SpaceX shares fell 6.2 per cent on Wednesday after the Wall Street Journal reported the company had developed a prototype handset designed to reshape human interaction with artificial intelligence. The decline erased more than $50 billion from Elon Musk’s net worth, pushing it below $1 trillion and ending his brief tenure as the world’s first trillionaire, according to Forbes estimates.

Citing people familiar with the matter, the Journal said the device is slimmer than an iPhone, runs on a proprietary operating system, integrates AI technology from Musk’s xAI, and uses a Qualcomm Snapdragon processor. SpaceX reportedly showed the prototype to select investors ahead of its recent initial public offering, while cautioning that the project remains in an early stage and the design could change. The device has no name and no confirmed path to public release.

Musk responded on X by calling the report “utterly false,” a denial consistent with his February statement that the company was not developing a phone. Analysts at Vital Knowledge noted that SpaceX faces significant hurdles in manufacturing a consumer device at scale and competing against established platforms, adding that Musk-led companies often receive a “massive benefit of the doubt” on product promises. The share slide also reflected broader investor sensitivity to any diversification narrative that could distract from the core launch and satellite businesses. Speculation about a consumer device has been fuelled by separate reports that SpaceX is exploring a terrestrial mobile phone service and is in talks with Charter Communications about using its ground infrastructure.

SpaceX has not issued a formal corporate statement beyond Musk’s social media post. The company’s next quarterly investor update, expected in the coming weeks, may offer the first official opportunity to address the hardware speculation and clarify the status of any consumer-device initiatives.