his work make him a trillionaire and uplift humanity,” Mr. Diamandis said.

Adeo Ressi, Mr. Musk’s roommate at the University of Pennsylvania, said the SpaceX chief was never as concerned with financial gain as he was with getting the resources to help him achieve his business goals. For Mr. Musk, “money is a means to an end,” Mr. Ressi said, likening his friend’s mindset to a player accumulating coins in a video game to beat a level.

“He’s gathering resources to do things, and what he wants to do most is colonize Mars,” Mr. Ressi said. “That’s a really big driver of his wealth accumulation.

He added that Mr Musk was “not the poster child for wealth inequality” and pointed to the tech leader’s lifestyle, in which he is known to work around the clock and eschew the trappings of the wealthy, such as islands and megayachts.

“It’s not like he’s planning to leave it in a massive family trust,” Mr. Ressi said. “It will literally be used to make humanity a multiplanetary species.”

But critics say the way Mr. Musk chooses to lead his life is irrelevant. His net worth has already given him the means to personally acquire companies and spend hundreds of millions of dollars to help elect a preferred presidential candidate, said Mr. Durlauf of the University of Chicago.

Becoming a trillionaire will only magnify how “economic inequalities spill over into the political sphere,” he added.

Mr. Sanders called Mr. Musk’s billionaire status a “moral travesty” and noted that 60 percent of Americans live paycheck to paycheck.

The senator also agreed with the assessment that Mr Musk probably had little interest in owning islands or yachts. In his opinion, the trillionaire was only interested in one thing.

“The guy is in power,” Mr. Sanders said. “And now he’s the most powerful person on Earth.