SpaceX: Mission Impossible
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SpaceX:
Space Cloud Infrastructure Madness
I’ve been thinking a lot about SpaceX as it’s been dominating my feed lately. JPMorgan is apparently under the impression that revenues will somehow go parabolic within the next 4 years,
And even Musk himself said he’d be “shockingly surprised” if it didn’t. I know I’m very late to this one… Plenty of people have already broken this down and pointed out the hypocrisy here.
Anyway, the ‘too long, didn’t read’ story is that somehow this Space mission will enable unrivaled Superintelligence compared to anything we have today and also the largest Neocloud business anyone has ever seen.
The Blueprint of SpaceX
Basically, SpaceX consists of three things: Space, AI and Cloud. A combination that somehow represents a potential $28 trillion total addressable market! I’m not entirely sure how they arrived at that number, but this chart looks very cool.
We’re starting off with the Space-Rockets and I must say, it’s genuinely impressive. The value investors are completely missing the point. Sure, the rockets aren’t ‘productive’ but the infrastructure itself is undeniably worth something.
They have the means to space. What is that worth? In my personal opinion though, colonizing Mars has little economic benefit to it, unless it has oil. Not so sure about the ‘multiplanetary thesis’ but the rockets themselves are fine.
70% re-usable and a launch/landing success rate of ~99%. The most economically efficient rockets ever built. And if they manage to procure metals from the moons of Jupiter or whatever, today’s costs will be remembered as a small price to pay.
Grok and X
Okay, here’s where it gets ridiculous.
Elon Musk has Grok, a decent AI model… Which has also gotten a very bad reputation in mainstream circles. It’s been called everything from racist to antisemitic and has had numerous scandals with safety guardrails being completely overthrown.
As you may know, SpaceX recently acquired xAI and because of it a “superacceleration” is now possible. While Grok holds it’s own against the frontier models on benchmarks, it’s userbase is practically on life-support. (117M users vs ChatGPT’s 1B)
So attributing a $26.5 trillion valuation from Grok is downright deceiving.
Frontier models don’t win only because they’re good but because people use them. And Grok is still catching up on both ends... Here’s hoping the physics of space will catapult Grok’s Intelligence ahead of everyone else.
The acquisition of xAI also hands the X platform over to SpaceX. Which I actually think holds the most water here. Everyone is on X/Twitter these days and despite the many controversies it continues to be the “global plaza” of the world.
Starlink + Orbital Chaos
Moving on, everyone has probably heard of Starlink at this point, it’s one of Musk’s better achievements in my book. But for those who don’t know it’s like space Wi-Fi.
Elon started throwing up small starlink satellites back in 2019 and now there are more than 10000 of them hovering in Low Earth Orbit (LEO). Enabling internet access almost anywhere and better than any other satellite within the same orbital range.
There’s nothing wrong with Starlink, but it’s not going to generate boatloads of cash either. Average 5G towers are far superior for most areas unless you are on a plane or mid-ocean. And less than 1% of the internet goes through space.
With the total 14,000 satellites in LEO it’s already becoming cluttered within the atmosphere which might become a huge problem…
The Kessler Syndrome…
You see space is becoming a junkyard, with more satellites now colliding every so often. And one collision tends to cascade and cause numerous others… This is known as the Kessler syndrome.
So imagine what the 1,000,000 satellites that Musk has planned will do! 😂
The international space station (ISS) has to outmaneuver the current debris already floating around in lower earth orbit. Something people usually gloss over since the debris around the atmosphere eventually comes down back to Earth.
Except now Musk is looking beyond LEO! For these space datacenters (Gigasats) which will be farther out in space. As outside the atmosphere you can access the sun’s energy 24/7 and have free cooling thanks to the sub-zero temps of space!
Not here to debate the science, but radiation is still an issue for electronics. In any case the Kessler syndrome becomes a real nightmare that far out since the debris will remain for centuries!
On top of that, these “superior” space datacenters would need a solar array the size of a football field (70m minimum) just to power one single rack of NVIDIA GPUs. To be honest, this whole setup just feels half-baked.
Insanity… or Genius?
I mean… What if a GPU breaks in space? Is Musk going to fly up with a screwdriver? There are just so many problems which he himself must know about… The other geeks at SpaceX must too? But no, “Datacenters in Space…” 😎
The financial bull case in this case seems less about space and more about using orbital compute to force-multiply Grok and then shoot for the stars. A really expensive gamble which even Sam Altman threw shade at.
But despite everything Musk just keeps winning. Tesla never delivered full self driving on time, the humanoid robots are impressive but not superior and everything else is just smoke and mirrors…
But who is going to stop him? If SpaceX crumbles, the United States unequivocally loses its sheer space dominance over other countries. So I have a feeling he is going to make this happen with or without the economics behind him… 🇺🇸🚀
Evaluating SpaceX?
SpaceX reminds me of a Biotech company… Remarkable infrastructure and technology but what is the actual financial run-rate of this company? How long can it continue operating without diluting shareholders to death?
Starlink has a capped TAM. Grok winning AI is honestly a long shot. And these “superior” space datacenters are still years away from becoming a reality. So none of these are going to justify a $1.4-2T valuation anytime soon if ever.
Meaning if it weren’t for the infinite potential of Space and the fleet of rockets this company would have been ẃorth a whole lot less, but that’s not what SpaceX believes assigning only $370B to space themselves??? So stupid.
Space is still the final frontier. In the ‘near-term’ however I think the real test is this:
Can they turn the Starship into a reliable vehicle that can establish a lunar platform on the Moon?
A working base on the Moon enabling refueling, resource utilization & manufacturing makes everything else more realistic: Coloniziation of Mars. Excavations on Jupiter’s moons. Orbital compute stuff.
My Move?
Fix the lunar base and start doing Space missions and we’ll talk. With that said, dividends from space may take a while.
But I might have a clue who actually stands to benefit from this crazy pursuit in the meantime and following years to come…
Musk argues that the U.S needs a humanoid robot army to compete with China’s workforce and manufacturing prowess — and to make the chips, cars, rockets and satellites all possible they will need something like:
Tesla: I think it’s only a matter of time before Musk merges everything together. Tesla has every piece that SpaceX potentially needs. It’s one of the most vertically integrated companies on earth, despite just selling electric cars. (INSANE RISK)
Harmonic Drive Systems: I have to make another robotics post, but this is the perfect pick-and-shovels play for this incoming wave of humanoid robot armies. Actuators is the key component here and every piece of machinery needs it, HDS can supply it.
Palladyne AI: Supplying the parts for these robots, taking Robots-as-a-Service (RaaS) to a whole other level. Dad invented the term and bought calls. (HIGH RISK/HIGH REWARD)
MP Materials: This is a longer macro play, China continues to dominate all of the rare earth elements. And thus despite the FDPR, the U.S is at a resource disadvantage against China. MP Material will be pivotal, and we already saw it making violent moves last fall. (LOW RISK AND DELAYED PAYOFF)
Broadcom & NVIDIA: Necessary for relaying the physical environment of space, Broadcom dominates the market for high-speed, custom chips and co-packaged optics. Until the Terafab is ready SpaceX is going to need chips. NVIDIA seems to be the default hardware pick for any massive infrastructure play. (LOW-MID RISK)
IREN: If Musk just so manages to pull this off even by a small fraction? Hyperscalers and AI labs both will either be forced to become customers to this space monopoly or compete on land. I think I know what they’ll choose. (HIGH RISK)
I can’t buy all of them and don’t want to. I genuinely believe that the one thing Musk is going to achieve with this impossible mission is an unparalleled means of manufacturing with the humanoid robot army.
If not?
PSALM 19:1
🛰 Signal LOST: End of transmission — INVADER out… 🚀
Disclaimer: This post is for informational and entertainment purposes only. It reflects personal opinions and is not intended as financial advice. Always do your own research before making investment decisions.