Wealthy Chinese investors have discreetly funnelled tens of millions of dollars into private companies controlled by billionaire Elon Musk, according to a report by the Financial Times on Sunday. The investments are being made through special-purpose vehicles (SPVs), shielding the identities of Chinese investors from public scrutiny while bypassing regulatory concerns in the United States.
Avoiding US scrutiny through SPVs
With US-China relations at a low point, Chinese capital faces increasing resistance in American markets. Many US authorities and companies remain wary of Chinese investments due to security concerns. To circumvent these restrictions, investors are using SPVs—investment structures designed to obscure their direct involvement—allowing them to participate in Musk’s ventures without drawing regulatory ire.
Investments in SpaceX, xAI, and Neuralink
Three Chinese-backed asset managers revealed that they have collectively sold over $30 million worth of shares in SpaceX, xAI, and Neuralink over the past two years. These three companies, all under Musk’s leadership, are at the forefront of technological advancements in space exploration, artificial intelligence, and neuroscience.
Sources involved in the transactions emphasised that the primary motivation behind these investments is financial gain rather than technology transfer or policy influence. However, Musk’s longstanding interactions with top Chinese officials, including President Xi Jinping, raise questions about the implications of these financial ties.
While Tesla manufactures and exports vehicles from China, other Musk ventures—such as SpaceX and X (formerly Twitter)—are viewed by Beijing as security risks. The increasing presence of Chinese capital in Musk’s businesses adds another layer of complexity to the already intricate relationship between the entrepreneur and China.
Neither SpaceX, xAI, nor Neuralink has commented on these investment revelations.
(With Reuters inputs)