Newly unsealed court records reveal that a businessman with connections to Chinese military contractors was among the overseas investors who acquired stakes in SpaceX while it remained a private company. An entity linked to the Qatari royal family also took a position. The disclosures, obtained by ProPublica, highlight a sensitive issue for Elon Musk's rocket company: which individuals in countries like China bought into the firm and how they did so.
SpaceX has built its business on sensitive U.S. government contracts, including manufacturing spy satellites for the Pentagon. While Chinese investment in U.S. military contractors is not banned, it is heavily regulated. The U.S. government has alleged that China uses investments in sensitive industries for espionage and to access cutting-edge technology.
The company's initial public offering last week was the largest in history, making Musk the world's first trillionaire. Musk maintains extensive business interests in China, where Tesla manufactures many of its vehicles. Notably, SpaceX barred investors from China and Hong Kong from buying shares in its IPO due to what Bloomberg described as “regulatory and compliance risks.”
Investors from China and Russia
The records detail at least a dozen investors with addresses in mainland China, Hong Kong, or Russia who acquired stakes in SpaceX years ago through a U.S. middleman firm, Tomales Bay Capital. The investments, ranging from $800,000 to $40 million, were made between 2018 and 2021.
One investment came from an entity owned by David Su, co-founder of the prominent Beijing venture capital firm MPCi. Su's entity invested $15 million in a SpaceX fund in 2020, according to the investor list. This was not Su's only foray into the space industry; his company has been a high-profile backer of some of SpaceX's Chinese competitors.
Two satellite companies that Su's firm invested in were sanctioned by the U.S. government for allegedly assisting the Russian mercenary organization the Wagner Group. One of those companies was sanctioned again last month for allegedly helping Iran attack U.S. military forces during the war. MPCi has also worked with Chinese government investment funds; last year, the website for China's Ministry of Science and Technology named Su's firm as a partner in a state-backed effort to develop the country's aerospace industry.
There is no evidence that Su did anything improper. However, Sarah Bauerle Danzman, an Indiana University professor who has worked for the State Department scrutinizing foreign investments, said the key question from the U.S. government's perspective would be whether China-based investors gained access to nonpublic information about SpaceX's technology or strategies. “If an investor has conflicts of interests with other companies in China – if they could feed that information to competitors – it could be a national security concern,” she said.
In a statement, MPCi said that Su “has not received any nonpublic information of SpaceX.” The statement described Su as “a Singapore citizen who resides in Singapore,” adding: “MPCi is a brand name with different teams and funds. Mr. Su is responsible for the US dollar funds.” According to a 2024 profile, Su “spent almost 100 per cent of his time in China over the last 20 years.”
A lawyer for Tomales Bay Capital said in a statement that the firm “has not provided any non-public, sensitive information regarding SpaceX to investors.” He said the investors are passive limited partners: “Aside from fund financials that include quarterly valuations, Tomales Bay's investors have not received any further information regarding SpaceX.”
“The vast majority, if not all, of the investors included on the unsealed Tomales Bay investor list are not citizens of any foreign adversary, including Russia or China,” said the lawyer, Ryan Stonerock, “and certainly none of them are agents of Russia or China, or any other foreign adversary.” He added that some investors “may have mailing addresses listed” in Russia or China but do not actually live there “and are in fact citizens and residents of the United States or other countries that are not foreign adversaries.”
SpaceX did not respond to questions. One of the Chinese space companies sanctioned by the U.S. government, Spacety, previously denied providing support to the Wagner Group. All the investors located in China or Russia that ProPublica identified appeared to be either wealthy businesspeople or their children.
The documents emerged from a corporate dispute in Delaware involving Tomales Bay Capital. The court records were unsealed this month after ProPublica moved to make them public, with help from attorneys at the Reporters Committee for Freedom of the Press and the law firm Shaw Keller. Tomales Bay Capital appealed to the Delaware Supreme Court, which ruled in favor of ProPublica.
Tomales Bay Capital is run by investor Iqbaljit Kahlon, who has long been close to SpaceX's leadership and even involved in the company's operations. SpaceX CFO Bret Johnsen, who has worked there for 15 years, testified that Kahlon “has been with the company in one form or fashion longer than I have.” Before SpaceX went public, Kahlon made a fortune by acting as a middleman for investors hoping to add the rocket company to their portfolio. His firm regularly bought SpaceX stock, packaged it into investment funds, and charged fees to investors who bought pieces of those funds.
In a 2021 pitch to one potential investor in China, Kahlon promised special access to SpaceX, including quarterly updates on the company's business development, “visits to SpaceX, and the opportunities to interview with Space X's CFO,” according to meeting minutes that later appeared in court records.
This story underscores the complex web of cross-border investment in sensitive U.S. technology, particularly as China's military modernization accelerates and Washington tightens scrutiny of foreign capital flows. The case also highlights the challenges of enforcing investment regulations when middlemen and offshore entities obscure beneficial ownership.
