SpaceX insider says Chinese investors hold direct stakes, newly unsealed testimony reveals

Elon Musk’s SpaceX has received money directly from Chinese investors, according to deposition evidence unsealed this week in Delaware, the first public indication of direct Chinese ownership interests in the privately held aerospace group.

The testimony comes from Iqbaljit Kahlon, a long-time SpaceX investor and intermediary for secondary share sales, who stated under oath that some Chinese investors are “directly on the cap table”. The disclosure appears in records released after ProPublica petitioned the court to unseal exhibits in a dispute between Kahlon and another investor; SpaceX opposed the move, but a judge ordered portions made public.

SpaceX’s ownership structure is not publicly disclosed. Prior reporting documented indirect Chinese exposure via offshore vehicles that buy into funds holding SpaceX shares. The new material, however, points to direct holdings, which carry different implications for oversight, information rights and potential access to corporate updates.

There is no blanket ban on Chinese ownership of US defence contractors, but such investments are subject to scrutiny by the Committee on Foreign Investment in the United States (CFIUS) and related national-security processes. Legal specialists note that the level of risk turns on specifics such as investor rights and information access. SpaceX, a major supplier to the Pentagon and NASA and operator of the Starlink satellite network used by US agencies, has expanded rapidly across defence and intelligence launch and satellite programmes.

Court filings indicate that ProPublica, supported by the Reporters Committee for Freedom of the Press, sought access to sealed depositions and exhibits. Vice Chancellor J. Travis Laster subsequently ordered production of portions of deposition transcripts, video clips and certain unredacted exhibits shown at trial, establishing that materials displayed in open court fell under the right of access.

Kahlon’s deposition does not quantify the size of Chinese positions or identify investors. Separate records portray him as an early contact of SpaceX who built a business syndicating exposure to the closely held company for wealthy clients worldwide. The filings describe investors spanning multiple jurisdictions; names are redacted, but at least two addresses are in mainland China.

Earlier this year, ProPublica reported testimony that SpaceX permitted investment routed through offshore secrecy hubs, including the Cayman Islands, as an exception to its general preference to avoid mainland Chinese money given the firm’s defence work. That account drew political attention in Washington. In May, senior House Democrats wrote to Defence Secretary Pete Hegseth and NASA Acting Administrator Janet Petro requesting information about potential conflicts of interest and possible obfuscation of Chinese investment.

Bret Johnsen, SpaceX’s chief financial officer, previously testified that the company lacks a formal policy on investment from US-designated adversary countries, though he asks fund managers to avoid Russian, Chinese, Iranian and North Korean ownership interests because such links could complicate government contracting. Those remarks surfaced through the same Delaware litigation.

The newly unsealed testimony raises several immediate questions relevant to security regulators and contracting authorities:

• Scope and rights. Whether Chinese investors hold ordinary shares or interests with enhanced information or governance rights remains undisclosed. The risk profile differs markedly depending on rights to financial statements, briefings or site visits.

• Information flows. Prior evidence described some investors receiving quarterly updates and potential visit opportunities via intermediaries. Any non-public information about contracts or supply chains could be sensitive from a counter-intelligence standpoint, according to experts cited by ProPublica.

• Regulatory notifications. US rules require proactive filings only in limited circumstances. If offshore structures were used, the path of funds and the ultimate beneficial owners would likely be central to any review.

SpaceX did not respond to questions cited in the ProPublica report. Kahlon declined to comment. The company is not a party to the Delaware case but sought to keep certain materials under seal; Bloomberg Law reported in May that the court was weighing the unsealing bid, and in mid-September the court ordered partial disclosure.

The development arrives as SpaceX’s government portfolio grows. The firm is building national-security satellites and continues high-cadence launches for US defence and civil agencies. The latest disclosure on ownership will likely feed into ongoing congressional and executive-branch scrutiny of foreign stakes in sensitive suppliers.

What happens next will depend on whether regulators seek more detail about the investors, the size and structure of their holdings, and any associated information rights. The Delaware ruling ensures that at least part of the underlying record is now public. Additional filings, if released, may clarify how those direct stakes were established and whether they triggered review.

Trump Threatens to Cut Elon Musk’s Subsidies and “Send Him Back to South Africa” Amid New Feud