SpaceX's Quiet Chinese Investors: Military-Linked Backers, Qatari Royals, and a Middleman Who Promised CFO Access
SpaceX barred Chinese and Hong Kong investors from participating in its IPO last week over 'regulatory and compliance risks.' Sensible enough. Less sensible, apparently, was the years of quiet Chinese investment that preceded it.
A ProPublica investigation, drawing on a private investor list prised out of Delaware courts, has identified more than a dozen investors with addresses in mainland China, Hong Kong, or Russia who bought into SpaceX between 2018 and 2021. The conduit was a US-based firm called Tomales Bay Capital, run by an investor named Iqbaljit Kahlon who had unusually cosy ties to SpaceX's own leadership.
Among the names on the list is David Su, co-founder of Beijing venture capital firm MPCi. An entity he owns invested $15 million in a SpaceX fund in 2020. Su's firm has also backed several of SpaceX's Chinese rivals, two of which were subsequently sanctioned by the US government for allegedly supporting Russia's Wagner Group. One of those companies was sanctioned again last month, this time for allegedly helping Iran attack US military forces. Su also has ties to Chinese government investment bodies; China's Ministry of Science and Technology named his firm as a partner in a state-backed aerospace development initiative.
MPCi insists Su 'has not received any nonpublic information of SpaceX' and describes him as a Singapore citizen based in Singapore. A 2024 profile of Su noted he had spent 'almost 100 percent' of his time in China over the previous two decades. Make of that what you will.
The core concern here is not whether anyone broke the law. There is no blanket ban on Chinese investment in US defence contractors. The issue is subtler: whether investors with competing interests in China's aerospace sector could have extracted useful intelligence about SpaceX's technology or strategy, even informally. Sarah Bauerle Danzman, an Indiana University professor with State Department experience reviewing foreign investments, put it plainly: if an investor has conflicted loyalties and could feed information to competitors, that is a national security problem.
Kahlon's firm makes that concern more acute. According to documents from the Delaware case, Tomales Bay pitched at least one Chinese investor in 2021 with an offer of quarterly business updates, SpaceX facility visits, and the opportunity to interview the company's CFO. SpaceX CFO Bret Johnsen, who has worked there for 15 years, testified that Kahlon had been involved with the company 'longer than I have.' That is a remarkable level of access for someone who was simultaneously packaging SpaceX equity into funds and flogging slices of them to overseas investors.
Tomales Bay's lawyer says investors received only standard fund financials and no sensitive SpaceX information. He also argues that most investors on the list, despite their listed addresses, are not actually citizens of foreign adversary states.
The list extends well beyond China. Records show funds linked to Bracket Capital, an investment firm with a presence in Qatar, put around $48 million into SpaceX deals between 2017 and 2020. In an email to SpaceX's CFO, Kahlon described Bracket as having money from the Qatari royal family. A separate entity listing Doha as its address invested a further $10 million in 2020. In 2021, Kahlon texted a Bracket employee about sending 'Yalda to talk to big guy' for 'a bail out.' Bracket has not responded to requests for comment, so the context remains murky.
Then there is HAL9001 Partners Fund I, a Delaware LLC that put roughly $10 million into SpaceX in 2020. Its incorporation documents were signed by venture capitalist Roman Sobachevskiy, whose co-owned company was recently fined hundreds of millions of dollars by the Treasury Department for managing investments on behalf of a sanctioned Russian oligarch. Sobachevskiy has not been personally accused of wrongdoing, and Tomales Bay says the oligarch had no involvement in the SpaceX investment. Sobachevskiy has not responded to questions about who actually provided the money.
The ledger also names some entirely unsurprising figures: former US Education Secretary Betsy DeVos, Indian politician Abhishek Singhvi, and various offshore entities belonging to Indonesian billionaires.
What ties it all together is SpaceX's apparent acceptance of Chinese capital so long as it arrived via the Cayman Islands or similar offshore structures, a detail that emerged from Delaware court testimony reported by ProPublica last year. Strip away the offshore layering and you still had Chinese money in a company building spy satellites for the Pentagon.
The investments were small relative to SpaceX's overall capitalisation, but they would have been spectacularly lucrative. SpaceX's valuation has climbed from $33 billion in 2019 to $2.7 trillion following last week's IPO, the largest in history. Musk is now, according to various estimates, the world's first trillionaire.
SpaceX did not respond to questions.