Musk Ally Gracias Eyes Bets in AI, Energy After SpaceX Windfall

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(Bloomberg) — Antonio Gracias, a long-time SpaceX board member, is looking for more investments in artificial intelligence, energy and space after bets in Elon Musk’s company netted his fund nearly $100 billion.

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Gracias told investors in his Valor Equity Partners fund that he’s now following several other startups founded by former SpaceX engineers, and would like to invest in businesses that are involved in the space ecosystem if they can work and complement Musk and SpaceX’s mission over time, he said during a private call last month. 

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He is also looking at AI and energy startups, the Valor founder added in the previously unreported remarks.

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Gracias is so bullish on SpaceX and its future that he told investors in his funds that he would rather not sell SpaceX shares to pay them out. Gracias would instead prefer to distribute the firm’s SpaceX investment “in kind,” meaning he would dole out shares in the rocket company in lieu of cash. 

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Valor has invested $5.8 billion in SpaceX over several years, Gracias added. That may include money for the social network X and AI lab xAI. Valor had previously told investors in the firm that they would allocate at least 10% of its funds to SpaceX.

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“SpaceX is quintessentially a Valor company, it’s aligned with our mission to make the world better,” Gracias said on the call with his firm’s investors, according to people familiar with his comments. 

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He plans to keep his own shares in SpaceX “as long as I can,” he continued, saying he believes in the business and wants to be part of it for the future, for his children and grandchildren. 

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Conversations around distributions are ongoing and details may change. A Valor spokesperson did not reply to a request for comment. 

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Gracias, one of Musk’s staunchest allies, made the remarks almost a week after SpaceX debuted as a public company in a record IPO that marked a new era for investors and firms that bet on Musk and the space industry. Gracias is certainly among them, with Valor owning roughly 4% of the company at IPO, a stake that was worth approximately $97 billion on June 15, days before the call was held. 

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That success has fueled interest in other space and AI-related bets. 

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“We are looking for these parallel businesses that we will continue to scale,” he said, noting that investing in the space and AI ecosystem is now more capital intensive, which bodes well for firms like Valor that are hands-on. The firm is already raising a new $2.5 billion fund with a portion of that allocated for SpaceX shares, Bloomberg reported.

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Valor is known for focusing on its portfolio companies’ operational growth by lending personnel and resources to help them expand.

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Gracias has backed Musk for decades, becoming an institutional investor in Tesla Inc. in 2005 and backing SpaceX shortly after. Valor and its partners have helped Musk operate his business empire ever since. Gracias was previously on the board at Tesla, and helped Musk with his chaotic takeover of Twitter in 2022. More recently, Jon Shulkin, another Valor partner, temporarily stepped in as chief revenue officer at xAI to improve sales. 

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Musk has made a point of singling out Gracias for his role in developing the trillionaire’s empire. “Antonio’s ownership stems from absolute support, even when it looked like SpaceX would fail, and many investments over 2 decades,” Musk wrote in a June 6 post on X. 

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Valor has invested in SpaceX through equity fundraising rounds, but has also helped the firm get access to Nvidia Corp. chips by raising as much as $20 billion in financing for AI infrastructure.

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—With assistance from Rebecca Torrence.

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