I very much can imagine a future documentary in a few years. With the host asking the audience: "Where were the signs?"
IF, and yeah it's a gigantic really big IF... the future plays out the way people are envisioning it. It's future shock. Astroid mining, gigafabs, star ships launching hourly making space exploration cheap, satellite intelligence, physical AI. The world is going to be a completely different place IF SpaceX and the AI labs are successful. That TAM might be real. It's a literal moonshot, the stuff they're talking about sounds SciFi, but that's why the valuations sound SciFi.
That said, I would not invest anything into SpaceX that I wouldn't be willing to lose, and i personally would not invest until the lockups are free. Moonshots aren't in my risk profile.
The East India Companies (Dutch and English) didn't invent or discover the spice trade. They were created to leverage private capital to wrest control of the trade from the Iberian Union, an entity both Company's sovereigns were at war with.
The "TAM of the emerging markets" had already emerged both because of the Silk Route from Pax Mongolica and in the 1500s from the Portuguese Empire's Cartaz trade license monopolies enforced by their naval posts (feitorias) throughout Asia.
The TAM was incredibly apparent, Anglo-Dutch privateering during the war had seized multiple cargo laden ships along with trade route information.
We've been mining platnium and aluminum for all of humanity, so we know they exist, "The TAM was incredibly apparent". We know there are astroids worth 1 quadrillion dollars. So, if SpaceX has a 1% chance to capture that, thus the valuation.
But, here's what you'd really do: https://news.ycombinator.com/item?id=48572319
a) If a single Portuguese treasure ship was laden with cargo of such magnitude, exactly how do you propose this is characterized as a TAM "discovered" by the East India companies?
b) Forget the asteroid, undersea mineral nodes are a total of 250 trillion tons worldwide, with an expected value of 233T USD. This is right here on Earth. Yet no country or company considers these minerals as a TAM, because the P/NAV makes this a net negative. This is the same reason any capex for Texas Shale oil will dry up if WTI falls below 60 for a period of time. No matter how many quintillions worth of oil are left in the shale reserves, if it costs more to extract than it will return, it isn't done. Arbitrary valuations mean nothing if they aren't economically viable.
c) Back to history. "Half the English crown treasury" sounds impressive, but the actual value was an estimated 500k pound sterling, upper bound 200M GBP in today's money. Quite a bit far away from 1 quadrillion. The English Treasury famously passed on a debt of 400k pound sterling to James 1 after the Spanish war, a contributing factor to a crisis between Crown and Parliament relations that eventually helped lead to the English Civil War. Suffice to say, a wartime treasury isn't very large.
Humour me for a bit. Let's assume we need to Hohmann transfer 1 quadrillion worth of minerals (30M metric tons) from a location in the asteroid belt to Earth. The DV necessary is 5000m/s, leading to a total energy calculation of 7.5 x 1e16 J. This is 78M tons of hydrolox fuel. 780k launches assuming 100 tons per launch (Starship). Are you honestly telling me that SpaceX is justified in adding asteroid mining returns to its TAM (1 quadrillion) because you believe it's economically viable to make 780,000 (lower bound) separate launches of fuel payloads from Earth to this asteroid? If ISRU is your claimed solution, then where is the Madre De Deus of this ISRU demonstration?
Or maybe you process insitu, nstead of a 30-million-ton rock, you return a compact, high-density capsule of pure platinum. A few tons of pure platinum group metals dropped into a stable Earth trajectory fits comfortably within existing down-mass logistics and could be worth billions.
Thirdly, (prolly the worst of all the options), you place metal slag in orbit and you drop it on peoples heads. Now you've got rods of god that any military will pay billions for.
Edit: Lastly, once you control a vast amount of stratigically important material they would instantly become a sovereign-level geopolitical superpower. The moment a private entity controls a constellation capable of dropping kinetic rods anywhere on Earth within 15 minutes, every terrestrial military becomes fucked overnight. The line between industrial infrastructure and planetary hegemony completely disappears. ya gotta price that in somehow. Then... we really have realised the vision laid out in the book "the soverign individual"
Edit 2: >where is the Madre De Deus of this ISRU demonstration
If everyone could do it, they would have done it. The Madre De Deus was an absolute marvel of engineering at the time. the english knew the portuguese were selling all the stuff from the colonies, but they didn't really know how freakin' profitable it actually was. The Dues was freakin' massive. AKA Starship.
> So, if SpaceX has a 1% chance to capture that, thus the valuation.
Surely 100% chance at capturing 1% of the Veblen Good asteroid is worth incredibly way more than 1% chance at capturing 100% of it.
Patrick Mackenzie, at the time at Stripe, about 10 years ago, talked about how Stripe's growth depended on growing the actual internet. Not just growing their market share within it.
Google, Meta, etc, have projects dedicated to getting more people online, because when you have 2bn users, you kinda have to make more users.
But there is. Like, it is less then GDP of US only
And yet, based on stock price and market cap, they are worth about as much as Microsoft. Microsoft generated $80B of revenue and $31B in profits...per quarter last year. SpaceX will never, ever, generate $124B+ in annual profits.
The only way you can see this continue as a model if space based data-centers actually can beat everything land based. And that is very questionable.
> What can he do now that he's got a $85B war chest of cash?
Increase the profit of Micron and NVidia?
xAI was retardedly late to the party. When Elon Musk founded xAI in July 2023, competitors had already spent years buying up massive silicon footprints and locking down cloud partnerships.
OpenAI had a 3 year lead, anthropic 2.5 years, and google was building TPU's since 2015... what are you talking about?
And others if they were earlier, the explosion and demand of investment increased exponentially over the last 2 years, as we can see in the profit margins of the memory companies for example.
My claim was not that they were the first ever, but that Musk mobilized a huge amount of resources fairly quickly in a time where prices were exploding and before many others.
Early enough that compared to now he got a ok price and he can rent it more expensive then he bought it.
That's why all the Musk fans have realized that they need to scream 'Terafab'. But that is a fanciful concept and unprecedented in history of semiconductors.
"So we went from, he just got lucky cause he got in early", to, "okay, he wasn't early he was just really fast", to, "the suppliers now see he's making a ton of money so they are going to raise prices" to, "terafab is impossible", QED?
You seem to misunderstand how tier 1 capital allocation actually works. You don't get fucked by your suppliers when you are adding $B's to their bottom line. XaI never "Stopped" purchasing GPU's in 2023. They signed multi-year long deals for as much hardware as nvidia, supermicro, dell and micron/skhynix can provide. They are the last to get squeezed. They never stopped adding on to Collosus 2, and they are actively building collosus 3.
Lastly, nothing is "Fanciful" about terafab. ASML makes the machines, Intel provides the cleanroom tech, and 14a pipeline... these are known variables that need to be tackled. Tesla and SpaceX are world renowned, high throughput manufacturing facilities with the ability to make lines more profitable than their competitors. .. no one is claiming he's building a TSMC-style silicon foundry. They are building a massive compute fabrication/clustering footprint. It is a formalized $55B industrial plan filed in Texas, backed by a hard partnerships.
Uhhh... $3.1B a month for $20b in capex sound like the best investment ever?
Matter of time before its no longer considered good enough by the main players.
Anthropic are building their own Datacenters so it's a stop gap
Anthropic is not building their own datacenters... They are mainly giving equity for colocation with AWS. I cant find one example of them ground breaking on anything... Can you give me a source?
https://www.themorningintelligence.uk/anthropic-lines-up-tee...
So, to circle back to my original point, Anthropic has not broken ground on actively building any datacenters.
Patrick Boyle covered the SPCX trajectory fairly well... =3
In the long term most markets are duopoly with small competitors. And personally I see OpenAI and Anthropic duking it out rather than SpaceX.
(edit: This is not at all unique to spacex, of course, but given the nature of Musk's companies and their "fans" it's logical that they would employ this strategy. They are also doing a staggered unlock to avoid upsetting the market when insiders start dumping their shares.)
To be clear, I don't know which part is signal and which part is noise any better than anyone else.