"in May 2026, we entered into Cloud Services Agreements with Anthropic PBC (“Anthropic”), an AI research and development public benefit corporation, with respect to access to compute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the customer has agreed to pay us $1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee"
Anthropic is paying them 1.25 billion per month to serve Claude in their data centers. That's more revenue than Starlink. In fact that's their largest revenue stream lol.
Napkin math on 5 year depreciation is 5.5 billion per year for 28 billion. However the 28 billion is cash upfront, spacex is probably paying 10-20% interest on the 28 billion for another 2-6 billion per year.
So net you are looking at finance expenses of 7-11 billion per year. The electricity costs will be significant on top of that, but harder to get a solid read on.
Net of everything, spacex may be getting a 14-28 percent yield before paying for electricity. After electricity/insurance/data/taxes/other expenses - I’d guess it’s anywhere between 0% and 7% yield.
Odds are good that Anthropic abandons the deal before the depreciation schedule completes. Who is going to rent the GPUs then?
5.5 year depreciation is only on the chips. Power, networking, cabling, the actual construction of the building is probably closer to 60% of that number. Also, they are only renting out colosus 1 ($10B), not colosus II ($18B).
So, it's 10B, with $4b of that being attributed to a 5 year depreciation. The rest of the facility probably has a depreciation of around 20 years, and you can easily swap out GPU's, TPU's, Trititum, Tesla's own GPU's, as they start failing, so the normal depreciation curve only "kinda applies here".
There is no interest, as he was venture funded not debt funded.
Electricity is coming from Nat Gas Turbines, so again even though you have a some depreciation on the equipment there, you are getting it for far below meter prices.
So, from my math, he gets ROI on the chips in 3 months, and ROI on the entire facility in 9 months? That's literally the best investment of all time.
Generating your own electricity really isn't that much far below grid prices - you'd typically be looking at a central estimate of 15 years to get a return on investment for a large Combined Cooling and Power cogeneration setup.
But, crucially, there's a huge level of uncertainty. You're making bets on the relative cost of nat gas and grid power, both of which have historically shown extreme volatility over that sort of timescale.
The level of risk means that very few proposed schemes go ahead in full unless there's some other factor involved (lack of sufficient grid connectivity, availability of subsidies).
> There is no interest, as he was venture funded not debt funded.
Who is "he"? SpaceX has $20bn of debt and $9bn in "other financing" corresponding to "obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions."
Edit: Page 122 of the S-1. They are paying SOFR + 0.75%. So around 5.5% on the $20B.
I'll keep the below for integrity sake:
Well, i'm sure SpaceX bought Xai using some kind of prefered share/debt financing, but that's not to say that XAI had the original debt financing.
We can never know what the exact details, and the exact financing is on this debt. Maybe it's tied to Elon's Tesla Shares, Maybe it's tied to a convertible, maybe it is actual "loans" from a bank. Even at $9b in debt, and you naivly assume they are paying 10% (Def not 20% as OP claimed), you are paying $900m a year, for the entirety of xAi. Including that in the calculations to rent out the entire compute is folly. Not only is 900M not directly attributed to c1, cause it's split between c1, c2 and all the training runs, but you can never verify the interest. And even then, one month of this deal pays for the whole year of interest expense.
So go ahead and lower my estimate by 10%... doesn't make a difference.
If only there was some SEC filing available disclosing additional information about the 6-months $20bn bridge loan which was on the news four weeks ago…
oh, nice! thanks for this. This confirms spaceX has $20B at a SOFR + 0.75%. So around 5%-5.5%. Found on page 122 of the S-1. I assume they will retire all debt with the $50B raised from the IPO, plus have $30B to... dominate with starship. If starship is around $100m per launch right now, they can launch 300 ships with the IPO. or 30,000T in orbit.
> If starship is around $100m per launch right now, they can launch 300 ships with the IPO. or 30,000T in orbit.
Uh, starship is still a development program. There's 1 launch pad right now able to launch V3. No starship has flown with an actual live payload. The starlinks going out the PEZ dispenser are probably the only thing launching on it anytime soon.
Basically, Starship launching thousands of tons to orbit isn't constrained by money but by time.
But you are right to call out the launch infrastructure as the true bottleneck. They have 3 pads currently under development. So in 6-9 months they'll have 4 operational pads.
Also, how do they heat tiles hold up? How fast can they catch, refurbish and relaunch is what remains.
I'm confident, and will be putting my money where my mouth is (By investing in the IPO) that they will have useful orbital payloads this year.
yes, it says they will be paying for "additional capacity" at a reduced rate as it becomes availble in May and June.
Essentially, they are using most of C2 for Grok5. That training run is coming to an End, and they will be leasing more capacity. So taht 1.25b per month will go up to around $1.5B-$2B per month as they finish grok 5.
So the 1.25B is for c1, and the revenue will scale into c2. No idea how much scale, but c2 is almost double the compute? So potentially $3b a month, but probably closer to $2.5B since they get a discount.
At the time of the announcement IIRC the deal was only for Colossus 1. Is Anthropic also leasing Colossus 2 new?
At the time the consensus narrative was that SpaceX no longer needed Colossus 1 for Grok and that was why it could be leased to Anthropic while Colossus 2 would handle Grok training and inference. Does Anthropic also leasing Colossus 2 change this?
Right. This compute still being powered by an illegal amount of gas turbines in a residential neighborhood?
Claude is eating so much compute, the threat of that power being tuned down by lawsuit (rightfully) is worth the risk to Anthropic in the short-term. Instead of declaring "bubble", I'm just going to say that's so crazy.
Yes and both are getting sued? I wouldn't necessarily classify the NAACP as environmental activists, but they are concerned with the wellbeing of the people they represent.
"I suspect your definition of a lousy place to build infrastructure in might overlap with my definition of a relatively good place to live."
Which is quite close to the standard NIMBY attitude: "I want good grid, cheap electricity and other infrastructure, but not in my backyard. Either someone else's, or somewhere where no one lives at all."
Can't you see the fundamental problem with that attitude? We mostly live in densely populated regions. We do need roads, rail and power plants to sustain our way of living, you too.
Of course we need infrastructure. It’s annoying when a project that seems like a net good is held up due to environmental concerns, but this planet is very beautiful and I’d like to be able to continue to enjoy it.
In practice, everything is tradeoff. Your house, and mine, and everyone else's here stands in some place which was once a beautiful natural spot. But few people would support tearing their own homes down in order to restore that beauty.
A technical civilization of 8 billion people cannot exist without doing at least some damage to the environment, but most of the time, outright bans on further development are demanded instead of some reasonable mitigation.
Maybe you really deeply care about the environment. Most of the NIMBYs I met don't. When it comes to infrastructure, housing etc., the environmental concerns are quite often just a legal tool, and the real motivation of the people who wield them is more along the "I have mine, I don't care about yours, just sod off".
has anyone done the math on:
1. cost to build out and run the data centers
2. cost of compute (hardware and energy)
3. depreciation of legacy GPU and thus value at the end of 3 years.
And then compare the $45B revenue from Anthropic to see if it's mostly break even or if one of Anthropic/SpaceX came out ahead on the contract.
Maybe it is a win/win. Anthropic gets desperately needed compute at a fair price. SpaceXAI sells compute at a fair price and gets desperately needed revenues.
XAi purchased Teslas allocation of GPUs, in exchange for Tesla purchasing XAis allocation of GPUs at a later date. This they claim was done because Tesla didnt have their datacentre ready to receive those gpus at that time. I dont see how or who was robbed here.
SpaceX is already indicating their strategy on this, because they’re renting their last-gen data center to Anthropic and keeping the current-gen data center for themselves. Rinse and repeat.
Ed Zitron https://www.wheresyoured.at/ has done the math, and it's pretty bleak. His somewhat voluminous rantings contain raw figures on investments, data centre builds, energy availability and depreciation.
He believes Oracle has already signed it's own death warrant, and that Meta is close behind. MS, Amazon and Google have massive revenue streams to sustain them, but looking at the numbers, each has to earn from AI the equivalent of their existing real revenue. I can't see that happening.
And he believes from multiple perspectives of the data that Nvidea are either massively overstating their GPU sales, or that there are warehouses full of unused GPUs. There just isn't the energy capacity to run them all, let alone data centres to put them in.
He is complaining that there are no 1GW+ data centers, with evidence like this:
> For example, CNBC’s MacKenzie Sigalos reported in October 2025 that Amazon’s Indiana-based (allegedly) 2.2GW Project Rainier data center was “operational,” but only seven out of a planned 30 buildings were actually operational, and her comment of “with two more campuses [of indeterminate capacity] underway.” This comment was buried two videos and 600 words into a piece that declared the data center was “now operational,” with the express intent of making you think the whole thing was operational.
But if you read the report that "buried" comment is far from buried - the whole thing is about how it is still under construction!
Of course 1GW data centers don't all come online at once! You get them online in the parts you can as soon as you can!
From a previous comment of mine – the quotes are all from a single article:
He comes across as just a ludicrously unpleasant, spite-filled person.
> I'm fucking tired of having to write this sentence.
> I am so very bored of having this conversation
> I don't care about this number!
> Shut the fuck up!
> This isn't the early days of shit.
> Didn't we just talk about this? Fine, fine.
> $3.25 billion a quarter is absolutely pathetic.
> This isn’t real business! Sorry!
> He said in one of his stupid and boring blogs that
> This man is full of shit! Hey, tech media people reading this — your readers hate this shit! Stop printing it! Stop it!
> It's here where I'm going to choose to scream.
> Dario Amodei — much like Sam Altman — is a liar, a crook, a carnival barker and a charlatan, and the things he promises
are equal parts ridiculous and offensive.
> Why are we humoring these oafs?
> Despite Newton's fawning praise
> Nobody talks like this! This isn’t how human beings sound! I don’t like reading it!
> Ewww.
> I'm sorry, I know I sound like a hater, and perhaps I am, but this shit doesn't impress me even a little.
> I know, I know, I'm a hater, I'm a pessimist, a cynic, but I need you to fucking listen to me: everything I am describing is unfathomably dangerous
> expensive, stupid, irksome, quasi-useless new product
> I know this has been a rant-filled newsletter, but I'm so tired of being told to be excited about this warmed-up dogshit.
> I refuse to sit here and pretend that any of this matters.
> I'm tired of the delusion. I'm tired of being forced to take these men seriously.
When I read this kind of thing, it’s very apparent that this is being driven entirely by spite not insight. He’s just so angry about everything. There are 57 exclamation marks in this article!
In the 90s we had people talking like this about The Internet. They're all over on FB now, with a detour in between to say stuff like "my isp can track me!?"
If this doesn't completely destroy any benefit of doubt that people have in Dario, I don't know what to say. The guy has been speaking out of both sides of his mouth since the foundation of Anth. Over and over he repeated that Anth's investment in compute would not be reckless; it would represent sanity and be proportional to growth. Over and over Anth told users that the models weren't nerfed overnight, we were just prompting wrong. As expected, Anth simply failed to make the early compute deals when everyone else did, and are now forced to be on the wrong end of price gouging just to keep pace. Actions speak louder than words.
It's true that Anthropic didn't buy as much compute as OpenAI. But OpenAI's compute purchases are one of the largest investments in human history.
It's also true that they are now scrambling for compute, and might be paying more than OpenAI paid. But now they have the revenue to justify it!
To me it is the opposite of "speaking out of both sides of his mouth" - he's been consistent in his "we won't be reckless in buying compute too far ahead of demand" message.
I don't think this is right. Anthropic's growth in the last 6 months went hockey stick in quite an unexpected way (eclipsing OpenAI), so they've done what is sensible - they've increased their compute spend. I don't know if what they're buying from SpaceX is good value, I think there's plenty of reasons to think they got a fine deal. X AI failed. Everyone left. So SpaceX is sitting with a bunch of empty server farms. Yes, Anthropic are desparate for compute, but SpaceX are desparate to IPO a company with double digit billion dollar revenue for $2T so I think there's good reason that this deal represents reasonable value.
skeptical of someone who talks about anthropic enough that they think 'anth' is a reasonable abbreviation lol. maybe youre not wrong but youre definitely biased and not coming to conclusions in a rational way
So you're complaining that his actions matched his words?
He didn't make compute deals until he saw the growth necessary to justify them. As a result, they're paying over-the-odds compared to if they'd have make deals earlier. Maybe that was a poor business decision, but I'm not sure how it represents speaking out of "both sides of his mouth"? Sounds like he was honest.
Even if we consider what they pay for colossus high (I've no idea, I haven't looked at the numbers), wouldn't this a bit be different from "investing in infrastructure"? They're not building the DC themselves, they're just renting, they can scale down to 0 anytime and not have pressure to recover costs, they don't have debt on the HW, etc.
At least from how it's described in the filing, it sounds like they're committed through 2029 on the deal with SpaceX. So they can't just pull out without a massive lawsuit from SpaceX.
If my napkin math is right, Anthropic will make SpaceX/Xai whole on the initial investment for Colossus 2 + operating costs + a small profit by the end of the contract. No massive profits, although they may be able to fudge accounting to make it seem that way.
There is a lot of money coming in from industry, actually an exponentially increasing amount of money - money that would otherwise go to employees is now going to AI companies. There are more startups than you can shake a stick at that are basically creating virtual workers for xyz task and selling them to companies. All that money is funneling back to AI companies. It's a gold rush and employee salaries are the gold.
You can quibble about the exact numbers, but I think it’s fairly clear at this point that inference is profitable with decent margins. Like you say, unit economics are more interesting than the profitability of the company as a whole.
This thing is going to explode. From this I have to imagine OpenAIs numbers are also going to be much worse than people imagine / what has been shared.
What would be interesting to know how much did it cost xAI to build it ? Ai says between $18-$40 billion to just build, without running cost, but no idea how close to reality this is.
Yes and no. They paid what everyone else pays for those gpus. NVIDIA make the profit and leaves crumbs for the rest. For other components they paid less, but since the gpus are the majority of the cost…
Anthropic is getting capacity from Colossus 1 not Colossus 2 it sounded like. The initial colossus capex was under $5B, making that an even more astounding payoff.
Edit: S1 states both are being leased so the 20-25B initial investment probably more relevant
I thought I saw a report from someone at Google saying that they were still running 7+ year old hardware because of demand. Even if it is not state of the art, if it generates more than the electricity costs, keep it running until it dies.
The article says:
In December, an internal Nvidia memo seen by CNBC said, “Elon prioritizing X H100 GPU cluster deployment at X versus Tesla by redirecting 12k of shipped H100 GPUs originally slated for Tesla to X instead. In exchange, original X orders of 12k H100 slated for Jan and June to be redirected to Tesla.”
Sure, either side could cancel. But Anthropic needs compute, and they found it in SpaceXAI. Why would they cancel the deal unless they don't need more compute or if they could get compute for less elsewhere (but where would that be realistically)?
They certainly have some big shoes to fill. But I'm glad they didn't die with their boots on, and got their foot in the door at this new opportunity. It certainly didn't help that they were running on a shoestring budget.
Whoa. I've said before, but I think Dario severely underestimated the coming demand and ensuing need for compute, and would need to pay through the nose when the crunch hit. I suspect that Google deal also worked out better for Google. This data point supports that view.
While Altman got laughed out of the room as a "podcasting bro" asking for trillions in investment in compute, Dario was going on about how difficult it is to forecast capacity on the Dwarkesh podcast. Seems like a major unforced error on Dario's part. What I cannot understand is how they both came to such different perspectives; my best guess is that ChatGPT has so much more traffic that OpenAI could gauge the trends much better.
This won't hurt Anthropic long-term of course, but this won't look great on that balance sheet, that too right around the time they plan to IPO.
They have different personalities. I can only imagine Altman wants to stay on top of the chaos, and believes he will come out ahead whatever happens, while Dario is trying to stay realistic and mitigate worst-case scenarios.
Oh, for sure it could be much worse -- they could have been in xAI's place! ;-)
But while this is a "good problem to have" it would have been an even better problem to avoid in the first place, because it seemed avoidable.
Now, I'm totally armchair billionaire-CEO-ing here, but anybody with any compute has been so obviously capacity constrained for so many quarters all the while scrambling like mad and spending obscene amounts of money to acquire even more compute. With lead times of 2 - 3 years, something Dario explicitly called out on Dwarkesh, it seemed prudent to acquire first, ask questions later. Worst case, they could have rented any extra capacity out, like Elon is doing!
Outsiders are reasonably questioning this mania but Dario, as one of the biggest believers in AI and even AGI, showing hesitancy seems uncharacteristic. I wonder if this is one of those rare cases where it would have been better to drink his own Kool Aid!
Anthropic got somewhat lucky that Elon wanted to stick it to Altman, but boy, even then he drove a hard bargain.
That's fair, I'm not a finance person, just meant to say that this is costing them way more than they would have liked at a critical stage in their corporate evolution. I'm curious though what your take is.
Crazy this company will IPO for >1B with such bad financials! That said, Starlink seems to be a real cash machine, not as good as ads but enough to support AI bets.
The numbers overall are worse than I expected. I can't believe Serious People are talking about putting this in the market at a trilly.
> Starlink seems to be a real cash machine
It has been said more than once that Starlink financials cannot be analyzed apart from SpaceX financials. Very easy to move the launch costs from one entity to the other depending on whether it is more beneficial to show more revenue for SpaceX or more profit for Starlink.
The use of EBITDA for Starlink is also interesting. For something like terrestrial fiber, I can imagine thinking that there’s a lot of depreciation on the books, but that most of the equipment keeps working after the depreciation period or is cheaper to replace than it was to buy, and that the right of ways and attachments don’t really depreciate. But Starlink satellites are actually gone at the end of their useful life.
I have not dug into the filing to see how this really breaks down.
Starlink satellites can likely have their life extended by quite a bit, like past constellation satellites did. But it doesn’t really matter as SpaceX is still upgrading capability like crazy. Starship will mean a factor of 10-100x Starlink capacity expansion.
I mean, the SpaceX bet is that what you mention for terrestrial fiber
> or is cheaper to replace than it was to buy
will also hold true for cost of mass to orbit. There's a lot riding on making that prediction come true for SpaceX, hence all the CapEx going into Starship.
What is a realistic scenario for how this plays out? After index funds mechanically buy SpaceX, the insider lock out expires and they all sell - how low does SpaceX go? Will reality hit and a $2T valuation instantly drops to a more "reasonable" value for an unprofitable company? Will it stay in the clouds?
Tesla seems in a world of hurt unless robots start making space centers from moon rocks, yet that is also defying gravity.
We can thank Nasdaq for lowering the standards to fast track SpaceX into an index with only having 5% float. Soon after it lists on the major indexes, we are gonna have some turbulence.
That's kind of the whole point of a stock market. If you already had a solid revenue stream, you wouldn't need investment.
These numbers would be kind of typical for a software play, since the great thing about software is that you write it once and then sell it many times. They're making a similar assertion for hardware: "fund rocket ship design, and sell it many times (i.e. lots of launches)".
The weird looking part to he is cramming xAI into it. It's a completely different business with little overlap that I can see, in a crowded market that they are far from leading.
> The weird looking part to he is cramming xAI into it. It's a completely different business with little overlap that I can see, in a crowded market that they are far from leading.
My personal theory is that Musk wants to roll up all his companies into a mega corporation that he fully controls, and this is part of the process. I expect Tesla and SpaceX to merge years down the line.
Of course, the counter to this thesis is that he didn't roll in Neuralink or Boring Company. But its probably that these three companies + Tesla are the ones he's most passionate about.
Raising the market cap of Tesla is one of the requirements for Musk's nearly $1 trillion pay package. Merging companies is a lot easier than trying to sell more cars or non-existent robots.
These numbers would be ridiculous even for a software play. < 20B in revenue at almost 2T valuation? That's almost 100x revenue multiples at a not so great revenue growth rate.
xAI "acquired" Twitter, so rolling it into SpaceX is a way to hide a badly distressed asset inside a potential moneymaker and hope nobody notices. Like mortgage backed securities.
There were talks in the past about spinning Starlink out. Perhaps the thinking that led them to keep Starlink in is the same thinking about their new data center business (what they got from xAI and will grow in orbit in the future)
Spacex has been playing fuckfuck games in recent months to boost their subscriber numbers.
The day after I got my dish I got an email that the price of the base plan would double. They also sent residential subscribers "free" dishes, which a ton of people took them up on right before the price change
That alone will probably do little, due to contagion effects. Simply finding an index which excludes it might not be enough if it still shares other similar underlying stocks with indexes that do include it.
Can someone ELI5 Starlink revenue sources? At the core, it's an ISP (but served from space). What does Starlink have that differentiates from any other ISP? Is it because the TAM is global? That may be true at the margin, but I am sure most eligible subscribers would prefer a land-based system (eg no one in SF is cancelling their Xfinity to use Starlink) so how much is really left for them?
It's because they're good speeds in a lot of places that couldn't get good speeds before. It's also great for mobile work sites, i.e. construction sites, drilling camps, other b2b service businesses where a bunch of portacoms rock up to a site. Anywhere it's mildly hilly you can't actually assume you'll get a signal outside of town but a satellite dish basically guarantees that. Even if you can guarantee your in a spot long term the upfront cost of fibre or a tower may not balance out as cheaper than just eating the higher bandwidth costs.
It's also worth remembering that in a lot of places with low density it isn't appealing for competitors to build out to, so there's a lot of markets where it's a no brainer to switch from the local monopoly to starlink because the price was already inflated and it was worse service.
There's a huge number of people in developing countries (think Indonesia, Brazil, Nigeria, Kenya, Mexico) where the country just lagged on internet build out. Now in these countries the price of a subscription will be a lot lower, than the >100$ you pay in the US, but since (simplified) the only additional cost per customer is the cost of the end terminal, it's still worth it for the ARR. The break-even point per customer will just be further in the future.
Also I wouldn't underestimate the amount of people living in rural areas of the US, Canada, Australia or Germany.
In NZ you can buy add-on so you can text/fb messenger/maps/weather and even apple music thru your phone via Starlink. I can't imagine this being super popular add-on, but if telco just rolls that into main offering I'd assume eventually that will be new norm.
I think the ISP story is a bit shitty outside some niche markets (mobile internet on airplanes and the like), but the military applications are massive. Everything is moving into drones and Starlink terminals are small enough to fit on them all, while being essentially unjammable, giving you a coarse location signal on top and plenty of bandwidth.
It's pretty much expected that a rapidly growing high tech company is gonna have a lot of losses and debt right? They're just spending huge amounts of money on capex. Not doing so would be like floating minerals in Starcraft: symptomatic of bad macro.
Assuming renting their datacenters doesn't cost them any more than running them for themselves, and plugging 15B a year of revenue (which ignores X entirely and other forms of revenue) you get 5.4B income, more than Starlink 4.4B income (which is slightly subsidized by the launch segment)
electricity is a major cost. that 1.5B/mo is part for renting the hardware, part paying the lease on the building, and a significant part (I have no idea what %) is paying for the electricity.
Starlink is giving away the satellite dishes for free to grow customers. These dishes are expensive to manufacture and cost the company hundreds of dollars each. The estimated manufacturing cost of a Starlink standard dish is around $400.
Which is a fine thing to say, but CAC vs LTV (customer acquisition cost vs lifetime value of the customer) is the underlying equation. If it costs them $150 to give away a dish, but they get, say, $300 before the user churns, they still come out ahead.
If any company can put profitable data centers in space, it will be SpaceX. But I doubt that any company can. The difficulties of the physics and engineering of cooling seem like they will always outweigh the advantages of keeping your data center on Earth.
I am annoyed by the insistence that the value of this company comes from something that no one has been able to show is possible yet without multiplying it by the obvious risk factor. And they seem to have got other companies like Alphabet[1] and Anthropic to publicize the idea, to give it more credibility.
I do not want my pension to automatically buy shares at $1T, but it looks like it will have no choice.
This: "I do not want my pension to automatically buy shares at $1T, but it looks like it will have no choice."
They know the game very well. They know that if they manage to pump up the valuation high enough - they will be automatic money flowing in - regardless of actual valuations.
The unit economics of orbital DC just doesn't work with today's technology. Assuming 0 ongoing OpEx(free energy), the launch cost of the satellite itself, along with solar panels, radiators as well as the chip themselves just doesn't make sense given the ~5 year operational lifespan of both the chips and the satellites.
LEO satellite orbits decay. e.g. starlink sats are ~5 year lifespan. But assuming a higher, more stable orbit, how do you replace them? There will be tens of thousands of these orbital DCs, so not really feasible to go to each one to replace some chips.
Or alternatively I guess a few massive ones, but those would need to be truly massive to accommodate the solar panels and radiator fins required.
How do you price regulatory restrictions? The laws governing space are more lax than those governing how much chromium Tesla can dump into their waste water. By building in space, they get to completely sidestep any regulatory issues on Earth, like not being allowed to build what they want, wherever they want, how they want. It's annoying getting permits to do whatever on my house, but for businesses, it's a real problem.
The biggest regulation of building in space is... where do the debris go. You are tightly monitored for how much trash reenters into the atmosphere, so there is still SOME level of regulation.
There are safety regulations that require things roughly like, "to prevent harm to planes in the air and people on the ground, either control where your satellite re-enters so or make your satellite entirely out of components that are almost certain to burn up on re-entry".
As far as I can tell, there is no environmental regulation of how many kilograms of aluminum, silicon, etc. being added to the Earth's atmosphere when a Starlink burns up during re-entry.
elon has a great wall of china's worth of plaques with comments exactly like this, and his companies are still worth more than their combined weight in gold
It’s surprising just how low the revenue is for SpaceX. There are some 700+ companies with larger revenue figures, and yet just a small handful exceed SpaceX’s proposed valuation.
In 2026 one gets the impression that SpaceX is a huge company, among the largest in the world. It’s wild to see that its business volume is smaller than Northrop, smaller than Apple’s peripherals alone, smaller than Avnet (heard of ‘em?).
Plus Uber's only increased their revenue 11->14B in the last 5yrs. SpaceX has added +$4B since 2024 and have fanciful plans in multiple markets that only a gambler like Musk would risk proposing.
you're right, looks I mixed up some numbers while googling. their revenue went from 11->53b in 6yrs which was very off from my original comment
Which honestly surprises me, Uber was called a VC pump and dump scheme for years on HN before their IPO. Maybe that's the better lesson here (dont take financial advice from HN comments)
Uber WAS a pump and dump. Insiders used the public for exit liquidity and any public shareholders got stuck with a pretty crap stock. Uber went up 100% from IPO to mid 2025, Google went up 400% in that time period (and I picked 2025 to avoid the huge AI runup we have seen).
It was hemorrhaging in many cities using extremely profitable cities like London and NYC to keep their global competitiveness.
Uber was able to pivot and become financially sound with two moves:
- Uber Eats becoming first party delivery to restaurants (it started as a limited selection of items from some restaurants and quickly evolved into a Doordash-esque competitor)
- Uber launching a 1B+ RR Ads business - margins on this are obviously incredible
Both of those combined with discipline in their ridesharing business (exiting the China market with a sale + stake, dumping their self-driving business when it became a money sink) have led to a recovery in their stock price, but it is FAR from the crazy expectations set up for VCs. I expect those in the last round didn't get a great return, but obviously folk like Benchmark exited like kings.
I'm guessing COVID also played a major role. The other narrative around Uber's IPO was gig-work was evil and should be banned, then pandemic hit and everyone started using uber eats constantly. Looking at their revenue growth it started doubling after 2020
Personally, I always underestimate how much exploitation consumers are willing to experience before leaving a brand. I thought Facebook was reaching the peak of its ability to shove ads into its products in like 2011, boy was I wrong.
Uber successfully displaced most of the alternatives, slowly raised rates, and maintained operating margin while their fixed costs didn't have to scale as much. Post Travis they've, financially, nailed it.
Revenue is not the right metric when you compare space trips to trips inside a city. The more relevant numbers are EBITDA, Operating cash flow, Profits.
SpaceX is incredibly exciting, but I was skeptical when XAI and Twitter were rolled into it. The S-1 here makes it even more disappointing.
I did want a piece of SpaceX but the valuation here is pretty eye watering compared to the fundamentals. I don't think I can put my money into this, although I suspect it will still do gangbusters based on hype and momentum.
Its also a real shame that SpaceX's competitors have not been able to get the same level of momentum. I know Starship has been delayed but its still hard to argue with total mass to orbit they're achieving right now.
SpaceX would be an interesting IPO without XAI. It is hemorrhaging money and is in what, 6th place in the AI race while hemorrhaging X subscribers every month. Theoretically the company could focus on what is profitable and be strong fundamental company, but this is Elon we are talking about he is going to do whatever he wants to do.
To be honest, it could be one with XAi too. Im no fan of Musk and Grok but the deal with Anthropic pointed out by other contributors isn't nothing. And I don't think SpaceX losing money at this stage isn't quite the problem that people think it is -- as someone who as worked at companies losing money and then going on to make quite a bit. Revenue growth is there.
The issue is that none of this is really worth $2T now. Yes, you might expect that SpaceX could launch Starship, build space-based datacenters, get a good foothold on the AI market, and grow Twitter. But you don't want to pay for future performance now, you want it to be discounted because you're taking on the risk that those things don't happen. $2T feels like expecting that story has already been actualized.
The deal with Anthropic, even if good, doesn’t seem repeatable.
Right now, quite a few companies are discovering that the can turn inference capacity into revenue. Anthropic also can turn inference capacity into happy customers and mindshare, and they can turn lack of inference capacity into sad customers that might jump ship to OpenAI. And Anthropic wants to IPO, and they want to be as close to #1 as possible. And this whole phenomenon, industry-wide, has caused the demand for fancy chips to outstrip supply. Two years ago, DRAM was a low-margin industry, and now it’s not. If you bought a 5090 when it came out for around MSRP, you could resell it now at a healthy profit.
xAI appears to have effectively resold their datacenter at a healthy profit.
Sure, maybe xAI will try to bet that they can build another datacenter and sell/lease it at a healthy profit, but lots of players are trying to make that bet (bottlenecked by power and chip availability). And those bets could easily fail. And the players who don’t have adequate competition (SK Hynix, Micron, TSMC, etc) are going to jack up prices to try to capture more of the upside. And players like DeepSeek and Alibaba want to drive down the need for FLOPs and DRAM, because they don’t have enough and because they have a shortage of those but they don’t have a shortage of excellent AI development talent.
Oh, and China will build its datacenters on the ground, backed by more solar capacity than SpaceX can even dream of launching, and those datacenters will compete. And CXMT and Huawei will do everything in their power to ramp their own production, and SpaceX is not about to get first dibs.
On the bright side, Tesla’s AI5 finally taped out, and SpaceX will surely get some of those.
So maybe SpaceX will find $20bn of GPUs that they can resell or lease for $40bn of discounted revenue, but they could just as easily not find those GPUs or they might only get $17bn of discounted revenue and lose money on the whole affair.
The assumptions are that more compute (energy, chips) is needed to get more capable models AND more capable models will result in more spending by companies. That has been correct so far.
Yes, energy and chips are some of the bottlenecks. SpaceX has a potential solution (solar powered data centers in orbit) where they are uniquely advantaged - no one can launch as much or as cheaply as they can.
Datacenters in space might help with energy (that’s a big if, but let’s suppose it works out). How does it help with chips? The chips are still made on Earth, but once you launch them, you add some radiation exposure and you also add a dramatic demise in five years or so. Meanwhile an RTX 3090 still sells for $500 or so.
The deal with Anthropic gives me more pause about the whole market. More circular spending. They are all propping each other up making it look like they have more revenue than they really have. I think Open AIs S-1 will be just as crazy. I don't think there is any rationality or plan to all of this. AI doesn't pay for itself. It won't for a very long time.
Not really, this seems to be a very traditional "we need more cores, captain!" and "here's a datacenter with cores" rental.
Anthropic has grown 80x this year (according to their CEO). They are probably desperate to buy more inference compute for things like Claude Code, not for future investments. In the mean time, Grok seems to not have enough traction to utilize all the spare compute xAI has built with Colossus I and II.
This is one of those cases that shows that Elon is exceptionally better at atoms than he seems to be on the software side.
I think this only applies currently for the Nasdaq index, and the only Nasdaq index fund that comes to mind is QQQ. I think fewer people are currently being hit than are worried about it.
Yeah, but on the normal, longer timeline? The fuckery around indices was that Nasdaq changed their rules for it to include it much more quickly, but that was limited to Nasdaq, no?
They aren't being strong-armed, NASDAQ is literally changing the rules to appease Musk and get in on the grift. Move your money elsewhere while you still can.
Its unfortunate that its being fast tracked and I'm really annoyed that NASDAQ is doing this. But I think that the impact should be relatively minimal, at least for the funds I hold. I really just find the transparent grift annoying.
Hopefully their competitors will keep advancing but that just reinforces that how hard space is and that SpaceX is doing things no one else currently can.
Their stated TAM is bonkers. A total of $28.5 trillion: $370B Space, $1.6T Connectivity, $26.5T in AI. With AI becoming more and more commoditized, the AI number is insane.
Kardashev Type II is mentioned three times in the doc.
> We believe the next paradigm shift for humanity is the creation of a resilient, perpetually expanding spacefaring civilization that drives continuous innovation across new frontiers, ultimately propelling us to Kardashev Type II status—a civilization that harnesses the full energy output of our Sun.
To be fair, he's not claiming here that SpaceX will accomplish this themselves, solo.
Shhh, that's SpaceX's real play. Put a giant sun shade between the Earth and the sun, and make everyone on Earth pay for sunlight. No pay? No crops. No food. Solves global warming.
Where I'm from, TAM has to be real enough that somebody else is making money off of it. But if EBITDA doesn't count the cost of replacing your short lived satellites, who is to say what TAM means anymore.
Yes but only if its added before the index funds. Let's just hope that the nasdaq and the other markets just don't take spacex (Nasdaq is literally bending its rules to accodomate SpaceX)
The worst thing is that we don't even have a say in all of this and chances are most likely that its gonna IPO and get listed on the index funds soon and once it gets into Index funds, a lot of collateral damage might happen.
I must say that I am not quite optimistic about there not existing collateral damage, there is happening a lot of corruption within financial markets in general with bending laws. The worst part is that we all would/might be the most impacted by it all
Total market cap of NASDAQ 100 (QQQ) is $40 trillion, SpaceX joining that and immediately going to zero would be a 5% drop, big but not the worst we've seen.
If SpaceX joins and goes to zero, that is firstly a 2 Trillion dollar wipeout and the whole market would absolutely go completely crazy and the market would be so spooked as @etempleton suggests that instead of it being a 5% drop, it would be more like 50% (don't quote me on it) but still, the markets would absolutely drop substantially more than 5% & it might erode the trust within financial markets altogether for many people too because of such massive wipeouts of funds.
So be it. What's the alternative ? Continue a bubble ? Ride on the 'FSD by the end of the year' or 'thousands of Optimus next year' for the next 10 years ?
The guys is openly lying and clearly a drug addict at this point and people think he's not cooking the books ?
Musk empire will end up being a much bigger scandal than Enron ever was. It's just a matter of time until it unfolds.
Tesla is mentionned 87 times. And even they explicitly state that they have strategic collaboration. They supposedly biggest projects are developped together (Macrohard, Terafab - all fugazzi, but still).
Related party transactions are close to a $1 Billion in 2025.
The idea that 100s of global pension funds don't do their due diligence when investing 100s of millions or billions of their members' future retirement funds is extremely naive. With sincerity, I hope you can find a way not to be so emotional about what Musk says and be more grounded in what his companies and their employees are doing.
Investing in SpaceX is one thing. Investing in SpaceX that is now merged with several other failed companies that each incur massive yearly additional losses.... let's see how long those funds still hold SpaceX.
Arguably Ukraine is still alive because of StarLink.
Granted, Russia is trying hard to make every mistake in the book, but StarLink’s benefits for UA and cutting off RU units from StarLink was very advantageous this year.
For those who don’t know, for a ~$400 terminal, UA can C&C a medium-long range drone/ plane or cruise missile which has low latency, massive global coverage, and which is resilient against EM jamming (apparently the terminal handoffs from one satellite to another make it ideal for resisting an enemy’s jamming efforts). Also the obvious: it maintains MUCH better resilient comms between front lines and HQ (RU depended on this, but they were cut off a few months ago, causing coordination chaos).
There is discussion that if Taiwan gets a similar deal to Ukraine for StarLink access, it makes the porcupine strategy much more viable.
Conversely, any country which can’t get access to it loses a massive tool in the tool chest.
And sadly, it means that if the US continues to be fickle with allies, those allies may not be able to rely on such a valuable tool.
They make some incredibly outlandish claims over their total addressable market, one can only wonder where $26 trillion dollars in expected AI revenue would even come from, with 22T of that being from "enterprise" when they have no real products yet.
The whole thing looks to be proped up by Starlink which seems to be a genuinely solid business. xAI looks to be costing twice as much as it produces, and we dont even have good numbers for this yet since the deal is so new.
This feels like WeWork but if WeWork also owned a successful coffee shop.
So this confirms that SpaceX was making a lot of cash and plowing it back into R&D, and that the X/Twitter/xAI merger is concrete shoes on the good parts.
Does xAI have some sort of edge over Anthropic when it comes to buying future compute?
If not, this just seems like grok not being as successful as they would have liked and then finding some other use for the compute they had bought for it while at the same time Anthropic can’t keep up with demand for claude.
Re your first statement, the problem is that there isn't enough compute out there. xAI built their own data centers (and plan to built more -> in orbit). I don't think Anthropic has done that to the same extent and it seems like they will partner with multiple vendors who can provide the compute they need.
"in May 2026, we entered into Cloud Services Agreements with Anthropic, an AI research and development public benefit corporation, with respect to access to compute capacity across COLOSSUS and COLOSSUS II. Pursuant to these agreements, the customer has agreed to pay us $1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee. The agreements may be terminated by either party upon 90 days’ notice."
That's because they use other terms like "Falcon 9/Heavy", "Starship", "Super Heavy", "launch vehicle/system", "booster", "upper/lower stage", and "spacecraft".
"XAI, the artificial intelligence company Elon Musk created and recently merged into SpaceX, is not helping on that front. The filing shows SpaceX directed around 60% of its capital spending in 2025 to its AI division, or around $20 billion. And yet that division — which houses the chatbot Grok — lost billions last year, and only grew revenue by about 22%. That’s far below the reported revenue growth rates at frontier AI labs."
if & when the market corrects - the crash will be one of the ages.
there's 3 businesses rolled into 1 entity as a cover to take money from gullible retail investors. SpaceX the launch business is legit. the other 2 are r fake n losing money n yet will be money will be stolen the retail investors.
anyone with half a brain knows the TAM in the S1 is like 350Bn of the space launch business - the 28TN is just fake.
"Mr. Musk or his affiliates may become aware, from time to time, of certain business opportunities ... and may direct such opportunities to other businesses in which they have invested."
"Under our charter, Mr. Musk and his affiliates are not restricted from owning assets or engaging in businesses that compete directly or indirectly with us"
Pg. 56
I think this part is interesting considering Tesla shareholders seem to have lost out on developing (x)AI (AGI?) internally.
Feels risky to push the S-1 a day before the latest starship launch. If there is a catastrophic failure OR a perfect success it feels like it would be material here.
Also I’m concerned that if AI “works” (ie: country-of-genuses-in-a-box) that the moat of reusable rockets decreases substantially. What would stop Northrop from vibe coding their own starship?
That's an interesting use of the word material. The problem with the IPO is that it's vibes based. There's already a lot to doubt about starship. If there is some large failure on this flight, it won't change the actual material value, or lack thereof. But it would shift the vibes.
This is going to make so many smart people working in hardware soooo fkin rich. We are about to witness an absolute flood of Ex-SpaceX employees start and invest in companies targeted at space and general manufacturing and hardware. This is how we win.
We heard for years that other companies in the launch business (ULA, Arianespace) were just incompetent, ossified businesses, and that SpaceX was revolutionizing the field; and now we discover that SpaceX, after all their effort, is barely profitable and has to run the clock by diversifying and seeking an IPO...
How much do reusable launchers really bring down costs? Were the companies that elected not to go this way (almost all of them) incompetent or did they correctly assess the profitability problem of such a strategy? And how much does SpaceX market share is the result of actual efficiency vs. dumping the price with investor money to try to bankrupt competitors and corner the market?
TL:DR: where would Arianespace be today if they had elected to try reusable rockets and ended up at the same point as SpaceX? Would it be seen as a good gamble or a waste of taxpayer money?
(Note that SpaceX is where it is today also thanks to taxpayer money in military contracts and decades of R&D paid for by NASA and given away for free)
.)
They also have contracts with NASA that could be cancelled the same way the lunar gateway was, like in-space refueling. Which is:
- completely unproven
- could affect other parts of their business: if they try it and mess up, the debris field of two Starships breaking up in medium orbit could wipe out significant parts of the starlink constellation (and other satellite operations too)...
NASA had a pretty consistent budget for 30+ years, and even if one contract gets canceled. SpaceX is by far best and most important NASA supplier, whatever NASA does with its budget, SpaceX would likely be involved.
And Starship primary mission is next generation Starlink, not NASA.
> the debris field of two Starships breaking up in medium orbit could wipe out significant parts of the starlink constellation
Do you have any evidence of that?
NASA wouldn't allow operations that could potentially destroy most sats around the world in any plan it signs.
That's silly, SpaceX now is a huge social media and AI company. SpaceX did like 3 billion in involvement in Starlink. The other rocket companies could never do something like that and survive.
> How much do reusable launchers really bring down costs?
Without reusable launch the flight rates they have would not be possilbe so they are the bases for why the business has value.
> Were the companies that elected not to go this way (almost all of them)
Actually literally everybody is getting into re-usability. Maybe check your facts. ULA is working on engine re-usability. RocketLab next rocket is reusable. Europe and China next rockets will be reusable. BlueOrigin of course as well.
> where would Arianespace be today if they had elected to try reusable rockets and ended up at the same point as SpaceX?
It would have failed because Arianespace literally couldn't build a reusable rocket. You can't just magic up a reusable rocket.
If in 2014, when Europe decided to not do the Ariane 5 ME and instead do an Ariane 6 reusable, it would take another 5 years minimum until a reusable rocket would happen.
Ariane 6 took 10 years while being a minor, evolution of Ariane 5 based on Ariane 5 ME project. It involved using a new engine that had been in development for 15 years already and would take 25 years to fly for the first time.
The main engine was only slightly upgraded and could never be reusable.
It would take 15 years at least to have a new engine and rocket developed. And it would have cost 3-5x as much as Ariane 6.
This would not have happened because it was politically impossible, literally totally impossible, Arianespace can't make decisions like that.
Arguably it would have been smarter to do Ariane 5 ME and not do Ariane 6 and instead build a smaller reusable rocket. Basically what they are doing now but 10 years earlier.
> (Note that SpaceX is where it is today also thanks to taxpayer money in military contracts and decades of R&D paid for by NASA and given away for free) .)
That is very reductionist. Many companies get taxpayer money in one way or another. SpaceX from the beginning did lots of private funding and had lots of private costumers. In terms of aerospace they are pretty unique in how much of their own investment they do.
And they actually mostly LOST MONEY on their early government contracts, because they offered them so cheaply. But those government contracts allowed them to lend money and invest. Had they not been able to use that and get many private costumers, they would have gone bust.
As for only because of NASA R&D is true but its just the typical everything is connected argument. Yes because government helped road infrastructure 300 years ago we have SpaceX today, but every other company also had roads and NASA and didn't turn into SpaceX.
RocketPlaneKistler got a better deal from NASA and wanted to build a reusable rocket, yes they are dead and SpaceX is where it is today. ULA had decades of massive subsidies and insane priced launches and have done nothing innovative what so ever.
Elon Musk owns 12.3% of Class A shares and 93.6% of Class B shares. Class B shares have 10x the voting power of class A shares. Overall Elon controls 85.1% of the voting power in the company. If Elon sells any of his Class B shares, they automatically convert into Class A shares.
Retail and institutional investors will have practically no say in the direction of the SpaceX.
> Each share of Class A common stock will entitle its holder to one vote per share. Each share of Class B common stock will entitle its holder to 10 votes per share. Each share of Class B common stock will convert automatically into one share of Class A common stock upon a Transfer.
I guarantee the reason that number is so high is so that SpaceX can offer to merge with Tesla and the end results will be Musk having over 50% control in the combined entity. He's been very clear that's what he's been attempting to do with via his compensation packages at Tesla and now he's found a different way of acheiving the same thing.
The S&P 500 index criteria didn’t allow this sort of nonsense starting in 2017, but they relaxed the rule again to allow dual class listings to be included in the index in 2023.
Not looking forward to SpaceX.AI.Twitter’s eventual inclusion, I do not like founder controlled publicly traded companies.
The 1713 Treaty of Utrecht granted the South Sea Company a monopoly for British trading with the Spanish South America and Pacific.
Exciting! Everybody knew there's enormous wealth in those lands. Spaniards had brought over tons of gold and silver to Europe. The famous El Dorado remained undiscovered.
So it wasn't difficult for the directors and insiders of the South Sea Company to capture the British public's imagination. Even Sir Isaac Newton invested the equivalent of millions of pounds today in the venture.
Turns out the actual monopoly was extremely limited because the Spaniards didn't want to trade with Britain. The bubble burst by 1720 and ruined thousands of people, from aristocrats to small bourgeois tradesmen.
Anyway, surely that has nothing to do with the multitrillions of wealth that await on the Moon and Mars.
Growth companies not paying dividends is normal and they're likely many years out from when they'd need to seriously consider it. I don't think thats a big deal.
Is there any risk to SpaceX that the Musk brand pulls the market cap too far ahead now?
It's not a risk factor I see in the prospectus but seems plausible to me.
Just like with the AI company vesting, I imagine a scenario where a company seeds its own competition by realizing the monetary gains before the work is done. Maybe there's precedent in the dot com bubble. Certainly people were able to sell before the dip a la Cuban and broadcast.com. But I'm thinking more more specifically inducing competitive space ventures.
Who is gonna buy at the IPO and why or why not? (Assumes you read the S1).
I did. I’m not buying. lol I won’t get an allocation but I also want to see where this shakes out. So in 6 months time if starlink is the gem that people say then sure.
I think he finds a way to trade inflated SpaceX stock to o buy Tesla and call it a day.
Was the first to setup a Gigawatt Datacenter, than had to run it empty and rent it out despite having its own AI model which should in theory eat up all of the compute.
Then he was the first to create a Softwareonly company Macrohard, which should rewrite everything from scratch and would just need compute, but nope.
Was the first creating a company drilling tunnels, was the first creating solar roofs...
Hopefully he will be the first on Mars and doesn't come back.
So, a significant amount of self-dealing, and Elon Musk has an 85.1% voting share in the company. That sounds like a really great thing. There is no sarcasm in that previous statement. None at all.
One of the major reasons for fans of space exploration to be concerned about all this was the dilution of control that seemed inherent in an IPO, but since that seems to be fixed, I don't hate the idea any more.
"We believe this capability will also enable creating a petawatt-scale AI constellation through the use of lunar satellite production and a lunar mass driver for launch activities."
Someone read waaaaaay to much Sci-fi
Hey lets build a petawatt scale AI somehwere outside of our planet while people can barely survive day to day in the millions but we need to have petawatt-scale AI for these poor people because the AI will do what?
Seeing both OpenAI and SpaceX trying to yeet themselves into public markets as fast as possible I've got to wonder if the music is slowing. There's a neat rocket company with a satellite business in here somewhere, but it's massively over-shadowed by totally underwater social media site and a failed AI experiment, both of which have been bailed out. I think the best thing you can say is that atleast we aren't aware of any other massively unprofitable bad bets Musk has made that he's going to need to bail out soon.
In some ways this looks like Meta. Meta throws off a tonne of money with it's ad business, but you have to discount it because Zuck has control and an attitude that it's his toy. So you have to discount the ad revenue business because there's a good chance that Zuck just pisses it up the wall. The difference here is you've got a speculative idea that SpaceX might eventually become a massive revenue driver, but Musk is already pissing the money up the wall.
I get why this makes sense for Musk - get SpaceX public, use the stock to merge with Tesla, it gets all his companies under 1 roof and gives him enough voting rights to do whatever the hell he likes. It makes sense for SpaceX early shareholers - they need liquidity.
I do not know what sense it makes for any investor. The absolute best you can argue is it's going to be a meme stock.
Anthropic is paying them 1.25 billion per month to serve Claude in their data centers. That's more revenue than Starlink. In fact that's their largest revenue stream lol.
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