Elon Musk torched a Wall Street Journal report that SpaceX showed investors a prototype AI handset, calling it "utterly false" in a post on X. But the denial landed after the story already moved markets, Qualcomm shares jumped as much as 3.4% on the prospect of powering the device, while SpaceX stock slid 7.9% to a session low.
The Journal reported, citing people familiar with the matter, that SpaceX privately showcased a handset-like AI prototype to stakeholders ahead of its record-breaking IPO. The device was described as thinner than an iPhone, running a proprietary operating system, integrating xAI technology, and powered by Qualcomm Snapdragon chips.
SpaceX told investors the design was still evolving and the company had not committed to commercial production.
Musk's rejection was characteristically blunt. "Utterly false," he wrote on X on July 1.
It's the second time this year he has shot down similar speculation, he stated "we are not developing a phone" after a Reuters report in February claimed SpaceX was working on a mobile device for Starlink connectivity. The Journal report landed the same day Wedbush analyst Dan Ives initiated coverage of SpaceX with an Outperform rating and a $190 price target. Ives called the company "one of the most differentiated assets within the tech market" and argued it is "positioned to become a major hyperscaler with its vertically integrated platform across connectivity, launch, and AI infrastructure."
The device speculation comes as SpaceX pushes deeper into mobile services. COO Gwynne Shotwell told investors the company is considering a terrestrial mobile phone service, the Financial Times reported last week.
Bloomberg reported the same day that SpaceX is in talks with Charter Communications about using the internet provider's ground infrastructure for phone traffic. SpaceX already partners with T-Mobile for direct-to-cell satellite service through Starlink.
SpaceX stock joins the Nasdaq-100 index on July 7, an unusually fast inclusion that JPMorgan estimates could draw roughly $4.3 billion in buying from index-tracking funds. The company absorbed xAI earlier this year, consolidating Musk's AI, social media, and aerospace holdings under one roof.
Musk has sent mixed signals on hardware for years. Last October he said building a phone made him "want to die," but added: "if we must do it, then we will do it."
The WSJ report cited sources saying Musk has long imagined a device uniting technologies from Tesla, SpaceX, and xAI. For now, his denial leaves investors weighing a detailed, sourced report against the CEO's unambiguous rejection.
