Google's Investment in SpaceX: A Paper Profit of $94 Billion and Hidden Risks
Google's decade-long bet on Elon Musk's company has yielded phenomenal results: a stake in SpaceX purchased in 2015 is now valued at approximately $94 billion. However, behind these numbers lies a complex story of restrictions and tax implications.
At first glance, this looks like another major investment by a tech giant, but it is actually a strategic decision made over a decade ago. In January 2015, Google, together with Fidelity, invested $1 billion in SpaceX, acquiring about 10% of the company. At that time, the entire SpaceX was valued at just over $10 billion, and the round was led by Google.
Over the years, SpaceX's value has multiplied. In June, the company went public at around $135 per share with a valuation of $1.77 trillion — the largest initial public offering in history. Google's stake has appreciated roughly 100 times. However, each new funding round diluted Google's share, and today it holds about 5% of SpaceX shares.
Why the market barely noticed this success
The appreciation of the SpaceX stake appeared in Google's second-quarter report: the revaluation added approximately $99 billion, bringing quarterly profit to $112 billion. Investments in the AI company Anthropic also contributed. However, there is almost no real cash behind these figures. Of the $9.11 earnings per share, $6.26 came from asset revaluation alone — without it, the quarter would have been ordinary. Additionally, the revaluation resulted in a $21.9 billion tax bill.
The market reacted cautiously. In the quarterly report, Google devoted just one line to the record profit and did not name any companies. By market close, shares had fallen by about 1.2%. Investors were more concerned with expenses: over three months, Google spent $44.9 billion on artificial intelligence and outlaid $5.9 billion more than it earned. Record investments in AI alarmed market participants — analysts had warned of this risk before the report was published.
Most of Google's SpaceX shares remain "frozen"
Google cannot yet sell this stake and freely use the funds. According to the report, $80 billion of the amount is locked up, and the rest will be unlocked later. The stock prices could lose their gains as quickly as they gained them. After the IPO, SpaceX shares soared above $200, but by July 23, they had fallen to around $114. The first lock-up expires in August — at the same time, SpaceX will report as a public company for the first time.
The $94 billion figure looks impressive, but it is only paper profit — and it cannot be disposed of yet. The real test will come after the lock-up ends, when Google gets the opportunity to sell. Until then, this remains an outstanding but virtual achievement.
My view: this story is a classic example of how early bets on technology leaders can yield enormous paper returns, but realizing them without losses is not always possible. For crypto investors, there is an important lesson here: liquidity and exit timing are just as significant factors as the idea itself.