Elon's Shock Update + INSANE SpaceX Terafab, NVIDIA Theory

Kind: captions Language: en I think there's a lot of motivation for Elon to drive revenues faster than anybody could imagine. And that is to get the valuation of SpaceX up high enough to buy Tesla so that he's got unquestionable control. Right now they're on par with each other. He needs to get the valuation up to like 3 trillion and then merge in Tesla. >> He's got 12 million subscribers. That's doubled year-over-year. So if you extrapolate this out, he's pretty close to being at a 24 million subscriber run rate. The Starlink business alone could be a trillion dollar market cap within 2 years, within 18 months, let's say. I think you can make you can make the bull case on Starlink alone and then the rest of it is like, hey, is Elon going to do well with investing the excess capital that's spitting off of Starlink? How's Elon going to do with that money? Well, I don't know who else I'd give it to. Elon's got a core advantage if this is what this world comes down to. You play this out to it logical conclusion and the bandwidth available to the Starlink network goes up 10x or eventually 100x times. Elon mentioned something about potentially the the Starlink network could eventually handle roughly half of internet traffic. So I mean this this thing could get so much bigger than just 12 million subscribers to your point Freeberg. >> Surprise surprise. SpaceX is talk of the town on the podcast this week. Let's see what the boys on the moonshot pod have to say and then we'll move on to the all-in podcast. I want to share some of the top takeaways from the call. So first off, SpaceX expects to hit a h 100red billion in annual recurring revenue by the end of this year. And uh Elon set a target for a trillion by 2030, maybe by 2029. He moved up that target from 2031 to 2030, a trillion dollars of annual revenue. Uh SpaceX posted 7.8 billion in revenue this quarter. Uh 92% year-over-year increase. uh he beat [clears throat] the streets expectations. The company has inked 6.7 billion in cloud service deals in the second half of this year. Uh SpaceX plans to hit 2 gawatt of compute by the end of 2026 and up to 10 gawatt by the end of 2027. And their near-term cash engine Starlink is outperforming. They have 12 million subscribers. That's 2x year-over-year. Uh the revenues grew 66% to 4.3 billion. I love this. Gwen Shotwell uh also implied that Starlink's direct satellite to mobile was going to take a big chunk of the $600 billion mobile telefan TAM. You know, I can't wait to be any place on the planet in the Gobi Desert or in the foothills of Hollywood here and have a great cell phone signal. >> Oh, yeah. >> Uh yeah, it's amazing. >> Just for context, remember, no company in world history has ever reached a trillion dollars of revenue. >> That is important context. This was not an ultra- long-term goal. They're talking about 2030. I'm recording this in 2026. The most insane part about this is not the trillion dollars in revenue expectation that has now been moved forward from 2031, where SpaceX was previously expecting to hit this mark to 2030. The most insane part of this is that this trillion of revenue in 2030 is actually reasonable. There is a clear viable path to get there. Just about everybody's reflexive reaction to this number was to automatically dismiss it as absurd, pie in the sky, far too optimistic, ultraaggressive, ridiculous. It's not. Now, if they pull it off, it will be ridiculous because it's never been done before. And to go from where they are today, the rate of growth at that scale is just absurd. Yet, as I said, as audacious as it seems, there is a clear, reasonable, viable path to getting there. That's the crazy part. No miracles are required. No major breakthroughs are required. Consistent incremental progress on their current trajectory will get them roughly there in roughly that time frame. I'll talk more about how later, assuming these guys don't already bring it up, but I just really want to underscore this point. This is a very achievable outcome. No miracles required. That's insane. just just to >> if anybody can you know I was on I was on the news show saying this is the first 10 trillion dollar market after we start talking about the terapab I think it's the first hundred trillion dollar uh company out there um let's listen to two quick clips from Elon and then uh discuss them uh cuz a lot was said and actually a lot more was said after the earnings call a lot of news breaking out all right first one >> as Brett mentioned we are expecting to reach 100 billion uh plus ARR uh in December of this year. Um and it's it's probably also worth mentioning that our internal projections for reaching a trillion dollars in revenue, not ARR, but revenue um have moved up from 2031 to 2030. So, prior to the IPO, uh you financial projections we had were reaching a trillion dollars in in revenue uh in 2031. We now expect that to be in in 2030. Um and uh there's a non-zero chance of that being in 2029. Uh and then he posted uh where he said these that got posted as clips. Let's take a listen. I I find this really funny and and fascinating. >> Actually, rocket science is literally our daily business. Um and uh you know, rocket science is a idiomatic expression for extreme uh technological difficulty and and there's a reason for it because the the thing let me tell you what what rockets desperately want to do every flight. They desperately want to blow themselves into tiny pieces. Um and uh then the engineering struggle is to u convince the rocket not to blow itself into tiny pieces and actually deliver payload to orbit. [snorts] So uh he was making those comments about how uh how hard the hard things they're able to do and building the data centers and building orbital compute is nothing compared to building those rockets. Um gentlemen, uh >> isn't it incredibly cute that Elon doesn't know the definition of internal projection? This is a public earnings call, dude. [laughter] Oh, it's He's just so awesomely transparent, isn't he? Just just incredible. >> So, on top of that, okay, go ahead, Alex. I want to go on. >> Okay, for my nth hot take of this episode, um I I I think this is not financial advice. I think the internal now external prediction is credible and I think there are two possible pathways. >> Okay, this is [ __ ] amazing. As I said earlier, it is credible. It is viable. No miracles are required. We're about to hear now Alex's impression of how this comes to pass. By the way, let me ask Grock inside my current 20 year SpaceX and 20 year Tesla valuation model. Please explain in plain English without being super autistic and referencing any specific numbers if our model has a credible path to SpaceX reaching $1 trillion in annual revenue in 2030 plus or minus 2 years. Got to give a little bit of wiggle room. Right now, keep in mind the model has four different scenarios. Two of them bare cases, one mild and one absolute [ __ ] [ __ ] stom. So, they're not going to get there. What about the base in the bullc case? Do we actually have a credible path with no miracles required in the model? I'll add, I mean, I know the answer to this, but if so, what are the two primary drivers of this revenue number? Anyone want to guess what they are? Don't worry, I'll spoil it. A little bit of Starink and a [ __ ] ton of AI compute. Boom. Prompt. While Grock's working away, I'll actually put the thinking on screen now so you guys can see the whole process. These are so sick, by the way. Like, if you're not using the Grock plugin inside Excel, you are missing out. Oh, Grock currently answering now. Here's Grock's response after digging through,490 cells across dozens of sheets. Quote, short answer, yes, the model has a credible path, not a sure thing. In base, it gets there in the early to mid 2030s, a bit past the strict 2030 plus or minus one year center, but inside a loose reading of that window. Bull hits it comfortably inside that window. Barecase delays or miss on that timeline. The two primary drivers surprise the [ __ ] prize. One, AI compute. Two, Starlink. So bottom line there, in my opinion, and not based on my feelings, but based on my literal valuation model, I do have a credible path. SpaceX reaching roughly $1 trillion a year in revenue by roughly 2030 predominantly almost entirely actually on the back of AI compute. And we're not talking orbital AI comput this is terrestrial compute plus a minor contribution for Starink. Not to say Starlink is an insane business but relative to the scale of the AI comput leasing business in my model Starink is a distant second place in terms of its contribution toward that roughly $1 trillion revenue goal. If you want to take a peek at my 20-year Tesla and SpaceX valuation model, you can do so by joining Patreon at the investor level and above. Just check out the link below. By the way, I just got to take a moment to appreciate how meta this entire moment is. We've just looked at my 20-year Tesla and SpaceX valuation model which was co-authored by Grock Build, a Space Xi product. We then used a Space XAI plugin, Grock Inside Excel, to do some quick references about that $1 trillion target. And many people currently watching this video are doing so on X, a platform owned by Space XAI. What the [ __ ] dude? So, back to the Moonshots podcast where I believe we were about to hear a potential credible path to a trillion dollars in revenue by 2030. But this was the point I was trying to make earlier. It's not absurd. I mean, if they pull it off, it'll be absurd. But the path there is it's it is credible. That's the thing that's so crazy. They could do this. And maybe they're a year or two late. Big [ __ ] deal. And currently, I think 99.9% of investors out there think this now public revenue projection is incredible, as in not credible, as in no [ __ ] way, bro. He's just talking [ __ ] There's no way this happens. >> $2 trillion in revenue by the end of the decade. Path one is the SpaceX Tesla merger that we like to talk about via Optimus. So, Optimus basically takes over the the service, labor, physical labor economy on Earth and in the solar system. That's one pathway to a trillion. Second pathway to a trillion answers my qu the question that I had flagged a few episodes ago and didn't have the answer to, which is why isn't Nvidia, which is so busy commoditizing the layer above them, also commoditizing the layer below them. And I I think uh the the answer uh that I heard from from this group at the time is, oh well, like his Nvidia's relationship with TSMC is too chummy. Oh, they'd never do it. They're too dependent on TSMC. I think the power move here for path number two for SpaceX to a trillion dollars is SpaceX replaces TSMC with the Terapab. TSMC has almost hundred billion a year in revenue. If you could imagine a future where Terapab is basically TSMC times 10 or 20, it's American domestic. If you roll up the values of micron and skinex and tsmc etc. So memory plus compute plus fabus fab and then 10x it you easily get to a tr a trillion plus. I think the power move here is Elon and Jensen get into bed together and Elon becomes the new American TSMC in deep deep partnership with Nvidia, giving Jensen the leverage he needed against TSMC and giving Elon the path to a trillion. Now that is a hot take. I think I paused at the perfect time here too. I think Peter's just trying to process that now. This was not the hot take I was expecting. I thought bro was going to say AI computer and Starling dumb [ __ ] But this is a fascinating perspective. Now Jensen is a smart person, a great businessman. Elon is smart also a great businessman. The terab project is going to happen and I think at some point surely this is a publicly stated goal terab to produce more chips than the rest of the world combined by quite a margin. Surely Nvidia would prefer not to be in a situation where they currently have their balls in a vice grip due to the potential risk of production being concentrated on a very small tiny pocket of the planet in case something were to go wrong over there. They'd be kind of screwed. So, there's certainly some possibility that Nvidia and the Terrafab project in one way or another become quite intimate. Let's see what Peter has to say on this. Man, that really wasn't what I was expecting for the $1 trillion revenue part. To be fair, I would be more than shocked if the Terafab project itself did most of the heavy lifting toward a trillion dollars in revenue by 2030. I mean, that would be just be shockingly fast progress. Long-term, sure, it's going to be monstrous, but that was not what I expected to hear. >> And I think we already seeing that, right? SpaceX had already announced a exclusive partnership with with Nvidia. You know, I was on the something I didn't say on the on CNBC. Uh I think there's a lot of motivation for Elon to drive revenues faster than anybody could imagine. And that is to get the valuation of SpaceX up high enough to buy Tesla so that he's got unquestionable control. Right now they're on par with each other. He needs to get the valuation up to like 3 trillion and then merge in Tesla. >> Wow. The hot takes keep coming. The Tesla SpaceX merger talk is not going away. I have a lot more thoughts on this. They'll be coming in future videos. But I will add one thing right now that's very important. The more Tesla investors attempt to value SpaceX, the more Tesla investors will be strongly in favor in principle of a merger with SpaceX as compet. In other words, the number of Tesla investors who would in theory in principle support a merger will trend higher over time as some of them make an effort to actually model out SpaceX. Regarding Peter's suggestion of SpaceX getting to roughly 3 trillion, then gobbling up Tesla. It's funny you mentioned that ratio. I'm going to ask Grock something again back to the model. So, let's ask Grock. Hey, Grock. In the base case, if we combined our estimated fair value for SpaceX and Tesla in 2026, and that's based on the next 20 years discounted back to today, what percent of that fair value would Tesla represent? And what would SpaceX represent? Don't use the dollar amounts, only the percent value. We can see Grock thinking away at the moment, digging through the entire model. Hm, that's interesting, isn't it? SpaceX represents roughly 66%. Tesla 34%. So now we'll ask Rock, if Tesla remains at its actual real world current market cap and SpaceX grows to 3 trillion in market cap and then you add both those together for combined market cap, what percent would SpaceX represent at 3 trillion and Tesla at its current market cap? This could be interesting. What do you [ __ ] know? SpaceX 70%, Tesla 30%. Versus my current 2026 standalone fair value estimates of SpaceX 66%, Tesla 34%. The bottom line is that my model currently suggests that SpaceX is currently worth roughly double Tesla. And Peter just threw out a number there that might also imply SpaceX being worth roughly double Tesla in the event of a potential merger. Now, key caveat there is that assumes Tesla doesn't grow at all. Obviously, that's possible, but interesting. Let's check out a couple of clips from the Allin podcast. >> Brad to the SpaceX IPO. I know you've been tracking this and commented on it. >> I mean, listen, I think that one first, let's start off. $1.4 $4 trillion of value creation for this company is extraordinary. So the fact that from peak to trough it's down 40 or 50% from the IPO. We had that chart out a few weeks ago. Remember that within 6 months of the IPO almost all these tech stocks are down 50% peak to trough. We see it again here with SpaceX. I thought it was a really solid quarter. I thought his guides were pretty extraordinary. 100 billion in ARR by the end of the year and he pulled forward the $1 trillion target in ARR by a year from 2031 to 2030. Now did >> I think Brad may have misspoke or maybe just misinterpreted but that wasn't an ARR target for 2030. That was revenue. So they weren't talking about reaching an annualized revenue rate of a trillion I guess basically by December that year but actually bringing in $1 trillion of revenue in the full year for 2030 which is far more extraordinary. Just put that in perspective. Morgan Stanley's 2030 revenue estimate is 325 billion, which is also extraordinary. Remember, this company did 18 billion in revenue last year. So whether you're taking Morgan Stanley's numbers or Elon's numbers, clearly the market is not pricing that in. At 2 trillion, we were pricing ahead a couple years. I think now it's, you know, the the value reflects kind of where we are. The market has questions about a few things. Here's what they are. Number one on the rental business, the rental of compute business. He rented out a huge block of compute to Anthropic. It's the question that we've been talking about here. Are you going to use the compute to build your own frontier model or are you going to rent it out? And if you rent it out, are you going to be able to find those people who have the capital to offtake that compute? He's talking enormous numbers, 10 to 20 gigs. And people are wondering how they're going to be able to finance that. And remember those businesses, the GPU rental businesses tend to trade at very low multiples. Look at coreweave etc. On the frontier model business, I think this is the sleeper. I think he said on the call that Grock tripled tokens in the month of July. I believe what we heard was Grock build 4.5 resulted in an immediate tripling in token usage. It did go live in July. So checks out which is extraordinary. And the reason is cuz Grock 4.5 is the best value for money in terms of cost per intelligence by far. It's a great grunt worker AI. >> That doesn't include cursor. Cursor was already on a path to go from 3 billion to 10 billion by the end of the year. Cursor plus Grock could be at 10 to 20 billion by the end of the year. That would be an extraordinarily valuable asset going to trade at a much higher multiple than the data center business. And then of course we haven't even talked about Starlink and what he's going to do uh you know I think going to run the table on mobile. So this is the normal consolidation. We have funds like uh across Silicon Valley that are distributing their shares. The stock has traded down a bit. Nothing surprising to me here. Now it's all about execution. And I think the most important thing to watch, the two most important things to watch are number one, how do the Grock and Cursor revenues end the year >> and number two, um, you know, the traction they get on, um, you know, continuing to replace traditional mobile carriers with Starling. >> Some good points from Brad. I definitely think the AI models, Grock, Cursor, the biggest unknown unknown and the potential there is near infinite on the upside. My model currently intentionally sort of underestimates and lowballs there because it's really hard to know for sure. I'd never bet against Musk and the team, but competition is so cutthroat and their strategy appears to be build all the AI compute, monetize the [ __ ] out of it, and then also keep a little bit for their own models if necessary, compete in that space, but winning that is not necessary or fundamental to the thesis. On Starink, everyone definitely sleeping on direct to sell. I believe it won't be too long before the number of subscribers Starlink is adding per month inverts from almost entirely broadband subscribers, not talking about enterprise, to the majority being sell service. Lower average revenue per user compared to the home broadband, but many many more users create downward pressure if you are amongst the people who want to cash out and been in it for a long time. But I'm holding these for my grandkids. Saxs, your take on these spectacular, I guess is the only way to describe them, results coming from a vertical that wasn't part of SpaceX's business, but 9 months ago. >> Yeah, look, I thought it was a very bullish earnings call. I was a little bit surprised that the stock went down after the earnings call because not only was it a beaten raise, but also I think Elon spoke to a lot of their plans. The only thing I would add to to what Brad said was around Starship. Elon basically said, we all saw it, right? That the Starship test flight was successful. The Starship's floating in the ocean. The heat shield worked. That's going to enable more flights of Starship now at a more accelerated rate. That paves the way for the V3 satellite, which enables much more bandwidth for the Starlink network, which then powers the whole direct to cell play. So, you had that piece of it. I mean, just the whole telecom aspect seemed very on track and they're very bullish about that. And then you've got the whole AI data center play. Now on the data centers, I think what they said is that they expect it to go from 1.4 gawatts of compute to about two by the end of the year. And Elon said that the spot price for computes in the $30 to $50 per watt range. So you know, you do the math, a gigawatt is a billion watt. So $30 to $50 per watt means 30 to 50 billion per gigawatt. And I think they're at the high end of that range right now. So when Elon says, "Look, we're going to end the year at 100 billion of ARR." All you have to believe is that they're at 2 gawatt of compute running for $50 a watt to hit that. That doesn't include Starlink or the launch business or the Grock cursor piece or any of these things. So I think that's why they're >> multiple ways to win is what you're saying, Zach. There's multiple ways to win with the stock. >> I think Starlink's just an unbelievable juggernaut cash machine. If you look at the financials, their segment reports, space, connectivity and AI. And on the connectivity side, the Starlink side, it they generated $2.6 billion in adjusted EBA. You can kind of approximate that to be kind of operating cash flow. Space was kind of, you know, negative200 million. So call it break even and AI was plus 1.1 billion. But AI, to Brad's point, it's unclear whether the pricing they're getting on compute rental today is temporary and at a premium because of the lack of compute available in the market today and people that need comput are paying Elon a premium for that comput. So I think there's a question mark where that goes. But the connectivity piece on Starlink, 4.3 billion in the quarter and 2.6 billion in adjusted Ebaton. He's got 12 million subscribers. That's doubled year-over-year. Yeah, it's worth letting that sink in. Starling doubled users in 1 year. So from about 6 to 12 million monthly subscribers. We also saw that enterprise revenue, Starling Enterprise, so not for consumers but for business is fast approaching half of all Starink revenues and they expect that to meaningfully shoot beyond that and comprise the majority of Starink revenues in the future. The last thing I just want to add on Starlink direct to cell for people that aren't super technical, one Starlink satellite can serve many times more cell customers than it can home broadband customers cuz the amount of bandwidth required for cell phones, mostly voice, a little bit of internet is [ __ ] all compared to home broadband where people are typically streaming 4K video, downloading blah blah blah blah blah. So even if the amount of Star Link launches remains consistent at its current rate as they begin offering a sell service to more customers globally, those same number of Starling satellites being launched at that same consistent cadence could result in explosive growth in total Starlink subscribers. Of course, don't expect the cell subscribers to be paying anywhere near as much as a home broadband customer, but do expect total Starlink users to rocket toward and then exceed 100 million customers much sooner than anyone expects with the majority of that mix skewing towards sell service. So, don't sleep on Starlink direct to sell. It's a huge opportunity that most people aren't paying much attention to. $66 RPO per month what people are paying per month and he grew 20% quarter over quarter. So if you extrapolate this out, he's pretty close to being at a 24 million subscriber run rate on this multiple and assuming this enterprise stuff which is like airlines and other things scale which they seem to be scaling with the consumer business. Starlink alone could be generating on the order of $40 billion of revenue topline with a huge amount of that flowing to free cash. That could be a $30 billion free cash flow within the year. That alone provides the cash flow to fund much of what what Elon's doing. And if you just put a 30x multiple on that, which I think you can because these subscription businesses are very high renewal rate, very low CAC, I think you could probably get a 30x just on the Starlink business. The Starlink business alone could be a trillion dollar market cap within 2 years, within 18 months, let's say. That I think funds all of the rest of this as kind of science projects and upside. So, I'm kind of making a bull case. It's crazy to me how well the Starlink business performs and you can see it in AT&T and Verizon, Huenet, Viaat. I mean, these companies have been decimated. Well, guess what? Elon Musk saw this very clip appear on X and replied regarding the $1 trillion valuation for Starink. Far more than that, as I've said publicly, bandwidth demand will increase massively due to AI and robotics. Their need for data transfer is orders of magnitude more than humans. By the way, that was orders plural. So, we're talking 100x or more. So, the way to think about the opportunity that Starlink is going after isn't the size of today's total global bandwidth, but orders of magnitude beyond that. Like a lot of people underestimate the long-term potential of Starlink by looking at today's global connectivity total bandwidth and thinking, oh well maybe Starlink captures a portion of that as opposed to how much bandwidth will be needed in the future and what is Starink share of that new much larger literally orders of magnitude larger pie. He adds some interesting context. Even if the communications market merely doubles in size, I would expect Starink to reach at least 25% market share outside of China, maybe one day in China, too, which would be over half a trillion in revenue per year. He adds, "It's not out of the question that Starlink carries more than $50% of internet traffic long-term, which would probably be over $1 trillion a year. There is no obvious impediment to that outcome so far. This is clearly not an off-the-cuff reply from Musk. He's obviously thought in great detail about the opportunity here. The increasing need for orders of magnitude more bandwidth on the back of AI and robotics and what that could mean for Starling growth, market share, and revenue. One question investors should ask themselves, actually think through this in great detail, is how the flying [ __ ] would any other company on or off Earth even attempt to compete with Starlink? Step one, you need to replicate SpaceX's launch business. Good luck. No one else has done it. They're 10 years ahead or more. So, that's out of the question. What's your other option? Well, you could just use them to launch. One problem. They have literally millions of satellites they need to launch for their own projects. Starlink plus Star Mind. So get in line, [ __ ] The third problem here is that if you do use Star Ship to launch your future next generation communications network, you're not only competing against SpaceX for launch capacity cuz they're launching their own stuff at much greater scale, but even if you can get some allocation of some Starship launches in the future to launch your competing network. SpaceX is not a charity, they're going to make money on the launch business, meaning you are at a competitive disadvantage just based on costs. So how do you compete with Starink? answer. You don't. Let's get back to the all-in pod. >> Kind of making a bull case. It's crazy to me how well the Starlink business performs and you can see it in AT&T and Verizon, Hugheset, Viaat. I mean, these companies have been decimated. I used to have a Huenet satellite dish on my Sonoma County ranch in order to get internet. That's what we had to use. It was like, you know, 200 bucks a month or something. Terrible. Those terrible service orbit, right? And they take forever to >> terrible service. And that market got decimated by Starlink. And if he launches the handset thing, that subscriber growth is going to go. Right now, he's adding 2 million subscribers on the consumer side a quarter. You could see that going to 4 to 5 million a quarter. You could actually see an acceleration in >> 400 million mobile sub 400 million mobile subs just in the United States. >> They're right over the target here. As I said earlier, actual number of Starlink users added per month will increase explosively as the mix shifts more from almost exclusively home broadband customers to many more direct to sell customers. This is obvious. >> I think you can make you can make the bold case on Starlink alone and then the rest of it is like, hey, is Elon going to do well with investing the excess capital that's spitting off of Starlink? How's Elon going to do with that money? Well, I don't know who else I'd give it to to like, you know, do what he's doing with Starship and with AI compute and the terra fab. >> Oh my god, this is a science fiction. Uh, >> you want to talk about county Texas how the US gets off of this dependency with Taiwan and China from semiconductors. If Elon takes this on his shoulders and he delivers what he's showing as a vision here today, this is going to be the greatest semiconductor fabrication site on planet Earth. Well, you know, I I would say something. You know, David, to your point, you know how many CEOs or founders would just take that Starlink business, which is such an exceptional business, trillion dollar business going to two trillion, and they would not take any of these other risks. They would not do terapab. They would not try to build out the data center. They would not try to build their own model. That's highly risky, but highly important investments that are being made. I mean, it is heroic and important that we have this level of I just think unbridled enthusiasm for innovation uh on the frontier that Elon's doing. And I wish we saw more CEOs, more public companies willing to take this level of risk. We just got done talking about, you know, some CEOs maybe that were taking less risk because the safe bet was was easier to make. Elon refuses just to take the safe bet. He's taking all the dollars from this thing where he has an extraordinary business and plowing them back into these things that are critically important to the United States. And by the way, Brad, such a good point because if you look at other CEOs and other management teams, they're getting in on this. They're starting to realize that buying back your shares, giving dividends is not as important as betting on the future. >> I've said in the past many times, if the best use a company can find for their excess cash is to buy back stock or pay dividends, it's a massive [ __ ] skill issue. and also a severe lack of testicles >> because they're investing too much in capex. Obviously, Google got smacked with their capex spend. So, that keeps happening over and over again. And just on the headwinds that SpaceX is going to face, the arguments that I think will turn out to be wrong, but they're valid to talk about here are, hey, is this demand for tokens and compute going to keep up? Or does onrem and desktops and open source models getting smaller, better, does that actually mute at some point demand? I don't think it does. I don't know there's an upper uh I don't know there's an upper bound for on demand intelligence. The second one obviously is Starlink is for people who are in a rural neighborhood. If you've got Verizon fiber to your building or Spectrum, you're not putting nor can you put a Starlink on your building. So the piece there that's going to be um uh explained probably in the next year or two is every single Tesla sold is going to have Starlink in it. when they get that merger done, what that means is you're going to have Wi-Fi networks uh connecting any phone to any Tesla, say all those robo taxis out there, you'll be able to connect also directly with the next generation of Starlink. So, your phone will be able to direct if it's got clear line of sight, it's going to be able to connect to any Tesla on the road, which there are many that all future ones will have a Starlink built into them. So, those are super promising. And then finally, you know, there's been a lot of speculation about the valuation. Brad, you brought it up. I think at liquidity when people were asking you and I heard you talk about it, hey, private companies, venture capital, we are a voting mechanism and then when it goes public, it becomes a weighing mechanism. And sometimes you'll have this moment in time uh where there's hand ringing about those valuations and the hand ringing peaked in the last quarter. You had 160 times uh price to sales ratio for Tesla when it first came out. 160 times, right? you take their this two or three trillion market cap and you put it against a smaller revenue number. Well, if you look at the revenue number increasing, now we're down to a 45 times price to sales ratio. So, some kind of uh balance is occurring here. Yeah, Brad, between these private and public markets as well as the increase in revenue. Yeah, I I I mean, honestly, I think this is all super healthy. I think the SpaceX IPO was extraordinary. I think the consolidation here is perfectly predictable. And now you have a company at 1.4 4 trillion that I think if you take a three or a fouryear view, you can see yourself tripling your money in this business at a very reasonable valuation on the Morgan Stanley numbers or on the Elon numbers or whatever, but that's always been the bet. Do you believe that Elon is the greatest innovator and a great allocator of capital? Some good fair valid points from Brad. I'll just add something. He was talking about, you know, if you look out just a few years into the future, what happens if you look out 10 or wait for it 20 years like I'm currently doing for SpaceX? The further out into the future I look, the more extraordinary having an opportunity to build my SpaceX position around the $1.5 trillion mark appears. I >> I mean, man, Elon's got a core advantage of this is what this world comes down to. >> He says something like that on the call where he said, "Look, putting up data centers is nothing compared to the difficulty of putting up a rocket, right? It's like, you know, creating data centers is not rocket science." So they take some of those hardware expertise that they have from SpaceX and they put them into data centers and that's why they've been able to stand up, you know, more data centers or or bigger data centers faster than all the competitors. A couple points there. I is it clear why Starship is so important to Starlink? Okay, let me just explain this quickly. So basically SpaceX has developed a new V3 satellite that has 10x the bandwidth of its V2 satellite. So currently the Starlink network is powered by V2 satellites. They deploy them on the Falcon 9 rocket and they launch about 27 satellites per launch and that adds about 2.6 terabs per second of total network capacity. Starship deploys 60 of these V3 satellites per launch. That would add 60 terabs per second of total network capacity per launch. So over 20 times more capacity per launch. That's the power of it. So if they get Starship working, by the way, the last test, not only did it prove that the heat shield worked, my understanding is they actually launched or rather they deployed 20 V3 satellites as a test and they were able to make connection with those satellites and prove that it worked. >> That is correct. And the next Starship test flight will also include V3 Starlink satellites. this time, not just to do a quick communications test, but actually to be placed in service. I repeat, the next Starship test flight will be the first to deploy into the constellation active V3 satellites. >> They had cameras on them. The reason we were able to see the Starship was because they're like, "YOLO, let's put some cameras, HD cameras on them." >> Right now, I think those satellites basically it was just a test and they burn up. >> They they burned up. So I think the next big milestone here will be when they launch Starship with let's say 60 of these V3 satellites, put them in the correct orbit, make connection with them, add the bandwidth to the network. That's going to be a big milestone. You play this out to its logical conclusion and the bandwidth available to the Starlink network goes up 10x or eventually 100x times and that's when they can do all the interesting things like direct to cellular. There were some interesting hints that Gwyn Shawwell talked about about with ground stations about what they could potentially do there and I think >> and they might buy T-Mobile or something like that sack. So it's easily within their range of purchases >> and and I think Elon mentioned something about potentially the the Starlink network could eventually handle roughly half of internet traffic. So I mean this this thing could get so much bigger than just 12 million subscribers to your point Freeberg. Isn't it amazing that people are now genuinely wrapping their minds around the idea of SpaceX reaching a trillion dollars of revenue somewhere around 2030, Starlink inevitably growing to serve hundreds of millions of customers and that the path to actually doing this is credible. I know a lot of Tesla investors watch my content and I have to say guys, if you haven't taken the time to model out SpaceX, you're [ __ ] up big time. Don't forget, if you guys want to see my 20-year Tesla and SpaceX valuation model, you can find it on Patreon. Check out the link below or head to patreon.com/solvingthemoney problem. Might help you understand why I've been loading up on SpaceX building my position as aggressively as possible and won't stop talking about the company. I'm still extremely bullish on Tesla. I mean, look at the model. I got a 20 Tesla model too. But relative to the short, medium, and long-term potential I see for SpaceX, bro, it's no contest. Thanks for watching. If you appreciate the content and want to support the channel, check out the links below where you can get early access to daily videos, unlock hundreds of exclusive pieces of content, and plenty more. AG1 has been part of my daily health protocol for almost half a decade. It's packed full of vitamins and minerals and helps me fill in nutritional gaps while supporting energy, digestion, and immune function. It also has prebiotics and probiotics to promote gut health. I take my health very seriously, and so should you. 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