Because of the Musk reality distortion field. The claim is that all data centers will move into space, and that SpaceX will completely own that market.
Because of the Musk reality distortion field. The claim is that all data centers will move into space, and that SpaceX will completely own that market.
The datacenter thing is mostly just a meme that billionaires say because it makes them feel smart and gets them media attention, it doesn't seem to move stock significantly.
The actual distortion field is around Starlink. Which is the main product and the only one that's (nominally) profitable. It's the one all the hype centers around. xAI is barely even notable in the AI space.
This also makes it possible to judge the size of the distortion field, as Starlink is just an ISP, for which we have accurate valuations. And for what it concerns shareholders, a strictly worse one than a conventional ISP. Space infra is much more expenive than putting some glass in the ground, once.
Comcast is a behemoth of a company doing far more than just ISP. Worth a "mere" $90 billion. Charter Communications is a similarly sized "pure" telecom. Worth $20 billion.
Both of the above ISP companies have roughly 30 million subscribers. Starlink has 10 million. Yet they want $2 trillion at IPO.
A 20x to 100x overvaluation. And what do you get beyond an ISP?
* A private aerospace company that's not doing notably better than the space divisions of old aerospace. (Remember: Starlink is already accounted for so doesn't count here)
* An AI company that has so little demand it's currently handing a bunch of compute to Anthropic for such a deep discount the latter has claimed to become profitable.
* Twitter. Which is worth either $33b if you count Elon's internal buyout valuation, or $10b if you count realistic valuations.
While there is some hype around "The future of space!", the reality is that the long term growth for that is fairly dead in the current geopolitical climate. Nobody's saying it out loud yet but US Aerospace is being replaced. Fewer and fewer US launches will be bought. The EU is even building their own Starlink equivalent.
Starship is going to make whole entire industries viable that were not viable previously. It might even take a significant chunk of air freight which is going to be a big deal with rising oil prices.
Is that supposed to be a joke? There is no plausible scenario where SpaceX gets any significant fraction of the air freight market. Even under the most optimistic scenario the costs for suborbital launch are much higher than regular airplanes.
In a few decades there might be a small market for carrying passengers long distances really fast. Initially for the military to insert special ops troops in a crisis, and eventually maybe for wealthy consumers after safety improves.
> Starship is going to make whole entire industries viable that were not viable previously.
Starship is a complete and utter failure, as you can read about here, among other places: https://www.planetearthandbeyond.co/p/starship-is-going-nowh...
> It might even take a significant chunk of air freight which is going to be a big deal with rising oil prices.
By being several magnitudes more expensive than an airplane would ever be?
> The datacenter thing is mostly just a meme that billionaires say because it makes them feel smart and gets them media attention, it doesn't seem to move stock significantly.
A significant portion of their valuation is based on this. The spacex private stock price moved significantly based on this data center narrative.
> And for what it concerns shareholders, a strictly worse one than a conventional ISP.
This is ignorance. There is absolutely zero meaningful competition to Starlink in the maritime, aviation, and remote internet markets. 150mbps down with <80ms latency isn’t impressive in a city but it’s mind blowing on an airplane 1000 miles from land.
> The EU is even building their own Starlink equivalent.
No they aren’t. The only somewhat credible competitor so far is Amazon Kuiper(Leo) and they are still nascent.
You also forgot starshield.
> There is absolutely zero meaningful competition to Starlink in the maritime, aviation, and remote internet markets.
There are roughly 100,000 ships at sea. There are roughly 15,000 planes in the sky.
The remote internet markets are remote because either A) exceedingly few people live there, or B) exceedingly poor people live there. (And usually, both at the same time)
This just isn't a big market. That's why the telecom giants haven't bothered. To justify a trillion dollar valuation you're gonna need a billion users. SpaceX would be better off putting fiber into the ground in Africa.
>> The EU is even building their own Starlink equivalent.
> No they aren’t.
That’s exactly what IRIS [0] is though…
[0] https://defence-industry-space.ec.europa.eu/eu-space/iris2-s...
I find it amusing to read comments like these, because they remind me of the massive awareness gap between people who understand SpaceX's product line, and those who don't.
In your world, you only see and interpret SpaceX's existing products. You then see SpaceX's eye-watering valuation, and then are confused where this comes from.
Meanwhile, people who understand SpaceX's product line, and the implications these products in five or ten years, can analyze the situation more accurately.
I can tell you are in the unaware group, since you don't mention nor analyze two of SpaceX's world-changing products (Starship and Starlink Mobile).
Rocket launch ex-Starlink is a small $N-billion market; a few dozen flights at $50M per flight. Starship is revolutionary and I can easily believe that it will expand the market by a remarkable order of magnitude. Multiple tens of billions. How does that justify a valuation over $1T?
Starlink Mobile is more significant, but it's still unlikely to double Starlink revenue -- most mobile traffic will always be transited by local cell phone towers.
P.S. I think somebody is going to make a lot of money from Starship. The money in space is not from launch but from the services it enables. Starlink >> Falcon9. But I don't think SpaceX is going to be the ones to find the next Starlink. It's much more likely to be a third party who launches on multiple providers to keep costs down.
I'd love to know what your analysis. This is a genuine request. No snark. I'm genuinely curious of other view points.
Isn't Spaceship an requirement to make starlink profitable?
Srsly?
Just to be very clear about Starship: We have a very limited amount of payload we are sending up in space every year.
The biggest jump in payload is starlink itself. Starlink though doesn't scale very well. V2 can only handle a certain amount of customers and has only a lifetime of 5 years.
Space-X has to build Starship to even being able to send v3 up to increase the margin of this setup. But even then, every 5 years that thing has to be replaced and new build.
Every mobile tower, fiber cable etc. underground has a lot higher lifetime than that.
Starlink also has the issue of latency handover. Every few minutes you have to do a handover which leads to package loss. I can't do a Teams Call through Starlink fyi.
And Starlink already exists and is relativly affordable despite that, they only have 9-10 Million customers and they had to increase the price.
And while all of this 'magic no one gets' is happening, Starship hasn't profen non leo orbit with proper payload AND reusability. Without reusability, they will not get the costs down that much anymore. Its already relativly cheap.
And in parallel all of this 'trillion dollar future margin magic' gets opposition by other companies like eutelsat and Amazon.
Ah yes the world changing product of starlink mobile. Which doesn't get booked in the USA, is slow and needs a lot of energy. Whatever you think this is, 500km mobile range is 500km and this on a planet were normal people already have a very very well working mobile setup for at least 10 years by now.
Is space-x some kind of business gap? yes sure. Will they make billions with this? Depending on other companes, yeah sure. Is it a trillion dollar business? No
Yes yes i'm fully unaware of this.
Btw. Musk def sells you the story of Mars and dyson sphere and stuff to keep the magic but while he does all of this, he rents out colossus 1 and 2 to his competitors because he is unable to sell his OWN AI product.
"You just don't understand bro" has been the trite handwaving of criticism for a over decade now. It already wore out when the bitcoin bros kept saying it to all their critics.
> I can tell you are in the unaware group, since you don't mention nor analyze two of SpaceX's world-changing products (Starship and Starlink Mobile).
Just because I did not mention Starship by name does not mean it's not in the reply.
And Starlink Mobile is still an ISP. "It's worth a trillion dollars because it's mobile!" Haven't heard that one since the Dotcom bubble.
But more to the point:
> Meanwhile, people who understand SpaceX's product line, and the implications these products in five or ten years, can analyze the situation more accurately.
They are looking 10 years forwards. I am looking 10 years back.
This exact same "just you wait, in 5 years there'll be a miracle technology that generates infinite profit" rhetoric has been used for those 10 years.
Still waiting on the miracle self-driving that was supposed to justify Tesla's $1.6 trillion.
'If you don't agree with me it's because you don't understand' is such a tired, boring trope.
Do you have anything to add to that sentiment? Maybe a pro-forma, rather than feelings?
Enlighten us then, please. What are we missing?
This sounds amazing until something needs replacement. Until data centers on earth has a 99.99% (or higher) level of autonomous operation with very minimal requirements to maintenance and part replacements, they're not sending anything into orbit...
It sounds amazing for 14yo boys who are not specifically into hard sci-fi.
I guess we'll see, because most 14 year olds don't have a lot of money to put into SpaceX.
'Stock goes up so we buy it' has sufficient explanatory power to resolve this conundrum.
I also sounds amazing until you remember how hard it is to cool something when your only option is radiative cooling.
You could also transfer the heat to tungsten rods and drop them on rivaling earth-bound data centers.
Why tungsten? In terms of thermal conductivity, It’s way worse than silver and copper and on par with good aluminium alloys. Those are cheaper and much lighter (so again much cheaper to put into orbit).
https://en.wikipedia.org/wiki/Kinetic_bombardment
The idea is to use tungsten because of the high melting point and hardness so that it survives re-entry in order to best strike the rival datacentre.
Starlink already operates this way. You don’t replace parts, you launch new sats.
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Where did they say that all data centers will move into space? I thought the claim was that it's going to be more and more feasible and profitable to have DC's in space.
Elon Musk is saying this together with Dyson Sphere and Mars colonisation.
In his FCC filling he also mentions DCs:
https://docs.fcc.gov/public/attachments/DA-26-113A1.pdf
And yes its absolutly wild.
His Scifi ideas are probably a min of 100 years too early.
And while he doesn't even need his own compute (renting out colossus 1 and 2), he thinks we will send server racks full of expensive hardware into space in no time.
Why?
Because his Space-X Trillion evaluation doesn't make sense if he doens't has payload for Starship.
So how much payload do we send to space? Actually not that much, starlink itself is the biggest change by far. So he builds Starship which he needs for starlink v3 but what then? Yeah Datacenter in space...
I truly do not understand why anyone believes anything Musk says anymore.
could it be that those people don't actually believe him and just appreciate the genuine shit-show he puts up enabling them to laugh at people who get sad about what he says, and their eagerness to believe