Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%.

What Musk Controls:

- CEO removal = his consent. You can't fire him even if he destroys the company

- Take business for himself. SpaceX gets a rocket deal? Musk can say "I'll do it at Tesla instead"

- 85% voting forever. No expiration, no time limit, permanent control

- Board elections. You have no power to elect directors you trust

> In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones. We surmise that the company, having invested tens of billions to find this out, would cut bait on the project sometime around 2028, the way management walked away from plans to build multiple small-car factories at Tesla.

SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch).

50 kW per ton x $400K per ton = $8,000 per kW = $8 million per megawatt in launch costs.

That means a 100 megawatt orbital data center will cost $800 million to launch.

You need about 833 satellites for 100 megawatts, so let's round up to 1,000 satellites. Let's say one of these satellites cost $3 million (that's probably high, but let's go with that for now). That's about $3 billion for satellite manufacturing.

Bottom line: It will cost SpaceX $4 billion to launch a 100 megawatt data center.

Anthropic is paying SpaceX roughly $50 million per megawatt per year. SpaceX could sell access to its data center for $5 billion per year. Assuming the satellites last for 4 years, that's $20 billion in revenue from $4 billion in costs.

Please correct my math/assumptions, but this rough calculation shows that SpaceX could be right and Morningstar could be wrong.

Well... yeah, sure, everyone thinks that.

And the fact that it doesn't matter and won't impact demand for shares illustrates how increasingly and dangerously untethered the stock market is from reality.

I don’t think I have ever seen this before.

Who is this product for? How the hell did "data centres in space" make it into the prospectus at all?

More to the point, why is Morningstar being so generous with their interpretation of that line of business? It's plainly insane, and you don't need an advanced degree in physics to understand why.

1. Space operations: $370 billion;

2. Connectivitiy: $1.6 trillion, roughly split between mobile and broadband; and

3. AI: $26.5 trillion, which includes $22.4T in AI Enterprise applications, $2.4T in AI infrastructure, $760B in subscriptions (ie Grok) and $600B in digital advertising.

So immediately we see the limits of the space market. SpaceX did 170 launches in 2025. At $100M each, that's $17 billion in revenue and Falcon 9 launches just don't cost that much. That brings Starship into the picture but that program is arleady at $15 billion spent without a single dollar in revenue. So we know from the outset that only the other markets can really justify the STarship prgoram because you have to remember that STarship has to compete with Falcon 9. Or, even worse for SpaceX, a Falcon 9 competitor.

Now, as for Starlink, this one is interesting. Starlink has a big advantage when you need mobile broadband (eg planes, boats) as there's nothing really equivalent, Yes, there's 5G and that's fine in populated areas on, say, RVs and such. But the receivers are expensive.

I think Starlink is going to have a hard time competing with 5G, mainly because 5G already exists and Starlink handhelds are predicated on STarship being able to launch sufficient low-altitude V3 Starlink satellites, which themselves have a more limited life because they are lower altitude. And you're still going to have to deal with per-country licensing, marketing, regulations, etc.

I wonder how much of this is predicated on military applications.

But let's get to AI as that's the most hand-wavy (IMHO) of all this.

First, digital advertising. Well, when Elon bought Twitter it had $4.5B in ad revenuie. Now it's $1.8B. I also think Twitter is fundamentally limited so that's just not going anywhere. Twitter just isn't 10x'ing it's audience (IMHO).

Subscriptions? I think this is a dead market. For everyone. Why? There'll be a race to the bottom, hardware will get cheaper, eventually AI agents will be run locally (even on phones, eventually) and it's just not the cash show OpenAI, SpaceX or Anthropic think it is.

Let's also dispense with orbital AI data centers. It's a completely dumb idea. it's going nowhere. Don't believe anyone hyping it up. It makes zero sense and it will never amount to anything.

SpaceX seems unable to monetize their AI investments thus far. How do I know this? Because you don't lease DC space and GPUs to Google if you have a better use for them. So it not only looks like you're falling behind but you also need the cash. Also, this is dependent on getting enough GPUs. Published details about the Google deal seems to allow Google to cancel or revise the deal if SpaceX is unable to deliver so there is a huge risk here.

What none of these companies (SpaceX, Anthropic, OpenAI) seem to be addressing is what happens when future generations of hardware come out? What happens when running models locally becomes more and more viable? What if there is no expensive hardware moat? What happens when AI models get commoditized? I personally believe this last one will happen and China will make sure it happens.

So all in all there are a ton of risks here. I am skeptical about the long-term prospects of OpenAI in particular and Anthropic less so but I think xAI's (ie Grok's) future is way more uncertain.

I'm actually most confident in Google's future here because they haven't bet the company's future on AI not imploding.

SpaceX has been the only game in town for quite a while now, to such an extent that the intelligence agencies of foreign governments have no alternative but to launch with SpaceX. They now do more orbital launches than the entire rest of the world combined. If they really are worth less than Microsoft, then it seems space just doesn’t matter that much, because SpaceX is space for all practical purposes.

I may agree with their overall sentiment, but I think this sort of formulation is just silly nonsense from analysts who build models instead of companies.

...from the pages of Duh Magazine

Technologically, will they work? Shovel enough money at the problem and there's no reason they shouldn't. Rack up some GPUs in a shipping container, attach a couple of solar panels to the outside, zip-tie a Starlink to the door. Except for the little problem of heat. Space isn't cold, it's more of a giant Thermos bottle, and they gotta park in full sunlight, which is famously the only thing supplying the heat that keeps the entire planet alive. Good luck to them with their radiator setup.

But economically? There's no chance. Too expensive to get into space, too many auxiliary systems required, no maintenance is possible, and, given the lead time of prepping payloads for launch versus the rate of new developments in AI hardware, likely badly behind the times if not outright obsolete on the day of liftoff.

There is no shortage of land despite what some in the media would have you believe. Those same solar panels work at ground level. DCs don't have to be water guzzlers or grid destabilizers. They'd be better off by every metric solving terrestrial problems for the same money.

Of course they won't work. It's ludicrous that we have to even entertain the thought of otherwise.

"Disconnected from historical valuation norms" is a more sensible statement.

The idea that the stock market is "detached from reality" is dangerous too because the stock market is...reality. People make and lose real money in it every day.

There are good arguments that the historical valuation norms are reasonable and deviation from them is "dangerous" but there's no actual law that says the stock market needs to behave according to history.

While I personally think the current behavior has significant risk, I also can't dismiss that the role the stock market plays today is different. It's not just about raising capital, providing liquidity, price discovery, risk management and building wealth, for large numbers of laypeople it's also the go-to casino (entertainment) and a platform for expression (way to express dissatisfaction with corporations, politicians, the world, etc.).

Part of the reason for this demand is the fact that index tracking funds like QQQ will be forced to buy up massive volumes of shares. Not only that but other non index tracking funds that track large cap stocks will also have to buy. Vanguard large cap for example manages trillions of dollars. That in itself will have 100s of billions worth of buy orders.

As far as I can tell, that’s exactly how it works. Reality is investor emotions. If it shouldn’t be that, I mean the whole system needs a rework.

1. The recent Iran drone attacks on AWS data centers

2. Growing anti-AI and anti data center sentiment at home, plus Larry Fink (ceo of Blackrock) in a recent interview being terrified of dissident groups using consumer drones to attack data centers.

3. Anthropic, Grok, and other AI vendors becoming more and more integrated into defense and military, plus increasingly reliance on AI for other national surveillance systems

Data centers are and will be targets, both for national military attacks as well as home grown dissident attacks, so they are proposing to move some of the critical workloads to somewhere that the only group that can attack the data center hosting the workload is a nation state with space launch capabilities. That significantly reduces the number of actors that can attack the data center. And if the US wants to they can probably bomb all the other space rocket launch facilities worldwide in less than 24 hours, leaving extremely limited capability to attack a space hosted DC.

Is it insane? Probably, but the US has done insane things with military budget before, and will continue to do so for a long time. If you are Elon, its a great time to milk that US defense budget for some more R&D, and even if the main project doesn't work out, he's still going to be able to keep some innovations within the company and apply them to Starlink and other more realistic endeavors.

1. Using one part of Musk's holdings to trick people into feeling optimistic about how it will do incest with another part.

2. Megalomania dreams of becoming the Tessier-Ashpools from Neuromancer with their private fiefdom.

Right now, 70% of the country is at least skeptical of DCs and at worst absolutely hate them. NIMBY is basically the rallying cry. That's why you go "up" (if they can make starship work). The physics is "hard" but doable, you can keep them cool enough in a sun synchronous orbit. The math pencils out. It's not my field, but back of the envelope math seems to work. Scott Manley has a video on it if you're skeptical.

But, people keep thinking about this like "return on investment" is the only thing driving this play. They're literally the only company with a mostly reusable system (unless you count that company trying in China?). They're the closest company to a fully reusable launch vehicle. They have a ton of government contracts with star shield. After Bezos' rocket blew up last week, there's basically nobody close to competing with starlink...

I am not a Musk fanboy, but, like, there is literally no other serious space competitor right now. I mean, "maybe" Boeing? But not really - they're years away...

So, like if you read about the Memphis Datacenter - Colossus I think? They're unable to get power, they're pulling in power from Mississippi to keep the thing running. You know how many times they have to ask permission for that? The infrastructure costs there just to power it start to get absurd too. Then the unending line of approvals and environmental impact studies and permits. For all the people saying, "it'd be cheaper on earth" it might be in terms of dollars, but if you can basically iterate entirely unfettered in space, it's the obvious choice if you can make it happen.

Like, seriously, go try to build something, there are a LOT of rules outside of rural areas. It's literally why my wife and I decided to build our cabin where we are building, because there were basically no restrictions. Meanwhile in town, my buddy's deck was a nightmare to permit... it was a deck, not bridge. Seriously, to all the people saying, "it's easier" go try to get something built in a big city or where you have to fight through permit hell.

These tech oligarch guys view this (I think rightly - it's one of the only things I view them as right on) as a race to AGI against the Chinese. We're in the lead right now, cool, but the Chinese have excess kilowatts and we don't. In fact, we don't have adequate power plant infrastructure at all and we couldn't get the power plants built if we wanted to (the Ezra Klein and Derek Thompson book Abundance touches on this topic if you're curious as to why). It's not going to happen.

But up? No NIMBYs in space (yet). So they're going to go where nobody will tell them "no." At least, that's what I would do if I owned a literal rocket company.

People are all looking at this stuff through the lens of "money" as if that matters hardly at all after AGI, lol. The analysts are looking at this like it's 1995. I mean, PE ratios are important, don't get me wrong, but after 2016, and Trump, and the applications of transformers, and the war in Ukraine (and current shit show in Iran), and the rising price of fuel, and, well I'll stop, the list goes on and on, but acting like the "normal" rules of investment apply is just silly. This stuff is about power, and he who controls access to orbit is worth a basically unlimited amount of money...

Do I wish it was happening differently? Yup. But hey, we decided to give up on space as a country like 50 years ago, maybe we can try to do cool stuff in space now.

That’s why we are seeing pushes for regulatory capture, safety fear mongering, large government contracts, and even potentially the government taking stakes in these companies. It’s a sprint to cash out before they get commoditized.

[0]: which obviously provide some revenue, but much less than the value provided.