All right, we are talking SpaceX IPO, the biggest IPO of all time. And there's a lot of smart analysis out there. This ain't that. Sam, what did you call it? The two guys in a truck version of this. What did you say?
So this is for, you know, look, there's going to be people who are smarter, wealthier, more technical than us that are explaining SpaceX, but we promise to be the most relatable analysis you're going to get. Because I wanted to nerd out on this myself. I was like, should I be buying this IPO? Should I be buying this stock? And in order to do that, I was like, okay, let me sit down for a couple hours and just try to understand what even is this business. How does it work? Is this massively overrated? Is it underrated? How should I think about this? What do they even do? And so that's where I spent some time. Sam was picking through the S-1 trying to find some of the more interesting, quirky, 'people aren't talking about this, but check this out' styled nuggets. So that's what we're going to try to do in the next hour or so.
I'll just play the character. It's all acting, but what would you say SpaceX does?
Okay, so SpaceX, what do they do? SpaceX builds rockets. I think that's the primary thing that they do. They build rockets, ideally rapidly reusable rockets, and they could take stuff into space. Now, why do you want to take stuff into space? Well, one version of take stuff into space, and the origin of the company, is let's take man to Mars. So how do we become multiplanetary as a species? That was the, you know, way way back that was the original mission, still, you know, a part of the mission. And I guess the origin of that was that they, you know, Elon, after he sold, I think it was PayPal. After PayPal sold, he made a few hundred million, $200 million or so. And he was interested and excited about when NASA was going to go to Mars. 'Oh, I wonder where the Mars mission is at for NASA.' And he goes on the website, he looks it up, sees nothing about a Mars mission. He's like, 'Wait, we went to the moon in whatever, '79. We have nothing planned to go past that.' It's like he's planning a vacation. He's like, 'Uh, hey, so like I have some free time. Let's see if we can like take the kids to Florida and like watch like a rocket take off. How cool would that be?'
Exactly. And so he was looking at that. Okay, it's not happening. So then he thought, 'Oh man, you know, going to space, going to the moon, that's a very inspiring thing. What if we funded a mission to take, I think it was like a plant, like a little succulent or something, into space, and it'll, you know, let's take life to Mars, life technically speaking because it's a plant.' And he thought, 'Oh, that'll just generate some excitement, some buzz, it will kickstart more enthusiasm around space.' And that was the original idea. He goes to Russia, he tries to buy rockets from the guys in Russia, like an old ICBM missile basically, and they laugh at him, they sort of spit in his face. He realizes like, 'Oh [__], after two trips to Russia, this ain't going to work.' And like any good entrepreneur does, take no for an answer...
Like any stubborn genius does, he decides, 'I guess I'll build my own.' He took that personally. Dude, when I was a kid during Fourth of July, like, or for some holiday, we would drive over the river to go to Illinois because they sold bottle rockets there and they didn't sell them in Missouri. Elon and I are basically the same thing.
Just if he is, you know, he's 200 million times richer and 200 IQ points higher, but very similar.
Yeah. So if you have SpaceX... do you know their business model? What do they actually do?
When I was reading through the S-1, one of my big revelations was they do so much stuff. And frankly, I don't entirely know how it all contributes to the same thing. But I do know that the main reason why he started was that reusable rockets is the best way to make going to space happen because you can make things cheaper. So they... yes, that's correct. So they have, let's say, you know, three core components here, or I should say four. So they have launches, they have Starlink, they have X, the artist formerly known as Twitter, and then they have XAI. And those four are the four components of what SpaceX currently does, with some new things coming online, like they have something called the Terra Fab where he's building like the largest chip factory in the world. So that's like, you know...
What are the chips going to be used for? Their own rockets, their own AI?
So basically he's got XAI, which is his AI company, and Terra Fab is basically his way of getting ahead of what he believes is like the chip bottleneck in the world, which is there needs to be more chip production, ideally in the United States. So again, if the current manufacturers of chips are already booked out five, six years in advance, already at capacity, and the world needs more chips for AI, we'll go ahead and build the largest chip factory in the world, the fab. Sarah, my wife and I, we took a road trip and we stayed at a motel and they only had rooms with two twin beds at the Motel 6. And she was sad. She was like, 'I want to sleep in the same bed as you. It's so weird.' And so I just got rid of the middle drawer and I pushed the two twin beds together and I said, 'We don't need a king-size bed. We have a super bed.' And that is sort of what Elon has done with this company. You know, it's all these... he's just made a super bed.
Except he kind of put like one of the, you know, like what's the little footrest thing called? That's like Twitter. He's like, 'Yeah, it'll just be here at the bottom.' Because the only downside when you look at the analysis of this thing is that, you know, Twitter revenue is like half of what it was when he bought it. So that one hasn't really worked out, but he rolled it together with all this other great stuff so that the investors did well even though that business didn't do so hot since then.
So he has a super company. Let's hear... again, super company. The company's going public right now. It's the largest IPO in history. I believe it's going public at $1.75 trillion, which is very polarizing because you have on one side people who are rational, logical creatures who look at this and say, 'Wow, so it's 100 times revenue, like that's pretty insane. What are we buying here exactly?' And on the other side you have the cult of Elon, and you have people who are bullish on the future of technology who just believe that like, 'In Elon we trust,' and it's not about the price-to-earnings ratios, it's not about price-to-sales, it's about, you know, the price-to-Elon ratio. And if it's an Elon company, you're going to have 10 times the price you would probably otherwise have in a company. And so it's a very interesting company that's going public because it's so huge, and you have people who are so passionate on both sides, like a sports team or like a religion. And I guess the idea here is, can we try to understand what's actually going on and maybe come to our own conclusions?
So just to put this in context. The word 'trillion' has been thrown around a lot. You know, Anthropic is about to go public or something like that. You know, it's worth around a trillion or 900 billion. Same with OpenAI. This word 'trillion' is being thrown around a lot. And I want to put this into context because a trillion is really, really hard to understand. A billion is hard to understand. A million, a lot of people can understand that. So, a million, if it were seconds, a million is 11.5 days. 100 million, which is an astronomical number. Let's say if you have $100 million, if you have a $100 million company, that's a really big company, that's 3.2 years if 100 million seconds. A trillion is 32,000 years.
Isn't that incredible? It's hard to fathom how large a trillion is.
That's insane. And when this IPO happens, Elon will be the world's first trillionaire, on paper at least. Two trillion, right? So that's 60,000 years if it were seconds. That's a lot. That's so large.
So okay, let's explain a little about the company. So hey, I want to tell you about something pretty cool. We have a database of all of the unsexy business ideas that have been discussed on this podcast. So hundreds of episodes, the team at HubSpot went through. They pulled out all the unsexy ideas. So, not the super high-tech ones, but the simple, relatable, interesting, profitable ideas that we have brainstormed, and they're all available for download for free. Just click the link in the description below. Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. Back to the show.
On the different dimensions that I mentioned, launches, they dominate. They're like the Google search of launching rockets. They launch, I think, something like 80 to 85% of all the payload that goes into space goes through SpaceX. There might be a second... yeah, there's a second place technically, but the gap is so large. So they dominate the launch category. Now, what do they launch? They take satellites up into space. They take satellites for the government, but they also, I think about 40% of their launches are just for their own satellites for this product called Starlink. So if you don't know what Starlink is, Starlink is basically internet service. Specifically, it's really great at giving you internet in places that have shitty internet. So, rural areas, remote areas, countries where the infrastructure gets damaged or blocked during wars. Starlink basically gives you internet anywhere. It's great for airplanes. It's great for boats, anywhere you can have internet that's traditionally quite difficult to get. And this Starlink business is gangbusters. So, it is basically up like, you know, it's quadrupled in the last two years. They have 10 million paying subscribers to Starlink internet. It makes like 11 billion a year in revenue. It's like 40% EBITDA margins. It's recurring revenue. So the Starlink business has like all of the wonderful characteristics of a business. There's no competitors. They have an extreme cost advantage. It's recurring revenue. It's extremely high margin. And it's a product that everybody on Earth, you know, essentially needs, is the internet. And they specifically solve the problem in rural areas. So Starlink is very, very interesting as like that's the cash cow of this business.
Which is new. It's only like four years old, I think.
Only like four years old. And there's, by the way, some crazy story about how like the Starlink team, they worked in Seattle and the project was kind of going nowhere. So he's like getting status updates and he gets really frustrated one day, and then he goes like, um, you ever seen that episode of Entourage where Ari Gold walks into the office with a paintball gun and just starts blasting people that he's laying off? That's basically what they did to the Starlink project. They went there and they just were like, 'What the hell is going on?' Nuked everybody, restarted from scratch, and then, you know, it now is like one of the greatest businesses in the world right now, is just the Starlink business unit inside of SpaceX.
Okay, so that's easy to understand. That's pretty straightforward.
That's easy to understand. And then you might think, okay, well, how big is this sort of rural internet thing? Well, in the US, there's, you know, probably tens of millions of people who will be subscribers to this. Maybe like another 30, 40, 50 million on top of the 10 million that they already have. But then you have all around the world, you know, there's huge, you know, 50% of the earth basically has shitty internet coverage. So we're talking about like parts of Africa and India, whatever. Now the problem is those people don't have a lot of money. So they're not paying the same kind of thousand bucks a year that people in the US are paying for Starlink. So there's a question about what that's going to be worth. But then they have this other thing called direct-to-cell. You know about this?
Okay. So direct-to-cell is basically if you've ever been, you know, driving and you're like, 'Oh, I just hit a... my call dropped. I hit a dead zone.'
Right. Maybe you're driving on a bridge, or maybe you're just like, 'Oh yeah, this one area on my route to work always has like shitty service.' Well, they basically can now do Starlink from the satellite direct to your cell phone. So, you don't need the little satellite dish like you need for the home internet service. You don't even need that. It just goes straight to your phone. So, they partner with T-Mobile, for example. And so, in areas where you have crappy reception, you'll still be able to send text messages. You'll still be able to download some data. You'll still be able to make a phone call. And so they're basically looking at this like, whether they launch their own T-Mobile, right? They launch their own Starlink, just that's what you use for your cell phone plan, or it's this little add-on to every cell phone plan on Earth where it's like, oh yeah, and for an extra three bucks a month, five bucks a month, 10 bucks a month, like you just have guaranteed coverage everywhere. When you don't have good service, it falls back to satellite service. And so they're like, 'Yeah, that's going to be pretty big.' Because there are, you know, the market for, you know, internet services across cell phones and home internet is like $2 trillion or something. And they actually have... and by the way, there's no differentiation really between any of these. If you go to T-Mobile or AT&T or whatever, Verizon, they're all essentially the same.
Which commercial do you like best?
Exactly. Yeah. It's all the same thing. Who you like, what, you know, is Patrick Mahomes like your favorite player or you hate him, that's going to decide who you go with. And so they're the first ones to go into that space with something that's actually a different proposition, which is like, hey, our service works everywhere, those don't. And secondly, you know, it can be lower cost because of the way they're doing it in space. They don't have to do ground buildouts of towers. So that's kind of like the core business. They got so good at launching rockets that it became cheaper and cheaper. I think they basically brought the cost of taking like a kilogram to space down by 50 or 100x what it was pre-SpaceX. So they have like a, you know, if it cost $100 before, it now costs $1 or $2, right? As an equivalent of like how big the cost drop was. And they keep doing that. So wherever they are today, when they have their new rocket Starship, it's going to be half of what it currently is. So they're just like, have a massive cost and volume advantage in launches that lets them have the satellite business which lets them have Starlink. Okay. So that's kind of the business as it is today. Then you say, 'Well, what's the next unlock?' And if you look at their investor presentation, it's all about data centers in space. And you're like, you know, when you hear this, you think, I don't know what you think. What the hell? You know, you think about like literally a building floating in space.
Yeah. It's hard to fathom. I think like we're colonizing the moon or Mars or something like that. But I also think like, is there not enough room here? Like it's sort of... it's unfathomable. So that's hard to understand.
The answer is we got plenty of room. It's hard... it's a little slow to build and expensive to build, and there's some shortages like in turbines and things like that to build, but the real problem is literally just red tape. It is easier to figure out how to launch the heaviest rocket ever and take and build a data center in space than it is to get like, you know, Alameda County to approve of a data center in your backyard. That is literally the problem. There is so much regulation and so much anti-data center backlash that the people who even have the money and the engineering chops and the power and the reserved equipment to be able to build, they can't build in the United States, which is kind of insane.
Well, you know what's really... So think about this. So I'm a history nerd. So one of the reasons, one of many reasons why the American Revolution happened was when American colonists, folks, they started taking over what is now America. They started going further and further out west, and they started having a lot of fights with Native Americans. And the colonists were like, 'Hey, England, like we need some help. We're supposed to be your country. Come protect us.' And England's like, 'Dude, it's so far away. It takes us four weeks to get there. And plus, once you're there, it's like 3,000 miles long. We can't do this. You guys, I know we said that you can go everywhere else, but please, you got to come back in.' And George Washington was like, 'No, this is my land. This is my land. You're not going to tell me what to do with my land. Screw you guys.' And that was one of the reasons why there was tension. And it sort of begs the question that when you go to the figurative wild west of space, when everyone's doing their own thing, what's going to happen in 50 or 100 years when people are like, 'Okay, now we actually have to rein this in. What are we going to do? Who gets what?' Because... and that's actually another thing that's quite challenging to understand. It's sort of like sectioning off the ocean or water or something like that. Like, who gets what area of space or Mars or moon?
Well, the moon, I think, definitely, right? Because it's actually like a limited land area versus space, which is, you know, the biggest thing ever. I don't know. I don't know enough about this to know like what's true, but like, are there like highway routes that satellites take where it's like, you know, this is the best, this is like the best route, and like, you know, we can only have so much like debris in this?
I don't think so. I mean, maybe there's some future state where space travel is so cheap and easy that so many people want in and the demand is so high that now we're running out of space in space. Like maybe. But like that's not the problem today. The problems of today are, wow, it's really expensive and hard to get permitting to build on land. So it's such a like, 'I'm going to take my ball and go home' or just like the, you know, 'men will do anything to avoid therapy' type of conclusion, which...
Well, I guess we'll just go build it in space then. I don't even want to talk to it. Like I want so little to do with politics that I'd rather build this in space and figure out... I'd deal with the engineering.
So the big risk of this company right now is two questions. The first is, are they going to be able to build something called Starship? It's like their big ass rocket, way bigger than the Falcon 9. And so, I think it carries like seven to 10 times more payload than the Falcon 9. And so, if you know, Falcon 9's bringing up what, let's call it, 10 satellites at a time, this thing will bring up 70 satellites at a time. And so they haven't yet been able to get Starship to work. They're building it. They're testing it. It's taking years. When they do it, it'll be the most impressive rocket and probably the most impressive feat of engineering in human history. But there's a question of if... some people might not believe that they'll ever get Starship to work.
That tends to be a foolish bet.
Yeah. Betting against Elon's technical ability has proven to be like the most unprofitable bet you could make. Even if you're right for a year or two, you're eventually wrong. And so, one question is, is Starship ever going to happen? And can they make it rapidly reusable so that it could fly? Like, he was talking on a podcast and he was talking about it like, 'Yeah, we're going to do whatever, 10,000 launches.' And the guy was like, 'So wait, so that means like you're launching multiple times a day obviously, right? Like you're launching 30 launches a day?' And he's like, 'Yes.' And they're like, 'But you can't even launch one right now.' He's like, 'Yes.' And they're like, 'So it's going to be...' And he's like, 'It's like an airport. You know how many times a plane takes off a day?' And he's like, 'We are going to launch that many times in a day. It'll be like airports. It'll be like, you know, we figured out how to make cars reusable, how to make airplanes reusable. We are going to figure out how to make rockets rapidly reusable. So you can land, turn it around, launch it again, land, turn it around, launch it again.' Just like an airplane lands, they clean out the, you know, get your crumbs off the seat, and then they go and, you know, 45 minutes later it's up in the air again. And that's like a key part of how air travel became cost effective. They're trying to do the same thing with rockets. And so one bet is, is the Starship thing ever going to happen? And then if so, there's another set of doubt or risk or uncertainty, which is can you even do data centers in space? Is this even going to work? And there's people who argue that, you know, one of the reasons you put it in space is not just the red tape, it's the cost. So basically one way of thinking about this that Elon talks about is that the entire game is taking energy from the sun and so turning those like photons, basically, or electrons into tokens for AI. Like that's kind of the pipeline. And that's kind of where the world is going, is we are going to need an insane amount of AI tokens, whether that's for, you know, ChatGPT-like things, whether that's for digital employees, work that's being done, whether it's for science and medicine, whether it's for robots. Like we're going to need a [__] ton of AI in the future. It's pretty hard to bet against that. So then the question is, who could be the low-cost provider of tokens? And basically, if you look at when you have a satellite in space, it's powered by the sun. You don't need any cooling because space has like, you know, space is basically freezing cold and has like a radiative whatever cooling mechanism where as the chips get hot from being used, there's like a natural physical mechanism to cool them down. Some people argue against that, but Elon believes it's no problem. And that basically streaming AI tokens from space is going to be far cheaper and more effective than any land buildout of data centers and then figuring out how to transmit those. And the physics, the paper, the paper, papers the question, is can they build it? And historically Elon is very good at doing this. He's very good at taking no market risk, meaning if I could make this, you'd want it, right? And it's like, yes. Then the only question is, can I make it? And the answer for him has always been yes. And so that's kind of where we're at with this business.
This string of letters that we're putting together to make words into sentences, like the words that are coming out of your mouth right now, are wild to me. I just... like I just learned German yesterday. Like it's just the fact that language has changed so much that in the last five years it has come to the point where we're now saying we're going to go to space to create AI. Like imagine explaining this to someone. There's this old man that I hang out with in my building who's 96 years old, and every once in a while I go down to his room and he tells me like where he was when JFK died, and he'll tell me cool stories. Just imagine like explaining this to him. It's like, well, it's just crazy how fast humans progress.
How old is your daughter? She's two. Okay. So you haven't quite reached this point, but like my kids are like, 'How does TV work?' And I'm like, honestly, I have no idea. And you know, they're like, 'You know, so wait a minute. So this is happening right now somewhere else.' I'm like, 'Yeah, there's a guy with a camera.' 'How does a camera work?' Couldn't really tell you. But he's got something called a camera. Then that sort of gets like piped into like those towers. There's like cables on the road. You see those? There's like satellite and like there's Wi-Fi. That's a tough one too for me. Bluetooth, kind of like Wi-Fi, but something's different there for sure. And it's showing up on our TV. And where's the remote, right? Like I've had an experience by, you know, I've been humbled by my kids so many times trying to just even explain the current [__] that I don't understand.
Yeah. Like I wonder if these like analysts who are asking him questions, like, do they ever just say like, 'Yeah, it...' you know what I mean? Like I don't know.
There are so many things that boggle my mind about, you know, today's technology. I'm with you that like this sounds mind-boggling, but also crazy, but also [__] too, but also that someone is audacious enough to keep pushing, like, keep... okay, we did that, what about this, what about this, what about this? And to have that open mind. These are engineering feats, but these are also personality feats. Just like when Joey Chestnut ate 70 hot dogs at the Coney Island hot dog contest when the previous record was 19, that's what we're dealing with right now, and it's just unfathomable.
It really is. It truly, truly is. So anyways, what about Twitter and XAI? Okay, so that's kind of insane to me. The fact that a rocket company owns Twitter.
Yeah. You know, when you invite someone to your party and then they bring that friend.
That's kind of the Twitter problem right now.
And I think it was sold for $250 billion to SpaceX. Is that right?
So I did a lot of my thinking with Claude yesterday for this. And I had Claude build me my own deck about SpaceX. Here's one of the things about Twitter. So Twitter's ad business is 40% the size of old Twitter. So X advertising is at 1.8 billion now. It's down 100 million from last year, and it's half of what the ad revenue was before he bought it in 2021, five years ago. He added subscriptions and payments, whatever. So that's now a billion dollars in ARR. So the total, you know, is 2.88 billion, and it was 4.5 when he bought it.
So the X stuff has, you know, not quite worked. He did figure out how to spin it, right? So he figured out...
Hm, okay, the X business is not that great, and I can't get the engagement to be as high as, you know, WhatsApp or Instagram or TikTok or any of these other apps. But what it does have is data, and maybe I can use that data to power Grok. And then he tried Grok. Now Grok is falling behind Anthropic and ChatGPT. But again, you know, I think that one of the great hallmarks of entrepreneurship is basically failing forward. And so maybe in the same way that X sort of failed forward into like, oh well, it gave Grok some differentiation, but then Grok hasn't quite kept up with everything else. He used his Grok asset where he's trying to build a ChatGPT, Anthropic competitor, even though it's way, way behind. He built the largest data center for training AI, Colossus, and he's really good at building the machine that builds the machine. So basically what he's best at is building factories at this point. And so, you know, Tesla has its own factories and produces, you know, an enormous amount of cars faster than anyone else designs and builds. He's doing it now with the Terra Fab. He does it with the rockets. He did it with data centers here. So he built the largest cluster of GPUs, bigger than Google, bigger than Facebook, bigger than anyone. The problem is he doesn't have enough users. So he has this like, you know, he bought a huge mansion and doesn't have any friends to come over to entertain.
Well, because what does Twitter have? I think you say 500 million. That's shockingly... 500 million is still, this is amazing, a niche social media network.
Yeah. And Grok has 100 million users, whereas ChatGPT has a billion. So 10 times smaller.
And so he doesn't have the use of it. So what did he do? He just turned it into Airbnb. He started renting out Colossus to Anthropic and to Google. And so just in the last, I don't know, two months, they announced two deals that I think are combined worth like $20 billion or more. A billion dollars a month. So 12 billion a year to use his data center. And that's Google. Google themselves was the best at building data centers, and they need to rent from Colossus. And then same thing with Anthropic, where Anthropic is paying, you know, over a billion dollars also a month to rent out. Now, these are short-term agreements. They can cancel with like 90 days' notice. So who knows? Five years from now, it might just be a temporary stopgap solution. But again, failing forward, like figuring out like, okay, are we [__]? No. What if we did it this way? And then finding a way to survive in advance.
Yeah. They basically like they put this S-1 out, I think four or six, I forget when, one or two months ago, and I think it was last week or maybe a Monday. It was almost like a quiet amending of the document that says, 'Hey, Google just signed up to spend a million dollars, a billion dollars a month with us to become a customer.' And that's insane. That's such a huge number.
By the way, I have to think the 90-day chess move there was that they knew and they staggered the announcement. Maybe it was truly, 'Oops, forgot to mention this,' but I think it would have been smart if they intentionally did that too. Yeah, it was cool.
Do you want to see any of these slides? By the way, can I just run you through these? And you just...
Did you have a sit-down with your wife and you're like, 'Okay, so hear me out.' And you showed her like every slide?
No, that's you. I'm doing that with you right now. I told it to explain it to me like I'm Charlie Munger trying to understand the business. And it's like, okay, Charlie Munger would ask like, 'Is it in my circle of competence? How do I lose money here? Show me the incentives.' What's the moat? Price is what you pay, value is what you get. And so it started to basically break it down. Starlink is the part that makes money. XAI is the part that burns it. And the rockets are the railroads in between. You're not buying SpaceX. You're buying three different companies that are stapled together. You have the space launch business, the internet connectivity business, and the AI business. And then, you know, here's the high-level numbers. So 18 billion in revenue, losing 2.5 billion, 6.6 of adjusted EBITDA.
I'm going to bring that up in a second.
Yeah, I think that's whack. They burned 8 billion of cash last year. Uh, this is the Starlink business. So it grew from two million subscribers to 10 million subscribers. But you can see like it is starting to slow down. So that's like one cause for concern was that Q1 this year was not high growth, and that the average revenue per paying user as they go into like more third-world use cases of who needs internet where they have low connectivity, obviously they can't charge as much. They dominate the rocket business. 85% of all launches, 80% of all mass to orbit. Let's see. Everything is dependent on Starship which is not a guarantee, and that's the big question. And then, oh, they also bought Cursor. So they bought Cursor for 60 billion, or you have an option to buy Cursor for 60 billion, and Cursor I think is at three or four billion in revenue.
And so like again, trying to play catch-up in the AI game by merging. You know, Cursor needed to figure out a way to have compute and, you know, their own models and a way to survive against Codex and Claude Code. And so like, you know, it's this sort of game theory where the bottom players like in Survivor will form an alliance in order to flip the game on its head basically. Let's see if there's anything else here. Oh, he owns 42% of the company. Do you know this?
It's amazing. After 20 years, and you would think rockets are like the most capital-intensive business that he's had to raise for, for him to still own 42%. Just to put that in perspective, like Aaron Levie from Box, which is like a folder in the cloud, I think he owned 4% of Box when it went public, and he somehow still owns 42% and has 85% of the voting control. Like it's unbelievable.
Yeah, some other things about his comp package is pretty crazy. We can go there, but anyways, AI says Charlie Munger would put it in the too-hard pile. It's a wonderful business at a silly price is the AI Charlie Munger conclusion. And it's a great business. You could admire it from afar. You didn't need to own it was the conclusion that he had.
It's just logic doesn't particularly matter. I don't think like I don't think that you can use like a traditional way of looking at this. An Elon asset is not a normal company.
So it's really, it's hard. It's hard to price this. It's almost like this weird thing where... I always thought it was interesting whenever you're like going through an M&A process, someone will say like, you know, 'I'll buy this company for 15 times earnings.' And what I like to do is change earnings to the word years. So it's like, 'I'm going to give you 15 years of payment upfront.' And when you look at this, you know, the present value of a company is the sum of its future cash flows. When you look at this, you're like, it's hard to... I don't even know what it is. Is it a hundred years? Is it hundreds of years? Is it 50? I'm not sure. But however the length of it is at this point, it's so big likely that it's like, will Elon die or not?
I think the crazy thing about this and then even when somebody... Why would somebody pay 15 years ahead is because you're growing. And so yeah, it's 15 years at the current rate, but looking at the growth, that might only be six, it might only be four. It might...
Your growth rate is dependent on like... you're making the Elon bet which is can he figure it out? But I'm like, I don't even know if he exists by the time that like this, like you get the sum of your future cash flows on this one.
Well, here's what you'd need to believe. You'd need to believe that the Starlink business alone, which is at 11 billion in revenue, is probably going to grow to 30, 40, 50 billion in revenue over the next, let's call it, five years. You need to believe that Starship works and that they could take, you know, so they can scale both Starlink as well as the data center. So you need to believe that Starship works. You need to believe that data centers in space are going to be a thing. And with that, you'd have to also... I don't think this is as much of a 'you need to believe' as in it's not really a leap of faith. It's more of a realization, which is, you know, Saudi Arabia made trillions of dollars because they owned the oil. They were the largest and lowest-cost producer of oil and energy, and the world ran on energy. Well, if you look at the next 20 years, it seems like the world is going to run on compute. Every single business, every single consumer, every single robot, every single car, every single appliance is going to have a compute need. And so then there's a question of who's the Saudi Arabia of compute? And what you would be thinking with if he goes to... if he's the one who could put data centers in space and data centers in space are going to be giving AI tokens at a maybe whether it's 50% or 200% lower cost than ground-based compute for inference, then...
He's Saudi Arabia in space, and he's the only one positioned to do that currently. So they have a line item or a section of the S-1 that talks about future business lines, and he actually says that mining asteroids is, and potentially mining Mars and mining the moon for energy. And I guess that potentially means some type of oil or something like that. And so actually they actually have that covered as well.
Yeah, of course. Naturally, mineral mining on the... Let's listen to this. So this is actually a super interesting thing. So listen to what the company's mission is. The mission is to make life multiplanetary and understand the true nature of the universe and extend the light of consciousness to the stars. And then it goes on to say that they want to create like a species-level redundancy so consciousness isn't tied to one planet and that they don't want humans to have the same fate as dinosaurs. That's what it says at the top. That's the mission of the company. Is that crazy?
What's the Hampton mission?
Let's just put those side by side, dude. Like, you know, to connect people, but like for 99% of the people, the mission of any business is to take the money in your bank account and to put it into my bank account. Okay. So it's really challenging for me to compare this to make life multiplanetary and make sure that we don't have the same fate as dinosaurs. This just isn't fair.
Um, so that's kind of incredible. Also, I've met a few doctors, surgeons that have like kind of a god complex. And in some ways, it's like, look, if that's what it took to get you to become the best, you know, I actually want my heart surgeon or my brain surgeon to have a bit of a god complex, a bit of a savior complex. I don't mind that he's got a bit of a god complex, a bit of a savior complex. It's okay. That's what it takes for just to be like, 'Hey, you're already the richest man on earth. You want to sleep on the factory floor? You want to go ahead and build these and put it all on the line.' Again, it takes something that is irrational to make man want to do that, and that could be noble, or you could read into it like it's kind of a bit of an insecurity personality defect.
No, that's not what I'm getting at. I wouldn't say that I'm a huge Elon fanboy, but I think this mission's awesome. No, I think it's great. I think it's fantastic. I'm not mocking it. I think that it's incredible. I think it's inspiring. I think it makes it easier to inspire your employees. There's the famous story of like someone talking to the janitor who worked at NASA in 1968, the year before we went to the moon, and they said, 'Sir, what do you do here?' He goes, 'I'm helping us get to the moon.' Like, I think that's awesome. I think the Wall Street Journal had an article on the blue-collar workers at SpaceX and how much money that they were going to make on this, and they all seem incredibly inspired. So, no, I'm on board. I think it's awesome.
So, look at, I don't know if you saw this, but SpaceX IPO is expected to create over 4,000 new millionaires, including some cafeteria workers whose compensation packages included employee stock options. And then this me and the SpaceX lunch lady, she becomes familiar. Dude, that's so crazy.
