Elon Musk’s SpaceX has accepted direct investments from Chinese investors, according to newly unsealed testimony from a major shareholder in a Delaware court case. The revelation, reported by ProPublica on October 2, 2025, marks the first public confirmation of such funding in the privately held company, which serves as a key US military contractor. For national security experts, investors, and tech policy analysts searching SpaceX Chinese investors direct, Musk SpaceX China funding, or SpaceX national security risks 2025, investor Iqbaljit Kahlon stated under oath that “they obviously have Chinese investors to be honest,” with some “directly on the cap table.” While no prohibition exists on such ownership, the US government views Chinese investments in sensitive industries as potential espionage risks, prompting scrutiny from agencies like CFIUS. SpaceX has not commented, but the testimony—uncovered in a dispute over a failed 2021 deal involving a $50 million Chinese stake—suggests closer ties than previously known indirect investments via offshore funds like those in the Cayman Islands.
This disclosure, amid SpaceX’s $400 billion valuation and Starship progress, amplifies concerns over foreign influence in US defense tech.
The Court Testimony: Direct Chinese Stakes Confirmed
The details emerged from a Delaware Chancery Court case involving SpaceX investor Iqbaljit Kahlon, who acted as a middleman for wealthy clients. In a 2024 deposition unsealed in September 2025, Kahlon confirmed direct Chinese investments, stating some investors are “directly on the cap table”—the company’s shareholder ledger. Previously, SpaceX was known to accept indirect Chinese funds through Cayman Islands vehicles, but Kahlon’s testimony indicates unmediated stakes, raising red flags for a firm handling classified Pentagon contracts like Starlink for Ukraine.
- Kahlon’s Role: A SpaceX insider and deal facilitator, he routed Chinese money offshore to bypass scrutiny.
- 2021 Deal: SpaceX halted a $50 million direct Chinese purchase after media exposure, opting for secrecy hubs.
- No Alleged Violations: Documents show no law breaches, but CFIUS monitors such investments closely.
National security expert Sarah Bauerle Danzman noted: “The US government has asserted that China uses investments in sensitive industries for espionage.”
| Investment Type | Known Before | New Revelation | Security Concern |
|---|---|---|---|
| Indirect (Offshore Funds) | Yes | N/A | Limited Access |
| Direct (Cap Table) | No | Confirmed | Potential Espionage |
National Security Implications: A Sensitive Issue for SpaceX
SpaceX, valued at $400 billion and a major Pentagon partner (e.g., spy satellites), is subject to CFIUS review for foreign investments. Direct Chinese stakes could grant access to sensitive info, fueling espionage fears. SpaceX CFO Bret Johnsen confirmed the company’s “policy of obfuscation” via offshore vehicles to minimize scrutiny.
- CFIUS Scrutiny: The Committee on Foreign Investment in the US reviews such deals; SpaceX’s military contracts amplify risks.
- No Violations: No evidence of law-breaking, but experts call for transparency.
Musk’s Response and Broader Context
Musk has not publicly addressed the testimony, but SpaceX’s secrecy around its cap table—private since 2002—fuels speculation. The company has raised $10 billion+ from investors like Founders Fund and Google, but Chinese stakes add geopolitical tension amid US-China rivalry.
This follows a Financial Times report on Chinese funds buying indirect SpaceX shares via Cayman vehicles, with SpaceX halting a 2021 $50 million direct deal after media scrutiny.
Conclusion: SpaceX’s Chinese Ties Under the Microscope
The revelation of direct Chinese investments in SpaceX via court testimony raises valid national security flags for a key US contractor. While legal, the opacity invites questions. For SpaceX watchers, it’s a vulnerability—will CFIUS probe, or stay silent? The rockets rise amid scrutiny. newsbytes
