With a slightly different roll of the dice, in January 2024, Bill Gates would have become the world's first trillionaire when Microsoft's market cap hit $2.9 trillion. When Microsoft first went public, Bill owned 45% of the company's shares. Had he not been so aggressive in diversifying his net worth away from Microsoft (today, he owns less than 1.3% of the company), Bill easily could have owned 35%, and that would have made him a trillionaire.
On Tuesday, December 10, 2024, Elon Musk's net worth hit $400 billion for the first time. He is the first human ever to have a net worth of $400 billion. The very next day, his net worth rose to $450 billion. He is BY FAR the richest human being in history. The growth of Elon's fortune is absolutely stunning. Just five years ago, Tesla's entire market cap was $50 billion. Today, Tesla's market cap is $1.3 trillion. That begs the question – Where will Tesla be in five years? And perhaps more importantly…
What would it take for Elon Musk to become a trillionaire?
As we stated a moment ago, Elon Musk's net worth is currently $450 billion. Elon's fortune is built on two primary assets:
- #1) His 43% stake in the privately held SpaceX.
- #2) His 21% stake in the publicly traded Tesla. He directly owns 412 million shares of Tesla, roughly 13% of the company, and has another 304 million exercisable options.
SpaceX raised money earlier this month at a reported $350 billion valuation. Therefore, Elon's 43% stake is worth $150 billion.
As I type this article, Tesla has a market cap of $1.33 trillion. Therefore, Elon's 21% stake is worth $280 billion.
Wait a minute… $150 + $280 = $430 billion. So why is he currently worth $400 billion? The answer is complicated, but in short: debt. Elon has pledged a huge portion of his Tesla shares as collateral on billions of dollars worth of loans. Also, his investment in Twitter has been nothing short of a financial disaster. Elon took Twitter private in October 2022 at a valuation of $44 billion. He personally-guaranteed billions of dollars worth of debt to finance the transaction. Today, Twitter is worth less than $12 billion. Elon owns 79% of Twitter… which ya he renamed X… blah blah blah… no one calls it that.
(Photo by Maja Hitij/Getty Images)
What Would It Take To Hit $1 Trillion?
The following circumstances represent the most likely way for Elon Musk to become a trillionaire:
#1: Tesla's market cap hits $3.5 trillion. At that level, Elon's $21% stake would be worth $735 billion.
#2: SpaceX's value (either private or as a public company) hits $600 billion. Assuming he maintains a 40% stake at that level, his shares would be worth $240 billion.
Combined, his two stakes would be worth $975 billion. Rounding out for some debt and other assets, notably his new venture xAI, which just raised $6 billion at a $40 billion valuation, I think it's safe to say Elon would be a trillionaire.
A significant caveat is that all the net worth numbers we just mentioned are pre-tax. If Tesla and SpaceX continue to grow, Elon's pre-tax paper net worth will grow, but whenever he sells any shares, he'll have a capital gain and will owe the IRS a cut. If he decided to sell every single share of Tesla and SpaceX the day he hit $1 trillion… and if there was a market that could handle such a massive influx of shares for sale… Elon would end up with a net worth closer to $500 billion.
That said, in the scenario where SpaceX does grow to a $600 billion valuation AND Tesla grows to a $3.5 trillion valuation, Elon Musk will officially be the world's first trillionaire.
