120-fold return, tens of billions of dollars in floating profits. It turns out that it is the hidden big winner of SpaceX's listing.

A controversial venture capital investment made a decade ago is evolving into one of the most profitable bets in Silicon Valley's history.

As SpaceX announced the acquisition of the artificial intelligence company xAI and integrated its vast business landscape, a major external shareholder, previously in the shadows, is now reaping huge rewards from this capital feast.

According to an earlier article from Wall Street Insights, SpaceX, under Elon Musk, completed the acquisition of the artificial intelligence company xAI, with a transaction value as high as $250 billion. This not only created the world's most valuable private technology entity but also paved the way for SpaceX's IPO with a targeted valuation of $1.5 trillion.

Such large - scale wealth creation is bound to produce a hidden king.

It is Google.

For Google, which holds approximately 7.4% of SpaceX's shares, this initial investment of only $900 million could see its book value soar to $111 billion, with a return on investment of over 120 times.

Coupled with its 14% stake in Anthropic, this tech giant has quietly secured double dividends in the fields of space infrastructure and cutting - edge artificial intelligence without directly bearing the operational risks.

The bold bet a decade ago pays off

Back in January 2015, when Google and Fidelity jointly invested $1 billion in SpaceX (with Google contributing about $900 million), the market was full of doubts.

At that time, SpaceX was valued at only $12 billion. The Falcon 9 had not achieved regular recovery, and Starlink was still just a concept. Musk was spending huge amounts of money to prove the feasibility of reusable rockets.

The Wall Street Journal was skeptical about this investment at the time, pointing out that "a major technical and financial challenge for the project is the cost of installing ground antennas and computer terminals to receive satellite signals" and questioning "how SpaceX plans to transmit internet signals to Earth, as the company is not considered to control the rights to the radio spectrum."

However, Google saw a huge opportunity: a company with an effective monopoly in the field of large - scale space launches, a founder with unwavering belief, and a business model that was becoming increasingly valuable as the global demand for data and computing exploded.

As Starlink evolved from a PowerPoint presentation to a real - world application and rocket recovery technology matured, SpaceX's valuation curve showed an almost vertical increase - from $36 billion in 2020 to $350 billion by the end of 2024, and aiming for an IPO valuation of $1.5 trillion.

According to Bloomberg's data analysis, if SpaceX goes public as planned with a valuation of $1.5 trillion, the value of Google's shares will skyrocket from the initial investment of $900 million to approximately $111 billion. This means that for every dollar Google invested, it will receive a return of about $123.

Earlier last year, Google's financial report recorded a gain of $8 billion from "non - marketable equity securities." Bloomberg confirmed that this gain came from the revaluation of SpaceX's shares, accounting for 25% of Google's net profit in the first fiscal quarter.

It is worth noting that this potential gain of $111 billion was completely hidden from ordinary observers before, because as a private company, Google's shares in SpaceX have basically remained on its balance sheet at cost for the past decade.

However, once SpaceX goes public, this $111 - billion position will become a reality and will appear in the financial report, fundamentally changing people's perception of Google's investment value. For a company with a market capitalization of $4.1 trillion and a nearly 70% increase in its stock price in the past year, this will still be a huge catalyst.

A possible variable: Starlink's separate listing

It is worth noting that Musk has repeatedly stated that he will not take SpaceX public until the Mars colonization transportation system is in regular operation because the Mars colonization plan may not be profitable for years or even decades, making it difficult to gain the support of public - market shareholders.

However, Musk has also mentioned several times the possibility of taking SpaceX's Starlink satellite internet subsidiary public separately.

SpaceX's Chief Operating Officer, Gwynne Shotwell, confirmed in 2020 that "Starlink is the right type of business for us to take public." Musk himself said in 2021 that once the Starlink business becomes "fairly predictable," an IPO might be considered, and in 2022, he said it could happen "in three or four years."

Starlink currently generates almost all of SpaceX's profits and may account for up to 76% of SpaceX's $15.5 - billion revenue in 2025.

If Starlink, rather than SpaceX as a whole, goes public in the end, investors can still own SpaceX's cash - generating machine without bearing the high cost of "colonizing Mars," and the parent company can use the funds raised from the IPO to finance Musk's Mars colonization plan.

Regardless of the final form of listing, Google's investment in 2015 will become one of the most successful venture capital investments in history.

This article is from the WeChat official account "Wall Street Insights." Author: Bu Shuqing. Republished by 36Kr with permission.