At long last, it’s finally happening! The SpaceX (SPCX) IPO is coming tomorrow, and it promises to be fireworks, with demand coming in hot. It’s looking like it’ll be four times oversubscribed. For a $1.77 trillion IPO (that’ll work out to $135 per share), there’s certainly no shortage of those who want to get their share of the name on day one, even if it means paying up a massive premium.
With the SpaceX roadshow delivering ample food for thought, all while a slew of exciting developments unfolded in recent weeks (including the SpaceX deal to sell compute to Alphabet‘s (NASDAQ:GOOG | GOOG Price Prediction) Google) and the FAA approval of the Starfall capsule, it should come as no surprise that things are getting heated going into Friday.
Of course, there’s been tremendous market volatility in the week leading up to the IPO. And I’d say there’s a good chance that the volatility persists well past SpaceX’s big IPO day. For those with limited cash on the sidelines, some selling (probably in the hottest parts of the market or the Mag Seven) might be the only move to make.
There’s a lot of novelty in getting in on something like SpaceX on day one, even if it means having to grapple with double-digit percentage losses in the sessions that follow. While SpaceX makes for a great trade, the big question is what that chart will look like come three years’ time. In any case, there was a lot of news to take away from the latest SpaceX roadshow.
SpaceX is a space AI play, not just a rocket company that launches satellites into orbit
So, what was the big news? In my view, it’s that space-and-AI play, it’s that the firm won’t just stop at Earth’s orbit. In fact, the moon might be the one small step SpaceX needs before it realizes the long-term dream of Mars. In any case, the xAI merger wasn’t just for convenience; AI infrastructure may very well enable the space economy to be genuinely profitable.
Indeed, orbital AI data centers ought to be the first thing that comes to mind when one thinks of the next big driver for SpaceX. What’s more, is that the lunar ambitions, in my view, could be something that turns a sci-fi fantasy into a real narrative, one that could be profitable and with one of the widest economic moats on the planet (and its orbit).
Either way, the case for starting up shop on the moon, I think, is no longer just a tall tale, but a real moonshot.
“Because the Moon has no atmosphere and about one-sixth Earth’s gravity, you can use an electromagnetic accelerator. You don’t need to use rockets to do AI data centers into deep space from the Moon. You can literally just shoot them like a railgun type of thing.” Musk said.
Given the huge success that Starlink has been for SpaceX, I’d say there’s no reason orbital data centers and starting an industrial economy on the moon can’t hit the spot as well, especially if the model proves to be worlds more economical than thought (no propellant to launch off the moon?).
In any case, there’s a lot of backlash from the public when it comes to data centers in their backyard. Nobody wants the higher bills, the noise, and the unsightly warehouses (or even tents?) close by. Maybe putting them in space is the genius, albeit out-of-this-world idea that works, just like electric vehicles (EVs) back in the day and satellite connectivity not too long ago.
Maybe space is the future for the AI infrastructure
In any case, SpaceX isn’t limiting itself to AI growth here on Earth; it’s already pushing into a whole new frontier. It’s going to be a tough problem to tackle, but SpaceX will have the capital. And after the latest roadshow, it has some pretty concrete plans for building and deploying.
Of course, there’s no guarantee that the new businesses SpaceX is pursuing will be profitable or justify the valuation. It’s going to be expensive, really expensive. And the risks simply are too much for many to bear, given the great uncertainty that comes with sailing into uncharted waters.
As SpaceX evolves from a rocket-and-satellite company into an AI infrastructure, I think it’s hard not to sit through the roadshow and not want to get a piece of the company despite the four-times oversubscribed IPO, despite the sky-high valuation, and despite all of the unknowns regarding the timeline or if AI in space will even work. Who knows? Maybe manufacturing on the moon will be a new reality in a decade, as SpaceX invests in the space economy while just about everyone else observes.
In any case, the big takeaway is that SpaceX is an AI infrastructure company that is quite literally going to the moon.
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