[rayiner]

If SpaceX succeeds, the gains will go to the same people who will bear the losses if it doesn’t. Both the gains and losses are privatized.

The consumer/ad tech bias of HN is really showing. The app I use to share photos of my kids with my elderly relatives is worth $1.45 trillion, but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? I’ve been in HN for 16 years and heard so much breathless cheerleading for web apps “changing the world” but now we have companies that really might change the world and it’s a scam?

[wasabi991011]

> but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much?

The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships. HN news comments have a similar bias against the sky-high valuations of OpenAI and Anthropic.

[rayiner]

> The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships

That’s not how TAM works. The valuation of each business unit isn’t just a simple proportion of its TAM like that. In the SpaceX/xAI merger, which was just a few months ago, the rocket company was valued at $1 trillion and the AI company at $250 billion: https://www.reuters.com/legal/government/how-math-works-175-...

EDIT: To elaborate: TAM is not a valuation for a specific business. It’s a ceiling in the size of the market the business targets. AI has an astronomical TAM because you can sell AI into almost every market. E.g. shipping and logistics is a $10 trillion business. You could sell AI into that market and capture some of that revenue. But if one business has a $10 trillion TAM and another is $5 trillion, that doesn’t mean the valuation of the first business is double the second one.

[jcranmer]

SpaceX's S-1 listed its expected TAM and did break it out by segment. $26.5 trillion to AI, $1.6 trillion to connectivity (Starlink), $0.370 trillion to space launch. https://www.sec.gov/Archives/edgar/data/1181412/000162828026...

[aftbit]

$26.5 trillion dollars. That's more than $3,000/yr from every single man woman and child on the planet. Another way to put it - more than 10x as much as all of the US spends on food every year. For Grok/xAI. That's bonkers.

[tim333]

It's not for Grok/xAI. It's an estimate for the total market for AI at some future time. As one datapoint:

>Morgan Stanley projects a $25 trillion market for AI-powered robots alone by 2050,

It's about 10x current AI spend.

[sensanaty]

The difference being, of course, that the photo app actually earns a profit, whereas the "EVs, robots and rocket ships" and ESPECIALLY the AI so far do not, and most likely will not any time soon.

[ekianjo]

Valuation is based on future prospects. Investing 101.

[danny_codes]

I'm not sure I understand. The cynical analysis is that SpaceX insiders are dumping on retail at a high valuation. They know the valuation is ridiculous, but are relying on "dumb" retail (think wallstreetbeets level of gambling) and "forced" retail (your 401k) to create artificial demand so the valuation doesn't collapse until the insiders have sold.

The cynical part (that they know the valuation is ridiculous) is supported by the structure of the IPO. A 4% float with a, what, 30% retail component is unheard of. NASDAQ QQQ admission rule-change is also unheard of. If SpaceX insiders actually thought their company was worth $2T or whatever, why make this highly suspicious changes?

This is irrespective of whether or not SpaceX will eventually be worth more. It definitely could be. But when you look at this IPO, you can't help but catch a smell that something fishy is going on.

[drawnwren]

But if SpaceX does anything _other than become the most valuable company in history by delivering at least two technologies predicated on the largest stock rise in history based on a single technology (LLMs)_, the gains from zero to now will have been privatized and the losses will be born by the public. Which is what everyone is thinking about.

[saagarjha]

There are a lot more consumers in the world willing to use the photo app than entities that do rocket launches. This isn't to say that it is changing the world more, it's just that it makes more money. That's how capitalism is set up right now.

[asdff]

There is no moat around what they are doing really and they have competitors in all these sectors. All it takes is another administration to come in with a brain and a spine to not just hand contract blindly to Elon.

[nradov]

Which competitors? Blue Origin and Amazon are trying but they're way behind on space launch capability, and still using SpaceX to launch a lot of their TeraWave and Kuiper satellites. Arianespace and ULA seem to have given up and aren't even trying to compete.

[grosswait]

Who do you think the viable alternatives are? Be realistic.

[WalterBright]

Blindly? SpaceX launches cost only 10% of what NASA was previously spending.

[rayiner]

Not to mention it had to pay Russia $4 billion for seats on Soyez flights to ferry astronauts to the ISS.

[satvikpendem]

No moat lol, hardware has much more of a moat than all these SaaS companies

[loandbehold]

"No moat" are you serious? It took SpaceX 20 years to develop reusable rocket launch tech they have and everyone else who is working on it is decade behind. Falcon Heavy per kg cost to LEO is 25 times lower than what SLS can provide. Freaking 25 times!