Elon Musk’s SpaceX has allegedly allowed Chinese investors to acquire stakes in the company by routing funds through offshore entities like the Cayman Islands, as reported by ProPublica. This revelation raises concerns about national security due to SpaceX’s role as a Pentagon contractor, working on classified defense projects, including a spy satellite network.

The potential involvement of Chinese investors in a company managing sensitive military technology has sparked fears about exposure to intelligence, supply chains, and critical U.S. assets. The report also brings renewed scrutiny to Musk’s business ties with China, particularly following reports that the Pentagon has briefed him on potential military conflicts involving the country.

Musk has frequently engaged with Chinese Communist Party officials, largely due to Tesla’s strong presence in China. The Shanghai gigafactory remains one of Tesla’s most significant production hubs, manufacturing nearly half of the company’s vehicles. While Tesla’s sales in China have declined, the market continues to be a vital component of its global operations.

Details about SpaceX’s investment structure surfaced through testimony from its CFO, Bret Johnsen, and investor Iqbaljit Kahlon during a corporate dispute in Delaware. The case revolved around a 2021 transaction in which a Chinese firm attempted to purchase $50 million in SpaceX stock. When the deal became public, SpaceX executives withdrew to prevent potential issues with national security regulators.

During testimony in December, Kahlon confirmed that SpaceX considers it “acceptable” for Chinese investors to acquire stakes through offshore investment vehicles. These financial structures, commonly used to obscure investor identities, raise questions about whether SpaceX is intentionally concealing foreign ownership interests. Despite the controversy, the company has not released an official statement.

Security analysts warn that foreign entities, particularly from China, may use hidden investments to obtain critical technology and influence key industries. The U.S. government typically reviews such investments through the Committee on Foreign Investment in the United States (CFIUS). However, there is no public record of SpaceX undergoing a formal CFIUS investigation.

ProPublica’s findings align with a previous Financial Times investigation, which revealed that Chinese investors have been discreetly funneling millions into Musk-controlled companies, including SpaceX, Neuralink, and xAI, through special-purpose investment vehicles. These developments have intensified concerns about foreign influence in strategic U.S. industries.

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This article was created with AI assistance.