Reid Hoffman, co-founder of LinkedIn, criticized the artificial intelligence strategy of Space Exploration Technologies Corp. and the performance of xAI during a recent appearance on the Pioneers of AI podcast. Hoffman argued that SpaceX is not an AI company and suggested its recent acquisition of Cursor was an attempt to use its market capitalization to buy its way into relevance rather than demonstrating inherent capability. He characterized the company as a "premium-priced CoreWeave," referencing the cloud infrastructure provider.

Hoffman detailed significant challenges facing xAI, noting that all of its founders have departed and the company is on its "third restart." He described xAI's efforts to build foundational models as a "complete train wreck," a characterization he attributed to Elon Musk himself. These comments follow SpaceX's public listing on June 12, where AI featured prominently in its IPO narrative, and the subsequent announcement of the Cursor acquisition.

SpaceX has recently experienced extreme volatility, reportedly losing $1 trillion in market value in a single week. Despite this equity decline, the company successfully raised $20 billion in debt, indicating a divergence in sentiment between equity and credit investors. The stock has also drawn comparisons to meme stocks, with CNBC's Jim Cramer likening it to GameStop Corp.

AI Market Outlook

Despite his critique of SpaceX, Hoffman expressed optimism about the broader AI sector. He dismissed the idea that OpenAI and Anthropic are direct rivals, arguing the market is large enough for both to achieve substantial success. "There’s a lot of room for both of them to win incredibly," Hoffman stated. He also voiced concern over the U.S. government's decision to compel Anthropic to withdraw its Fable and Mythos models, criticizing the lack of a clear rationale behind the move.

Hoffman's comments come as he transitions away from corporate board roles to focus on his startup, Manus. He recently left Microsoft Corporation's board after nearly a decade and departed from OpenAI's board in 2023 to avoid conflicts of interest with his investments through Greylock Partners.

OpenAI Financials

Separately, OpenAI's confidential IPO filing has revealed significant financial losses. The company's net loss reportedly widened to about $39 billion in 2025 from $5 billion in 2024. However, its adjusted loss, excluding restructuring and other non-cash charges, was $8 billion. The company spent roughly $34 billion during the year, allocating $19 billion to research and development and nearly $6 billion to sales and marketing.

Space Exploration Technologies Corp. raised $25 billion through a senior unsecured notes offering weeks after securing approximately $86 billion in its initial public offering. The company intends to use the net proceeds to repay outstanding borrowings under its bridge loan facility in full, pay related fees and expenses, and allocate any remaining amount for general corporate purposes. The debt sale comprises five tranches with varying maturity dates and interest rates, reflecting a strategic move to manage liquidity following its blockbuster IPO.

Debt offering details

The offering includes a series of five notes. The first tranche consists of $7 billion in 5.350% Senior Notes due in 2031. Subsequently, SpaceX issued $6 billion in 5.650% Senior Notes due in 2033 and $6 billion in 5.875% Senior Notes due in 2036. The longer-term portions include $2.5 billion in 6.600% Senior Notes due in 2046 and $3.5 billion in 6.650% Senior Notes due in 2056. A senior unsecured note is a financing method not backed by collateral but often taking precedence over other debt obligations in the event of a company's liquidation.

Market reaction and valuation

The fundraising follows a period of significant volatility for SpaceX's stock. Investor Gary Black of The Future Fund LLC has expressed concerns regarding the company's valuation, arguing that investors overpaid for the stock post-IPO. Black drew comparisons to NVIDIA Corp, noting NVIDIA's lower valuation. SpaceX's market capitalization recently saw nearly $400 billion wiped out due to a stock decline. Economist Mohamed El-Erian noted that investors who bought at the IPO are up 23%, while those who purchased at the peak are down almost 25%.

SpaceX shares were up 0.54% to $156.94 during the after-hours trading session on Tuesday. According to Benzinga Edge Rankings, the stock does not currently provide a favorable price trend in the short, medium, or long term.