Musk denies report that SpaceX showed investors AI phone prototype

Elon Musk on July 1 called a Wall Street Journal report “utterly false” after it said SpaceX had shown investors a prototype of an AI-focused handset before the company’s public listing. The dispute matters because it cuts into what investors were told about SpaceX’s ambitions beyond rockets and satellite internet, and how much of the company’s next growth story rests on Musk’s wider hardware bet.

The Journal said the device was handset-like, built around a proprietary operating system, xAI technology and Qualcomm Snapdragon chips. It also said some investors were told the project was still at an early stage and might never become a finished product. SpaceX and Qualcomm did not immediately respond to requests for comment, leaving open whether the device was a serious product plan, a speculative pitch or one more experiment inside Musk’s expanding tech empire.

Musk has been feeding that speculation for months. In January, he said a Starlink phone was “not out of the question at some point,” while stressing that any such device would be very different from today’s smartphones. He also said it would be “optimized purely for running max performance/watt neural nets,” a description that points to AI-first hardware rather than a traditional app-based handset. Earlier this year, SpaceX was also reported to be planning a device connected directly to the Starlink constellation that could rival smartphones.

The timing makes the disclosure fight more sensitive. SpaceX priced its initial public offering on June 11 at $135 a share, began trading on June 12 under ticker SPCX, and closed the offering on June 15 after selling 638,888,888 shares, including the full exercise of the underwriters’ option. The company launched its roadshow on June 4 and filed Amendment No. 2 to its S-1 with the Securities and Exchange Commission on June 3.

That means the handset discussion is not just another Musk rumor cycle. It sits inside an IPO-era investor narrative for one of the market’s most watched private companies, one now backed by major banks including Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, JPMorgan Chase, Barclays, Deutsche Bank, RBC Capital Markets, UBS and Wells Fargo Securities. SpaceX has already broadened beyond launch services and satellite internet, and the latest clash over the phone prototype shows how little outsiders may know when Musk is still shaping the next layer of the story.