There was never anything straightforward about the SpaceX story. From the outset it has been high-profile, high-risk and hugely consequential, both commercially and societally. It is therefore unsurprising that the IPO generated strong, often polarised views.
Some see a generational growth story finally opening to public investors; others see a company whose governance and risk profile should make markets shudder.
That debate is healthy. It is exactly what public markets are supposed to enable.
But that is not the most important part of this story. The more significant development happened in the background. Index providers moved quickly to allow early inclusion of SpaceX, accelerating what would historically have been a more measured process.
The consequence was simple: vast amounts of capital has now followed, automatically and indiscriminately.
Who benefits?
That may suit those selling.
It is less clear it serves those buying.
Active investors can make their own call. They can look at the governance, the valuation, the concentration of control—and decide whether to take the risk. And it is a risk. In many ways, buying into something like this at IPO is little different from placing a bet. Sometimes it pays off, sometimes it doesn’t. As the Financial Times put it: no crying at the casino.
But passive investors are not playing that game. They are not choosing to buy SpaceX. They are being required to.
That distinction matters more than ever. Passive capital now sits at the heart of global markets, allocating trillions on behalf of pension savers and long-term investors. Those savers are not opportunistic traders. They are relying on the system to apply consistent, sensible rules about what enters the market—and when.
The power of index providers
Which brings us back to index providers.
These firms now sit in a position of extraordinary influence. Their decisions determine where capital flows at scale. In practice, they provide an essential public service—whether or not they are formally recognised as such. That should come with a high bar for transparency, consultation and accountability.
Yet, there is a case to argue that index providers have failed to protect the public interest.
Large institutional investors in the US are already starting to ask difficult and pointed questions about both the timing of these rule changes and the absence of clear and prudent justification.
That scrutiny is entirely appropriate—and it should intensify. Regulators, lawyers, and customers of index providers should be applying far greater pressure, recognising what is at stake: These providers play a critical role in directing public capital.
Because when index rules move quickly, the neutrality of “passive” investing starts to look illusory.
Market rules that shape society
There is a deeper issue here.
The shift from active to passive investing has been one of the defining market trends of the past decade. It has reduced costs and broadened access. But it has also concentrated power in the rulebooks that govern index construction. When those rules were slow-moving and predictable, that trade-off was justified by many as acceptable.
If they become flexible, opaque, or responsive to commercial or political pressure, it no longer is.
At that point, passive investing stops being passive. It becomes rule-driven capital allocation, where the rules themselves can be adjusted to engineer outcomes. And when those outcomes coincide with significant financial windfalls for a narrow group of insiders, it is hard to argue the system is functioning as intended.
This matters for any company entering the public markets. It matters even more for SpaceX (along with Anthropic and OpenAI) which is rolling out highly influential technology and AI models. These technologies will shape labour markets, information systems, critical infrastructure and have a transformational impact on wider society. In that environment, governance is not a technical concern. It is a public interest issue.
The myth of neutrality
Which brings me back to the role of index providers.
These firms increasingly determine where vast pools of capital flow. They are often perceived as neutral market intermediaries, but decisions on index inclusion can direct billions of pounds of pension savings into a company or sector almost overnight.
This is not a new problem. But what is unique at this moment is the combination of speed and scale of AI companies coming to public markets.
With that influence comes responsibility. The decisions by index providers will help determine whether public markets remain mechanisms for informed price discovery—or become channels through which passive investors absorb risks they never consciously chose to take.
Increasingly, they will also help determine which companies secure the capital, scale and legitimacy to shape society’s future.
