Musk calls 'utterly false' WSJ report that SpaceX showed AI handset prototype before IPO

The WSJ report and Musk's denial

The Wall Street Journal reported on Wednesday that SpaceX showed investors and stakeholders a prototype of a handset-like AI device before its blockbuster initial public offering in June. Citing people familiar with the matter, the Journal said the device was slimmer than an iPhone and designed to run on a proprietary operating system, using Qualcomm Snapdragon chips and AI technology from xAI. SpaceX chief Elon Musk denied the story on X the same day.

Utterly false.

The denial was brief and did not address any specific element of the report. SpaceX and Qualcomm did not respond to requests for comment.

What the prototype reportedly looks like

According to the Journal's sources, the prototype was described as sleek and thin enough to be described as phone-like, though its exact form factor remains unclear. The device would integrate xAI's Grok assistant directly, bypassing the Android and iOS ecosystems entirely. That architecture would allow SpaceX to avoid platform fees and app-store rules, a strategy other companies such as Meta have pursued with their own hardware projects. SpaceX reportedly told investors the project was at an early stage and the design could still change, with no guarantee of eventual mass production.

SpaceX's wireless ambitions

The prototype sits inside a broader push by SpaceX to become a wireless carrier. The company recently signaled plans to sell Starlink phone service directly to US consumers, setting up a potential challenge to Verizon, AT&T and T-Mobile. It has acquired wireless spectrum from EchoStar for $17 billion and, according to the Financial Times, COO Gwynne Shotwell told investors the company is considering launching a mobile service in the US. Some analysts have even speculated that SpaceX could acquire T-Mobile or AT&T, though such a deal would be expensive.

Musk has previously dismissed the idea of building a phone, saying during an event in Pennsylvania, "the idea of making a phone makes me want to die," but added, "if we have to make a phone, we will, but we will aspire not to make a phone." A SpaceX spokesperson said in February that the company was "not developing a phone" after Reuters reported plans for a Starlink-connected mobile device.

A crowded AI hardware race

If the WSJ report is accurate, SpaceX would be entering a space already crowded with ambitious startups and established players. OpenAI is working with former Apple design chief Jony Ive on an AI device that CEO Sam Altman has described as more serene than a traditional smartphone.

More peaceful than an iPhone.

OpenAI recently hired Paul Meade, the Apple vice president who led Vision Pro hardware engineering, to join Ive's team. The company is targeting mass production of an AI agent smartphone with Qualcomm and MediaTek by 2028. However, the graveyard of AI hardware failures is hard to ignore, Humane's AI Pin was permanently bricked in early 2025 after fewer than 10,000 units were sold, and the Rabbit R1 attracted 100,000 pre-orders but retained only about 5,000 active users after five months. Whether SpaceX is genuinely planning a consumer device or merely testing investor appetite remains an open question.