Wealthy Chinese investors have been secretly investing tens of millions of dollars into private companies controlled by billionaire entrepreneur Elon Musk. These investments are being made through complex financial structures that help keep the identities of the investors hidden from public view. The money is flowing into some of Musk’s most valuable private companies, including SpaceX, xAI, and Neuralink.
This hidden investment process has been promoted by asset managers in China who are using Musk’s connection to former U.S. President Donald Trump as a selling point to attract wealthy Chinese individuals. Since Musk has played an important role in U.S. politics and business, some investors see his companies as a good opportunity for high returns.
How Chinese Investors Are Hiding Their Identities
To avoid attracting attention from U.S. authorities, these Chinese investors are using financial tools called special-purpose vehicles (SPVs). SPVs are investment structures that allow multiple people to pool their money into a single entity, which then buys shares in a company. Since the SPV is registered in offshore locations like the Cayman Islands, the names of the individual investors remain hidden.
Although using SPVs is completely legal, it raises concerns about transparency and potential influence over Musk’s businesses. Given his deep involvement in U.S. government projects, including military contracts with SpaceX, some experts worry that these secret investments could pose security risks.
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Despite these concerns, investment managers say that Chinese investors are mainly interested in making a profit rather than influencing U.S. policies. With China’s economy slowing down, many wealthy Chinese are looking for opportunities to invest their money abroad. Since Musk’s companies are growing rapidly, they see them as a safe bet.
The Scale of Chinese Investments in SpaceX, xAI, and Neuralink
The full amount of Chinese money flowing into Musk’s business empire is difficult to track because of the hidden nature of the investments. However, according to asset managers involved in these deals, Chinese investors have poured at least $30 million into SpaceX, xAI, and Neuralink over the past two years alone.
Since its founding in 2002, SpaceX has raised more than $10 billion from global investors. Many Chinese investors believe that the company’s value will continue to rise, especially because of its strong ties to the U.S. military. During private investment pitches, asset managers have told Chinese investors that SpaceX’s valuation could triple to $1.1 trillion within three years.
Some investors who got in early have already seen huge returns. For example, in 2018, a group of Chinese investors bought SpaceX shares through a fund managed by a company called Homaer Financial. Six years later, they sold their shares for a 530% profit. Encouraged by these gains, more Chinese investors have started looking for ways to buy stakes in Musk’s companies.
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Why U.S. Companies Are Cautious About Chinese Investments
U.S. companies remain cautious about taking direct investments from China. SpaceX, in particular, has avoided public ties with Chinese investors due to its connections with the U.S. government. In 2021, a Chinese company called Leo Group tried to invest $50 million in SpaceX through a U.S. private equity fund. When the deal became public, the U.S. fund canceled the transaction, fearing backlash from SpaceX.
To get around such problems, Chinese investors now rely on hidden SPV structures. These vehicles allow their money to enter Musk’s companies through Western private equity funds, making it impossible to see Chinese ownership in public records. Some SPVs even include exit clauses that require U.S. partners to sell the investments in case of a political crisis, such as a military conflict between the U.S. and China.
Even with these risks, demand from Chinese investors remains strong. Some wealth managers have found ways to bypass China’s strict capital controls, allowing more investors to take part in these deals.
With a slowing domestic economy and fewer profitable opportunities at home, many wealthy Chinese believe investing in Musk’s companies is a smarter move than putting their money into China’s uncertain business environment.
