According to ProPublicaAccording to reports, Elon Musk’s rocket and aerospace company SpaceX allows Chinese investors to buy shares, but the funds need to go through the Cayman Islands or other offshore centers.SpaceX is a Pentagon defense contractor, responsible for sensitive work such as building a classified spy satellite network. Investment from China raises national security concerns, because it could give foreign adversaries access to sensitive military technology, intelligence or supply chains. 

The knowledge of SpaceX's investment approach raises new questions about Musk's relationship with China, especially after reports emerged that the Pentagon briefed Musk on a possible war with China. The billionaire executive who has spearheaded cuts in federal spending has met regularly with Chinese officials to discuss his business interests. Tesla's Gigafactory Shanghai produces about half of Tesla's cars, and China accounts for a large (albeit decreasing) portion of its sales.

Details of how SpaceX allowed Chinese investors to take stakes in the company came to light during the testimony of its chief financial officer Bret Johnsen and major investor Iqbaljit Kahlon in a recent corporate dispute in Delaware.

The dispute centers on a failed 2021 deal with a Chinese company in which the company had planned to buy $50 million worth of stock. After the news became public, SpaceX executives withdrew from the deal to avoid potential issues with national safety regulators. 

Cuaron testified in December that SpaceX considered it "acceptable" for Chinese investors to take stakes in the company through offshore investment vehicles, which are often used to maintain investors' anonymity. 

Experts who spoke to ProPublica said this approach is concerning because it could be a sign that the company is taking active steps to conceal foreign ownership interests. It's unclear exactly why SpaceX did this; the company didn't immediately respond to a request for comment. 

While foreign investors are welcome to take passive, non-controlling stakes, the Trump administration has taken the position that adversaries such as China use covert investment strategies to gain access to technology, intellectual property and influence in strategic industries. As such, such investments are typically subject to review by the Committee on Foreign Investment in the United States (CFIUS).

There is no public record that SpaceX is under formal review by CFIUS. TechCrunch has reached out to CFIUS and SpaceX for more information. 

ProPublica's reporting follows a Financial Times investigation that found Chinese investors were using special purpose vehicles to quietly pump millions of dollars into companies controlled by Musk, including SpaceX, xAI and Neuralink.