The most simplified breakdown of the SpaceX IPO on the internet

Key Takeaway

SpaceX's business model reveals a powerful entrepreneurial principle: when facing regulatory roadblocks on Earth, build the solution in space instead. Elon transformed impossibly expensive rocket launches into a cost-effective service by making rockets reusable—dropping costs 50-100x. This enabled Starlink (11B revenue, 40% margins), which now serves 10M subscribers. The key insight: take no market risk (if you can build it, people will buy it), then relentlessly solve the engineering challenge. When local regulations make data centers prohibitively difficult to build, the answer isn't to give up—it's to build them in orbit where sun provides free power and space provides free cooling.

Episode Overview

A deep dive into SpaceX's $1.75 trillion IPO, breaking down its multi-business model spanning rocket launches, Starlink internet service, AI infrastructure (XAI), and Twitter/X. The hosts explore how SpaceX dominates space launches (85% market share), built a $11B recurring revenue internet business, and is now attempting to build data centers in space to become the lowest-cost AI compute provider.

Full Transcript

Transcript of The most simplified breakdown of the SpaceX IPO on the internet from My First Million. Auto-generated from episode audio; may contain minor errors.

All right, we are talking SpaceX IPO. The biggest IPO of all time and there's a lot of smart analysis out there. This ain't that. ain't that. ain't that. Sam, what did you call it? The the two guys in a truck version of this. What did you say? Two idiots and an F1. So, this is for, you know, look, there's going to be people who are smarter, wealthier, more technical than us that are explaining SpaceX, but we promise to be the most relatable analysis you're going to get.

Uh, because I wanted to nerd out on this myself. I was like, should I be buying this IPO? Should I be buying this stock? And in order to do that, I was like, okay, let me sit down for a couple hours and just try to understand what even is this business. How does it work? Is this massively overrated? Is it underrated? How should I think about this? What do they even do? And so that's where I spent some time. Sam was picking through the S1 trying to find some of the more interesting, quirky, people aren't talking about this, but check this out styled nugget.

So that's what we're going to try to do in the next hour or so. so. so. I'll just play the character. It's all acting, but what would you say SpaceX does? does? does? Okay, so SpaceX, what do they do? SpaceX builds rockets. Uh I think that's the primary thing that they do. They build rockets ideally rapidly reusable rockets and they could take stuff into space. Now why do you want to take stuff into space? Well, one version of take stuff into space and the origin of the company is let's take man to Mars.

So how do we become multilanetary as a species? That was the you know way way back that was the original mission still you know a part of the mission. And I guess the the origin of that was that they uh you know Elon after he sold I think it was PayPal. After PayPal sold, he made a few hundred million, $200 million or so. And he was interested and excited about when NASA was going to go to Mars. Oh, I wonder where the where the Mars mission is at for NASA.

And he goes on the website, he looks it up, sees nothing about a Mars mission. He's like, wait, we went to the moon in whatever 79. We we have nothing planned to go past that. like he's planning a vacation. He's like, "Uh, hey, so like I have some free time. Let's see if we can like take the kids to Florida and like watch like a rocket take off. How cool would that be?" be?" be?" Exactly. And so he was looking at that. Okay, it's not happening.

So then he thought, "Oh man, you know, going to space, going to the moon." That's a very inspiring thing. What if we funded a mission to take I think it was like a plant, it's like a little succulent or something into into space and it'll, you know, let's take life to Mars. life technically speaking because it's a plant and he thought oh that'll just generate some excitement some buzz it will kickstart more enthusiasm around space and that was the original idea he goes to Russia he tries to buy rockets from the guys in Russia like an old ICBM missile basically and uh they laugh at him they sort of spit in his face he realizes like oh [ __ ] after two trips to Russia this ain't going to work and like any good entrepreneur does take no for an answer an answer an answer Like like any stubborn genius does, he decides, I guess I'll build my own.

He took that personally. Dude, when I was a kid during Fourth of July, like or like for some holiday, we would drive over the river to go to Illinois cuz they sold bottle rockets there and they didn't sell them in Missouri. Elon and I are basically the same thing. same thing. same thing. Just if he is, you know, he's 200 million times richer and 200 IQ points higher, but very similar. But I relate. Yeah. Um, Yeah. Um, Yeah. Um, if you have SpaceX, so do you know their business model?

What do they actually do? When I was reading through the S1, one of my big revelations was they do so much stuff. And frankly, I don't entirely know how it all contributes to the same thing. But I do know that the main reason why he started was that uh reusable rockets is the best way to make going to space happen because you can make things cheaper. So they Yes, that's correct. correct. correct. So they have let's say you know three core components here or I should say four.

So they have launches, they have Starlink, they have X, the artist formerly known as Twitter, and then they have XAI. And those four are the four components of what SpaceX currently does with some new things coming online like they have something called the Terra Fab where he's building like the largest chip factory in the world. U so that's like you know what are the chips going to be used for? Their own rockets, his their own AI. So basically he's got XAI which is his AI company and um Terrafab is basically his way of getting ahead of what he believes is like the chip bottleneck in the world which is there needs to be more chip production ideally in the United States.

So again, if the if the current manufacturers of chips are are already booked out five, six years in advance, already at capacity and the world needs more chips for AI, we'll go ahead and build the largest chip factory in the world, the fab. Sarah and my wife and I, we took a road trip and we stayed at a motel and they only had rooms with two twin beds at the Motel 8. And she was sad. She was like, I want to sleep in the same bed as you.

It's so weird. And so I just got rid of the middle drawer and I pushed the two twiniz beds together and I said, "We don't need a king-size bed. We have a super bed." And that is sort of what Elon has done with this company. You know, it's all these He's just made a super bed. That's just except he kind of put like one of the you know, like um what's the little footrest thing called? That's like Twitter. He's like, "Yeah, it'll just be here at the bottom." because the only downside when you look at the analysis of this thing is that you know Twitter revenue is like half of what it was when he bought it.

So that one hasn't really worked out but he he rolled it together with all this other great stuff so that the investors did well even though that business didn't do so hot uh since then. So he has a super company. Let's hear again super company. The company's going public right now. It's the largest IPO in history. I believe it's going public at $1.75 trillion dollars which is very polarizing because you have on one side people who are rational logical creatures who look at this and say wow so it's 100 times revenue like that's pretty insane uh what are we buying here exactly and on the other side you have the cult of Elon and you have people who are bullish on the future of technology who just believe that like in Elon we trust and it's not about the price to earnings ratios it's not about uh price to sales it's about you know the price to Elon ratio and if [clears throat] it's an Elon company you're going to have 10 times the price you would probably otherwise have in a company and so it's a very interesting company that's going public because it's so huge and you have people who are so passionate on both sides like a sports team or like a religion and I guess the idea here is can we try to understand what's actually going on and and maybe come to our own conclusions conclusions conclusions so just to put this in context.

The word trillion has been thrown around a lot. You know, anthropic is about to go public or something like that. You know, it's worth around a trillion or 900 billion. Same with OpenAI. The word, this word trillion is being thrown around a lot. And I want to put this into context because a trillion is really, really hard to understand. A billion is hard to understand. A million, a lot of people can understand that. So, a [clears throat] million, if it were seconds, a million is 11.5 days.

a h 100 million which is an astronomical number. Let's say if you have $100 million if you have a $100 million company that's a really big company that's 3.2 years if 100 million seconds a a trillion is 32,000 years. years. years. Isn't that incredible? It's hard to fathom how large a trillion is. That's insane. And and when this IPO happens, Elon will be the world's first trillionaire on paper at least. two tr two trillion, right? So that's uh 60,000 years if it were seconds. That's a lot.

That's so that's so large. So okay, so let's explain let's explain a little about the company. So hey, I want to tell you about something pretty cool. We have a database of all of the unsexy business ideas that have been discussed on this podcast. So hundreds of episodes the team at HubSpot went through. They pulled out all the unsexy ideas. So, not the super high-tech ones, but the simple, relatable, interesting, profitable uh ideas that we have brainstormed, and they're all available for download for free. Just click the link in the description below.

Thank you to our friends at HubSpot for sponsoring this podcast and putting together this free resource for you guys. Back to the show. show. show. On the different dimensions that I mentioned, launches, they dominate. They're like the Google search of launching rockets. They launch I think something like 80 to 85% of all the payload that goes into space goes through SpaceX. There might be a second yeah there's a second place technically but the gap is so large and so um they dominate the launch category. Now what do they launch?

They take satellites up into space. They take satellites for the government but they also I think about 40% of their launches are just for their own satellites for this product called Starlink. So if you don't know what Starlink is, Starlink is basically internet service. Specifically, it's really great at giving you internet in places that have shitty internet. So, rural areas, remote areas, countries where the infrastructure gets damaged or blocked during wars. Starlink basically gives you internet anywhere. It's great for airplanes. It's great for boats, anywhere you can have internet that's traditionally quite difficult to get.

And this Starlink business is gang busters. So, it is basically up like, you know, it's quadrupled in the last two years. They have 10 million paying subscribers to Starlink Internet. It makes like 11 billion a year in revenue. It's like 40% Ebida margins. It's recurring revenue. So the Starlink business has like all of the wonderful characteristics of a business. There's no competitors. They have an extreme cost advantage. It's recurring revenue. It's extremely high margin. And it's a product that everybody on Earth, you know, essentially needs is the internet.

Uh and they specifically solve the problem in in rural areas. So Starlink is is very very interesting as like that's the cash cow of this business which is new. It's it's only like four years old I think only like four years old and there's by the way it's some crazy story about how like the Star League team they worked in Seattle and the project was kind of going nowhere. So, he's like getting status updates and he gets really frustrated one day and then he goes like um you ever seen that episode of Entourage where Ari Gold walks into the office with a paint paintball gun and just starts blasting people that he's laying off?

That's basically what they did to the Starlink project. They went there and they just were like, "What the hell is going on?" nuked everybody, restarted from scratch, and then, you know, it now is like one of the the greatest sort of uh businesses in the world right now is just the Starlink business unit inside of inside of SpaceX. of SpaceX. of SpaceX. Okay, so that's that's easy to understand. That's that's pretty straightforward. straightforward. straightforward. That's easy to understand. And then they and and you might think, okay, well, how big is this sort of rural internet thing?

Well, in the US, there's, you know, probably tens of millions of people who who will be subscribers to this. Maybe like another 30, 40, 50 million on top of the 10 million that they already have. But then you have all around the world, you know, there's huge, you know, 50% of the earth basically has shitty internet coverage. So we're talking about like parts of Africa and India, whatever. Now the problem is those people don't have a lot of money. So they're not paying the same kind of thousand bucks a year that people in the US are paying for Starlink.

So there's a question about what that's going to be worth. But then they have this other thing called direct direct to sell. You know about this? No. No. No. Okay. So direct to sell is basically if you've ever been, you know, driving and you're like, "Oh, I just hit a my call dropped. I hit a dead zone." dropped. I hit a dead zone." Yeah, Yeah, Yeah, right. Maybe you're driving on a bridge or maybe you're just like, "Oh, yeah, this one area on my route to work always has like shitty service." Well, they basically can now do um Starlink from the satellite direct to your cell phone.

So, you don't need the little satellite dish like you need for the the home internet service. You don't even need that. It just goes straight to your phone. So, they they partner with T-Mobile, for example. And so, in areas where you have crappy reception, you'll still be able to send text messages. You'll still be able to download some data. You'll still be able to make a phone call. And so they're basically looking at this like whether they launch their own T-Mobile, right? They launch their own Starlink, just that's what you use for your cell phone plan or it's this little add-on to every cell phone plan on Earth where it's like, oh yeah, and for an extra three bucks a month, five bucks a month, 10 bucks a month, like you just have guaranteed coverage everywhere.

When you don't have good service, it falls back to satellite service. And so they're like, "Yeah, that's going to be pretty big." Because there are, you know, the the market for, you know, internet services across cell phones and home internet is like $2 trillion or something. And they actually have and and by the way, there's no differentiation really between any of these. If you go to T-Mobile or AT&T or whatever, they're all Verizon. They're all essentially the same. Which commercial do you like best? Exactly. Exactly.

Exactly. Yeah. It's all the same thing. who like what you know is Patrick Mahomes like your favorite player or you hate him that's going to decide who you go with and so they're the first ones to go into that space with something that's actually a different proposition which is like hey our service works everywhere those don't and secondly um you know it can be lower cost because of the way they're doing it in in uh in space they don't have to do ground buildouts of towers so that's kind of like the the kind of core business they got so good at launching rockets that it became cheaper and cheaper I think they basically brought the cost of taking like a kilogram to space down by 50 or 100x what it was pre-SpaceX.

So they have like a you know if it cost $100 before it now costs$1 or $2, right? As a equivalent of like the biggest how big the cost drop was and they keep doing that. So wherever they are today when they have their new rocket Starship it's going to be half of what it currently is. So they're just like a have a massive cost and volume advantage in launches that lets them have the satellite business which lets them have Starlink. Okay. So that's kind of the the business as it is today.

Then you say, "Well, what's the next unlock?" And if you look at their investor presentation, it's all about data centers in space. And you're like, you know, when you hear this, you think, I don't know what you think. What the hell? You know, you think about like literally a building floating in space. Yeah. It's hard to fathom. I think like we're col colonizing the moon or Mars or something like that. But I also think like is there not enough room here? Like it's it's sort of it's it's unfathomable.

So that that's hard to understand. understand. understand. The answer is we got plenty of room. It's hard. It we're it's a little slow to build and expensive to build and there's some shortages like in turbines and things like that to build, but the real problem is literally just red tape. It is easier to figure out how to launch the heaviest rocket ever and take and build a data center in space than it is to get like, you know, Alama County to approve of a data center in your backyard.

That is literally the problem. That is there is so much regulation and so much anti- uh data center backlash that the people who even have the money and the engineering chops and the power and the the reserved equipment to be able to build, they can't build uh in in the United States, which is kind of insane. insane. insane. Well, what's you know what's really So, think about this. So, uh I'm a history nerd. So, one of the reasons, one of many reasons why the American Revolution happened was when uh American colon colony uh folks, they started taking over what is now America.

They started going further and further out west and they started having a lot of fights with Native Americans. And the colonists were like, "Hey, England, like we need some help. You're supposed we're supposed to like be your country. Come protect us." And England's like, "Dude, it's so far away. It takes us 4 weeks to get there. And plus, once you're there, it's like 3,000 mi long. We can't do this. you guys, I know we said that you can go everywhere else, but please, you got to come back in.

And George Washington was like, "No, this is my land. This is my land. You're not going to tell me what to do with my land. Screw you guys." And that was one of the reasons why there was tension. And it sort of begs the question that when you go the figurative wild west space, when everyone's doing their own thing, what's going to happen in 50 or 100 years when people are like, "Okay, now we actually have to like rein this in. What are we going to do?

Who gets what?" Because and that's actually another thing that's quite challenging to understand. It's sort of like sectioning off the ocean or water or something like that. Like who gets what area of space or Mars or moon? Well, the moon I think definitely right cuz it's actually like a limited land area versus um space which is you know the biggest thing ever. I don't know. I don't know enough about this to know like what's true, but like are there like highway routes that satellites take where it's like you know this is the best this is like the the best route and like you know we we can only have so much like debris in this?

I don't think so. I mean maybe maybe there's some future state where space travel is so cheap and easy that so many people want in and the demand is so high that now we're running out of space in space. Like maybe. But like that's not the problems today. The problems of today are wow, it's really expensive and and uh hard to get permitting to build on on land. So, it's it's such a like I'm going to take my ball and go home or just like the you know, men will do anything to avoid therapy type of conclusion, which conclusion, which conclusion, which go to space.

Well, I guess we'll just go to build it in space then. I I don't even want to talk to it. Like I I I want so little to do with politics that I would glad I'd rather build this in space and figure out I'd deal with the engineering. So, the big risk of this company right now is two two questions. The first is, are they going to be able to build something called Starship? It's like their big ass rocket, bigger, way bigger than the Falcon 9.

And so, I think it carries like seven to 10 times more payload than the Falcon 9. And so, if you know, Falcon 9's bringing up what, let's call it, 10 satellites at a time, this thing will bring up 70 satellites at a time. And so they haven't yet been able to get Starship to work. Uh they're building it. They're testing it. It's taking years. When they do it, it'll be the most impressive rocket and probably the most impressive like feat of engineering in human history. But there's a question of if so, so one some people might not believe that they'll ever get Starship to work.

to work. to work. That's tends to be a foolish bet. Yeah. Betting against Elon's technical ability has proven to be like the most unprofitable bet you could make. even if you're right for a year or two, you're eventually wrong. And so, one question is, is Starship ever going to happen? And can they make it rapidly reusable so that it could fly? Like, he was talking on a podcast and he was talking about it like, "Yeah, we're going to do whatever uh 10,000 launches." And the the guy was like, "So, wait, so that means like you're launching like multiple times a day obviously, right?

Like you're launching 30 launches times a day?" And he's like, "Yes." And they're like, "But you can't even launch one right now." He's like, "Yes." And they're like, "So, it's going to be" And he's like, "It's like an airport. You know how many times a plane takes off a day?" And he's like, "We are going to launch that many times in a day. It'll be like airports. It'll be like, you know, we figured out how to make cars reusable, how to make airplanes reusable. We are going to figure out how to make rockets rapidly reusable.

So, you can land, turn it around, launch it again, land, turn it around, launch it again." Just like an airplane lands, they clean out the the the you know, get your crumbs off the off the seat and then they go and you know 45 minutes later it's up in the air again. And that's like a key part of how air travel became cost effective. They're trying to do the same thing with rockets. And so one bet is is the starship thing ever going to happen? And then if so, there's another set of doubt or risk or uncertainty which is can you even do data centers in space?

Is this even going to work? Uh and there's people who argue that you know one of the reasons you put it in space is not just the red tape. It's the cost. So basically one way of thinking about this that Elon talks about is that the entire game is taking energy from the sun and so turning those like photons basically or electrons into tokens for AI. Like that's kind of like the pipeline. And that's kind of the world uh where the world is going is uh we are going to need an insane amount of AI tokens whether that's for you know chat GPT like things whether that's for digital employees work that's being done whether it's for science and medicine whether it's for robots like we're going to need a [ __ ] ton of AI in the future it's pretty hard to bet against that so then the question is who could be the lowcost provider of tokens and basically if you look at when you have a satellite in space it's powered by the sun you don't need any cooling because uh space has like you know space is basically freezing cold and has like a radiative whatever cooling mechanism where as the chips get hot from being used there's like a a natural physical me mechanism to cool them down.

Some people argue against that, but Elon believes it's no problem. And that basically streaming AI tokens from space is going to be far cheaper and more effective than any land buildout of data centers and then figuring out how to how to transmit those. And the physics the paper the paper papers the question is can they build it? And historically Elon is very good at doing this. He's very good at taking no market risk meaning if I could make this you'd want it right and it's like yes.

Then the only question is, can I make it? And the answer for him has always been yes. And so that's kind of where we're at with this business. This string of letters that we're putting together to make words into sentences is like the words that are coming out of your mouth right now are are wild to me. I just like I'm just like learned German yesterday. Like it's just the fact that language has changed so much that in the last 5 years it has come to the point where we're now saying we're going to go to space to create AI to like imagine explaining this to someone.

I there's this old man that I hang out with in my building who's 96 years old and every time every once in a while I go down to his room and uh he tells me like where he was when JFK died and he'll tell me cool stories. Just imagine like explaining this to him. It's like, well, well, well, it's just crazy how fast humans progress. progress. progress. Your How old is your daughter? She's two. two. two. Yeah. Yeah. Yeah. Okay. So, you haven't quite reached this point, but like my kids are like, how does TV work?

And I'm like, honestly, I have no idea. And you know, they're like, you know, so wait a minute. So, this is happening right now somewhere else. I'm like, yeah, there's a guy with a camera. How does a camera work? Couldn't really tell you. Uh, but he's got something called a camera. Then that sort of gets like piped into like those towers. There's like cables on the road. You see those? There's like satellite and like there's Wi-Fi. That's a tough one too for me. Uh, Bluetooth kind of like Wi-Fi, but something something's different there for sure.

And And And it's showing up on our TV and where's the remote, right? Like I've had an experience by, you know, I've been humbled by my kids so many times trying to just even explain the current [ __ ] that I don't understand. Yeah. Like I wonder if these like analysts who are asking him questions like like like like do they ever just say like yeah it you know what I mean? Like I don't know. There are so many things that uh boggle my mind about you know today's technology.

I'm with you that like this sounds mindboggling but also crazy but also [ __ ] too but also that someone is audacious enough to keep pushing like keep what okay we did that what about this and this what about this and to have that open mind it's these are engineering feats but these are also personality feats just like when Joey Joey Chestnut ate 70 hot dogs at the Coney Island hot dog contest when the previous record was 19 that's what we're dealing with right now and it's just unfathomable unfathomable unfathomable it really is uh it truly truly is so anyways uh Uh, what about Twitter and XAI?

Okay, so that's kind of insane to me. The fact that a rocket company owns Twitter. Twitter. Twitter. Yeah. You know, when you invite someone to your party and then they bring that friend. Yeah. Yeah. Yeah. That's kind of kind of the Twitter problem right now. And I think it was sold for $250 billion to SpaceX. Is that right? So, I did a lot of my thinking with Claude yesterday for this. And I had Claude build me my own my own deck about SpaceX. Here's one of the things about Twitter.

So Twitter's ad business is 40% the size of old Twitter. So X advertising is at 1.8 billion now. It's down 100 million from last year and it's half of what the ad revenue was before he bought it in 2021, 5 years ago. He added subscriptions and payments, whatever. So that's now a billion dollars in ARR. So the total, you know, is 2.8 8 billion and it was 4.5 when he bought it. bought it. bought it. So the X stuff has, you know, has not quite worked.

He did figure out how to spin it, right? So he figured out, hm, okay, the X business is not that great and I can't get the engagement to be as high as, you know, WhatsApp or Instagram or Tik Tok or any of these other apps. But what it does have is data and maybe I can use that data to power Grock. And then he tried Grock. Now Grock is falling behind Anthropic and ChatGpt. So he said but but he again you know I think that one of the great hallmarks of entrepreneurship is basically a failing forward and so maybe in the same way that X sort of failed forward into like oh well it gave Grock some differentiation but then Grock hasn't quite kept up with everything else he used his Grock asset where he's trying to build a chat GPT anthropic competitor even though it's way way behind he built the largest data center for training AI Colossus this and he's really good at building the machine that builds the machine.

So he's he's basically the what he's the best at is building factories at this point. And so you know Tesla has its own factories and and produces you know enormous amount of cars um faster than anyone else designs and builds. Uh he's doing it now with the terra fab. He does it with the rockets. He did it with with data centers here. So he built the largest cluster of GPUs bigger than Google bigger than Facebook bigger than anyone. The problem is he doesn't have enough users.

So he has this like, you know, he bought a huge mansion and doesn't have any friends to come over to entertain. Well, because what does Twitter have? I think you say 500 million. That's shockingly um 500 million is still, this is amazing, a niche social media network. network. network. Yeah. And Grock has 100, you know, 100 million users, whereas Chachip PD has a billion. So 10 times smaller. And so he doesn't have the use of it. So what did he do? He just turned it into Airbnb.

He started renting out Colossus to Anthropic and to Google. And so just in the last I don't know 2 months they announced two deals that I think are combined worth like $20 billion or more. A billion dollars a month. So 12 billion a year to use his data center. And that's Google. Google themselves was the best at building data centers. And they need to to rent from Colossus. And then same thing with Anthropic where Anthropic is paying you know over a billion dollars also a month to rent out.

Now, these are short-term agreements. They can cancel with like 90 days notice. So, who knows? 5 years from now, it might just be a temporary stop gap solution. But again, failing forward, like figuring out like, okay, are we [ __ ] No. What if we did it this way? And then finding a way to survive in advance. Yeah. They basically like they put this S1 out, I think four or six, I forget when, one or two months ago, and I think it was last week or maybe a Monday.

It was almost like a quiet amending of the document that says, "Hey, uh, Google just signed up to spend a million dollars, a billion dollars a month with us to become a customer." And that that that's insane. That's such a huge number. number. number. By the way, I I have to think the the 90D chess move there was that they knew and they staggered the they sort of staggered the announcement. Maybe it was truly uh uh oops, forgot to mention this, but I think uh it would have been smart if they intentionally did that, too.

Yeah, it was cool. Um, do you want to see any of these slides? By the way, can I can I just run you through these? And you just did you have a sit down with your wife and you're like, "Okay, so hear me out." And you showed her like every slide. No, you're that's you. I'm doing that with you right now. I told it to explain it to be like I'm Charlie Mer trying to understand the business. And it's like, okay, Charlie Mer would ask like, "Is it in my circle of competence?

How do I lose money here? Show me the incentives. What's the mo price is price is what you pay? The value is what you get." And so it started to basically break it down. Starlink is the part that makes money. XAI is the part that burns it. And the rockets are the railroads in between. You're not buying SpaceX. You're buying three different companies that are stapled together. You have the space launch business, the connect the internet connectivity business, and the AI business. And then it, you know, here's the high level numbers.

So 18 billion in revenue, losing 2.5 billion uh 6.6 of adjusted IBIDA. I'm going to bring that up in a second. Yeah, I think that's a that's that's whack. They burned 8 billion of cash last year. Uh this is the Starlink business. So it grew from two two two million subscribers to 10 million subscribers. But you can see like it is starting to slow down. So that's like one one cause for concern was that Q you know Q1 this year was was not not high growth and that the average revenue per paying user as they go into like more third world use cases of who needs who needs internet where they have low connectivity obviously they can't charge as much.

They dominate the rocket business. 85% of all launches 80% of all mass to orbit. Let's see. Everything is dependent on Starship which is not a guarantee and that's the big the big question. And then oh they also bought cursor. So they bought cursor for 60 billion or you have an option to buy cursor for 60 billion and cursor I think is at three or four billion in revenue. And so like again trying to play catch-up in the AI game by by merging. You know cursor needed to figure out a way to have compute and you know their own models and a way to survive against codecs and cloud code.

And so like, you know, it's this sort of game theory where where the the the bottom players like in survivor will form an alliance in order to like to to flip the game on its head basically. Let's see if there's anything else here. Oh, he owns 42% of the company. Do you know this? No. No. No. It's amazing. After 20 years, and you would think rockets are like the most capital intensive business that he's had to raise for for him to still own 42%. Just to put that in perspective, like Aaron Levy from Box, which is like cloud, you know, a folder in the cloud.

I think he owned 4% of Box when it went public and he somehow still owns 42% and has 85% of the voting control. Like it's unbelievable. unbelievable. unbelievable. Yeah, some other things about his comp package is pretty crazy. We can go there, but uh anyways, AI says Charlie Munger would put it in the too hard pile. It's a wonderful business at a silly price is the uh AI Charlie Munger conclusion. And um it's a great business. you could admire it from afar. You didn't need to own it was the was the conclusion that he had.

It's just logic doesn't particularly matter. I don't think like I I don't think that you can use like a traditional way of looking at this. An Elon asset is not a normal company. So, it's it's really it's hard. It's hard to price this. It's it's almost like this weird thing where it I always thought it was interesting whenever you're like going through an M&A process, someone will say like I'll you know I'll buy this company for 15 times earnings. And what I like to do is change earnings to the word years.

So it's like I'm going to give you 15 years of payment of payment upfront. And when you look at this, you know, the the the present value of a company is the sum of its future cash flows. When you look at this, you're like, it's hard to I don't even know what it is. Is it a hundred years? Is it hundreds of years? Is it 50? I'm not sure. But however the length of it is at this point, it's so big likely that it's like, will Elon die or not?

I think the crazy thing about this and then then even when somebody Why would somebody pay 15 years ahead is because you're growing and so yeah, it's 15 years at the current rate, but looking at the growth that might only be six, it might only be four. It might your growth rate is dependent on like you're you're making the Elon bet which is can he figure it out? But I'm like, I don't even know if he exists by the time that like this like the the you get the sum of your future cash flows on this one.

one. one. Well, here here's what you'd need to believe. You'd need to believe that the Starling business alone, which is at 11 billion in revenue, is probably going to grow to 30 40 50 billion in revenue um over the next let's call it 5 years. You need to believe that Starship works and that they could take, you know, so they can scale both Starlink as well as the the data center. So, you need to believe that Starship works. You need to believe that data centers in space are going to be a thing.

And um and with that, you'd have to also I I don't think this is as much of a you need to believe as in it's not really a leap of faith. It's more of a realization, which is, you know, Saudi Arabia made trillions of dollars because they owned the oil. They were the the largest and lowest cost producer of oil and energy and the world ran on energy. Well, if you look at the next 20 years, it seems like the world is going to run on compute.

Every single business, every single consumer, every single robot, every single car, every single appliance is going to have a compute need. And so then there's a question of who's the Saudi Arabia of compute? And what you would be thinking with if he goes to if he's the one who could put data centers in space and data centers in space are going to be giving AI tokens at a maybe whether it's 50% or 200% lower cost than groundbased compute for inference then he's Saudi Arabia in space and he's the only one positioned to do that currently.

So they have a um a line item or a section of the S1 that talks about future business lines and he actually says that uh mining asteroids is um and and potentially mining Mars and mining the moon for energy and I um I guess that potentially means some type of oil or something like that and so actually they actually have that co covered as well. well. well. Yeah, of course. naturally mineral mining on the let listen to this. So this is actually a super interesting thing.

So listen to what the company's mission is. The mission is to make life multilanetary and understand the true nature of the universe and extend the light of consciousness to the stars. And then it goes on to say that uh they want to create like a species level redundancy so consciousness isn't tied to one planet and that they don't want humans to have the same fate as dinosaurs. That's what it says at the top. That's the mission of the company. Is that crazy? crazy? crazy? What's the Hampton mission?

Let's just put those side by side, dude. dude. dude. Like, you know, to connect people, but like the the the for 99% of the people, the mission of any business is to take the money in your bank account and to put it into my bank account. Okay. So, it's really challenging for me to compare this to make life multilanetary and make sure that we don't have the same fate as dinosaurs. This just isn't fair. Um, so that's kind of incredible. Also, I've met I've met a few doctors, surgeons that have like kind of a god complex.

And in some ways, it's like, look, if that's what it took to get you to become the best, you know, I actually want my, you know, my heart surgeon or my brain surgeon to have a bit of a god complex, a bit of a savior complex. I don't mind that he's got a bit of a god complex, a bit of a savior complex. It's okay. That's what it takes for just to be like, "Hey, you're already the richest man on earth. You want to sleep on the factory floor?

you want to you want to go ahead and build these and put it all on the line. Again, it takes something that is irrational to make man want to do that and that could be noble or you could read into it like h it's kind of a bit of a insecurity personality defect. personality defect. personality defect. No, that's not how what I'm getting at. I I I I wouldn't say that I'm the huge like Elon fanboy, but I think this mission's awesome. No, I think it's great.

I'm I I think it's fantastic. I'm not mocking it. I think that it's incredible. I think it's inspiring. I think it makes it easier to inspire your employees. There's the famous story of like someone talking to uh the janitor who worked at NASA in 1968, the year before we went to the moon, and they said, "Sir, what do you do here?" He goes, "I'm helping us get to the moon." Like, I think that's awesome. I I think the Wall Street Journal had a an article on the bluecollar workers at SpaceX and how much money that they were going to make on this and they all seem incredibly inspired.

So, no, I'm on board. I think it's awesome. So, look at I don't know if you saw this, but SpaceX IPO is expected to create over 4,000 new millionaires, including some cafeteria workers who compens whose compensation packages included employee stock options. And then this me and the SpaceX lunch lady, she becomes familiar. Dude, that's so crazy. Yeah, I think it's great. Like the amount of wealth that's going to be created. I actually wonder, I don't know enough about uh economics, but like with all these new rich people being created with anthropic, Jad, and uh SpaceX, I wonder what that's going to do just to housing prices.

Obviously, San Francisco is insane. Have you been seeing anything in San Francisco? My sister just sold her house, but it was like pre the IPO chatter. And um she literally she didn't put it on the market. She bumped into a real estate agent, was like, "I have somebody who's looking." The guy walked in, literally, this is not an exaggeration, he walked in for 5 minutes without his wife and made an allcash offer on the house at like what they were going to list it at and um that was it.

It was done. He literally never came back even and bought the house. I've never seen anything like it. It's just crazy. I I wonder what's going to Obviously, the coastal cities are going to like, you know, things are going to change, but I wonder um what it means for the rest of the country. What's this say? So, pour one out for Sam Bankman Freed. He's on the there's a lot of winners out of this IPO. He would be one of the losers out of this IPO because he had an investment in SpaceX that would have been worth $15 billion.

And his overall portfolio, he had Anthropic, which would be worth 80 billion his cuz he was one of the earliest investors in Anthropic. He had Robin Hood, which would be about 5 billion. He had cursor, he was one of the I think he was literally the first investor maybe uh in the first round at least. And that's that would be you know a three billion plus stake. He's got SpaceX 15 billion. Salana 5 billion. and his overall portfolio out of uh you know what he his slush fund that he was inappropriately using illegally using customer funds to go invest it'd be $14 billion today he'd be seen as one of the greatest investors of all time who gets those who gets the shares so they liquidated all these when they did the bankruptcy so nobody won actually uh the people who bought out of the bankruptcy estate uh it's kind of like when Tim Draper bought all that Bitcoin yeah Bitcoin yeah Bitcoin yeah at a low price from the US government when they seized the Silk Road Bitcoin.

Um, you know, it's whoever bought the the bankruptcy um the assets out of uh when they did their liquidation. That's who won. who won. who won. Um that's insane. One one thing that I want to call out and I don't have a good explanation for this, but they talked about in the S1 about having like Okay, so the way it works is you see this you see IBIDA, which is uh earnings before interest, taxes, depreciation, amortization. Then they do this thing called adjusted IBIDA which in my opinion makes no sense.

I guess you there's a lot of reasons as to why they do it but the best way that I could explain it is you know every month my wife and I we sit down and we look at our budget and the we we say how much did we spend last month is that in line with what we predicted whatever and so that can help us predict future expenses and let us know that we're uh keeping to our financial plan. every once in a while or rather in the first six months of us doing this, we kept saying to ourselves, well, we took this vacation, but like but like but like it's a one-off.

It's a one-off. We, you know, we took our parents on vacation. It was to celebrate this thing. And then in month six of doing this, we're like, you know, we just took this other once in a-lifetime vacation. And you know what? I think we just have to like assume that we're going to have these like one-off things, gifts, vacations, buying a car. So, we just got to up the budget and that's what we're going to do. adjusted IBIDA is just like saying, you know, you had this one-time lawsuit or this one time, and I think in the case of SpaceX, it's about depreciation, which doesn't exactly make sense.

They're like, we're going to have this onetime depreciation. I I think that's what it said. Plus earnings before interest and depreciation. I don't understand why you would add that adjust for it. Doesn't make sense to me. Does that seem weird to you? to you? to you? No, I I mean, I think spot on. I think Buffett and Mer famously hated IBIDA as a as a thing. I think they just called it [ __ ] earnings. It's like and our it's like our earnings are this and then our [ __ ] earnings are this and especially in a company that's so capital intensive like I think they had like 20 billion of capex spend in the last 12 months or something like that.

Obviously depreciation is very very real. I think for for uh software companies you know it could be a little bit different but this is not a software company and then the adjustments you're right you know it's like oh except for you know we adjust back in for stockbased compensation. It's like well that's how you pay the people to do the work so why are you keep why do you keep adding that back in? Is that going away anytime soon? Not really. For example, it might be the go public costs.

Sure, that's an adjustment. Uh, but you know, the adjustments tend to be far more favorable than that. I think there was a few other funny things. Do you know they I think they own like $2 billion worth of Bitcoin and I think some of the adjustments was that Bitcoin price has gone down. Did you see that? that? that? That's what I need, dude. I need my adjusted net worth. It's just adjusted for my stupid ass investments. Yeah. And then they uh another funny thing was they did a project where they paid a vendor in shares and the strike price of the shares was like 420.

I think it was like $42.20 $42.20 $42.20 or something like that. And then I think that when they did like a 409A valuation for Twitter, it was like I'm I'm screwing up the exact numbers, but I think if it was 42 billion, they made it like 42 billion like 420. And like if you do like a control F420, it's all it's everywhere. And that's kind of insane. It's the most try-hard part of Elon. I I I despise his 420 uh obsessions. Is there a Hitchhiker's I've never read Hitchhiker's Guide to Galaxy.

Is there like a 420? Is this like a a weed 420 reference or is weed 420 thing? Yeah, it's a Does he guys I'm cool too, right? Um Um Um I think I think it's I think in hitch guide it's like 42. That's the number for the universe, but that's not I think why he's doing 420. Okay. Well, yeah, I wasn't sure, but that's pretty silly. What's this? Shout out to the Ontario's Ontario Canada Teachers Pension Fund, which in 2019 decided, you know what? we're going to slang an investment into SpaceX back before SpaceX was pretty obvious.

And they're going to make 12 billion dollars this year. Um, and in the in the IPO, which, you know, more than funds their pension, it's, you know, $33,000 per teacher that's in the in the fund. Uh, for the 300 something thousand teachers that are that are in the in the pension fund. So, I think that's pretty cool and a great move by the Ontario Fund, which is also hilarious because I'm pretty sure they like boycott Elon. Um, but like Whoops. like Whoops. like Whoops. Yeah, that's pretty hypocritical.

Did you put a appendix on your slideshow with just funny tweets because that would be wonderful. Yeah, this was manual cuz Claude don't have that sense of humor that I have. So, I had to do this work myself. Um, can I tell you a couple other nuggets that I thought were interesting? Yeah. Yeah. Yeah. Did you see who else is on the cap table? table? table? No, not really. So, I'm always interested with these IPOs, like who, you know, I don't know. This episode, this part of the episode is brought to you by pocket watchers.

Um, I want to know who else is getting rich out of this, of course. And um, dude, when I was watching the Knicks game the other day, I kept pausing. I'm like zooming in. I'm like, who's that side? side? side? Who's that person? I'm begging for this courtside app. I just want somebody to take a picture of the entire courtside seats and tell me who everyone is, what they do, and how they made their money. And I'd like that for every single game. The schleier the guy, the more I want to know because I would zoom in.

I'm like, this guy, this guy, this guy, tell me, move your head. Who is that guy? guy? guy? Yeah. It's like, I get why you're famous. You're hot. Who's the guy with the triple chin that's courtside and New Balances? Like how much waste management does he do? do? do? Yeah, that's what I that's all I want to know is who's the schleiest looking person? Not even the New York ones when they're playing in San Antonio or Oklahoma City. I'm just like, "Oh, what is that?" Oh, he you know, he collects all the used chicken wing bones from restaurants all around the country and turns it into bone broth.

Like, ah, that's what this guy does. There's this funny uh video of this like guy who looks exactly like you're describing. I think it I forget exactly where it was, maybe Canada, but Drake's sitting at the game and this guy and Drake are sitting next to each other. He looks like he's 60 years old. He's got a a beer belly and he's just sitting there and he looks like he's like laughing hilariously and uh they put the camera on Drake and everyone's cheering and the guy looks over to Drake and he goes, "Are you famous or something?" And Drake was like, "Yeah, I'm kind of famous." And then like the the the the meme actually found that guy's identity and he's significantly wealthier than Drake and he's like this big shot who no one knows and he owns some type of like boring business and it was pretty funny.

By the way, that's one of the only cool things you can say to a celebrity. Like I've actually played the scenario out in my mind many times of like how do you if you see if you actually see someone really famous like if you avoid it lame no story. You go up to him, you ask for a picture. No way. Just, you know, you walk you walk away with a picture and no dignity. You annoyed them. Like what do you go tell them you're a big fan?

What do what do you actually do? I think you know what you just said which is like are you famous or something is great cuz then they have to be like yeah I'm I'm Drake. I'm a then they just have a blank face like I'm a rapper. They're like okay and they're like and you have to start justifying yourself. Like that would be great. I just I want to do that to Drake. Dude, six months ago, I saw this guy in the street and he was a cool looking dude.

He was young. He looked around my age and he had this beautiful dog with him and I I was out to eat uh like on the street like we were at a sidewalk table and he was just standing there. It looked like he was waiting for his wife or something and I walked over. I'm like, "Man, that's a beautiful dog. I had a dog that looked just like that." And I showed him photos of my dog. I showed him my tattoo and I just learned we I hung out with for 20 minutes.

He's like, "Yeah, I just moved here. I'm still liking New York City. This and that." And I was like, "Cool." And these people were like staring at him and I'm like, "Are you famous? What what what are you doing?" He goes, "Yeah, I just um I I play for the Knicks. My name's Landry." And he told me his last name. What's his last name? Is it What is it? Sham. Sham. Sham. Dude, I totally had the opening. Like his wife came over. My wife was talking to his wife.

It We totally had the opening where I could have like exchanged like exchanged like exchanged like You didn't have noticed he's 65. I No, I didn't. Everyone in New York is like good-looking like and striking looking. I just thought he was a dude. And uh And uh And uh you didn't notice he looks like the original Jesus. Like does he look like Jesus? Jesus? Jesus? I don't know, man. He didn't like, "Oh, it's Jesus. That's why everyone's staring." everyone's staring." everyone's staring." He didn't look like that.

No, in real life. life. life. I'm surprised you didn't tell him like, "Sorry, everyone's staring. I have a podcast." podcast." podcast." Sorry. Do you use Twitter? It's cuz I'm on the mix. No, we I literally sat with him for 20 minutes talking about his dog and like there was totally, by the way, some chemistry going on where we could have like, "You just moved here. I just moved here." You know, we should do what intertwined and you left it that way for a minute. a minute.

a minute. And uh and I I thought he was like a walk-on. I thought he was just like, you know, like the lucky guy. And then I see him last night and I'm like, "Landry, what's good, dog?" I had that moment. My brother-in-law has a great move. He pulls with famous people where if he sees them, he just like he saw Mike Tyson once and we were walking and he just goes up to him and he's Mike, what's up, man? Good to see you. And he just dabs them up and he just says, "Good to see you." Like as if he's seen them before.

And then they're like, "Who's this guy? Seems like he knows me. I must know him." So they just treat him really well and they just drap it up and they move on with their day. And I've seen him do this now four or five times. And I I I have to say this currently like the best move that I've seen anyone do with these people. I use my kids now. I saw Tom Hanks recently at a pizza place and it was just me, my daughter, and him at this pizza place and I was like, I don't really want to like approach him, but like it's kind of the greatest guy ever.

So I let my daughter walk. I saw which way he was walking and I was like, Naomi, walked that way. And she walked and like intercepted it and like intercept it and he was like, "Oh, hey little girl. How are you. And he started talking to her and I was like, "Yeah, got it." And so I heard his voice and it was awesome. So I do that now. Yeah. Use your child as bait. Yeah. Yeah. Yeah. Naturally, um, back to who's who who's famous on this list.

Um, I'm going to read you a name out. Tell me if you even know who this person is. Ant Antonio Gracias. He's like his buddy who like started a hedge fund. hedge fund. hedge fund. Yeah. So the second biggest shareholder of SpaceX is Antonio who's owns about 7% of the company. He's the only one over the 5% threshold as an individual I think think think and it's through you know he has this thing called Valor and basically Antonio he's in Elon's biography a bunch which is is is he had been like I think post business school they started like buying like businesses that did manufacturing but weren't being run well and like a meat packing business or stuff like that.

And so he just got really good at like running and operating businesses that had manufacturing or production facilities. facilities. facilities. And so when Elon needed help with like early days of Tesla or early days of SpaceX, he would just bring Antonio in to like, you know, can you help me figure out the bottlenecks in the production line and the factory and like how we should be doing things differently? And they kind of both like he became his study buddy for ramping up production. And Antonio was always there to help.

He there's a story about how when uh when Tesla was like on the brink, he loaned Elon like I don't know a million dollars or something like that personally, not for any equity, just like uh you need it, here you go. And so he's going to make like $90 billion in this. this. this. Oh my god. Which is incredible. There's also a guy one time when I hosted a HustleCon dinner at your office. There was this guy named Steve who came and back then I knew Steve via my friend Neville.

He owns this thing called or start helped start this thing called Gigafund. Have you heard of Gigafund? Gigafund? Gigafund? It's a it's a fund but started by two guys. Steve who is the I'm acquaintance. We We We Luke is the other guy. Well, Luke is the one of the PayPal founders, I believe, or uh founding team members. And uh Steve and Luke got this thing going. And at the time, I don't know if they described it this as this, but it was pretty much it was called the Gigafund.

And it was just fund Elon and and this is me talking, not them. But they would say like, "We're just going to raise money and invest in Elon." And I believe they are one of the big shots as well. But Steve was actually at your office. I don't know if you knew that. I did not know that because even though you hosted events in my office, I didn't really get the invite all the time to go attend them. Uh, them. Uh, them. Uh, that's not true.

I was working I was working. Um, I want to read you an email. I have open right now a email from somebody who used to be at Founders Fund and Gigafund spun out of Founders Fund. Luke was at Founders Fund and then he left to start Gigafund. So, um, the email basically says, you know, one of the smartest and and bravest things I ever saw someone do was when Luke was at Founders Fund, he just kind of like sat back and realized that the optimal way for him to invest was simply to just back every Elon company and that's it.

Take all the money and put it into the Elon companies. And at the time that seemed like, you know, kind of crazy because Elon was doing pretty crazy companies. And in addition, it also seemed not sophisticated, which I think is the underrated part of this. And actually the part that's more interesting to me. Like if you if you look back like the last 15 years, all you had to do was buy like Google and Facebook and Amazon and just sit on your hands. You didn't need to do anything.

You know, Bitcoin and chill. You didn't need to do anything. like it we all want to do advanced complicated um smart sophisticated sounding things but in reality if you just pick the right you know pick the right horse and in some some cases like what I'm talking about with Google and Facebook and Amazon these were obvious horses these are not like it was not a surprise to anyone in 2010 that those were going to be important companies over the next 15 years and you just had to not do other [ __ ] Um, famously, you know, Bill Gates selling his Microsoft stock.

Bill Gates would be the wealthiest man in the world had he just not sold his Microsoft stock. Chimoth after Facebook, you know, started his own fund and then started doing spaxs and bought the Warriors and he's done this and that and this and that. All he had to do was just hold his Facebook stock from when he was an employee. He would have done better than everything he's done since then. So, we we seek out sophistication. We seek out activity. Uh but but simplicity is actually you know um a more powerful thing if you if you get it right.

And so he was this email basically says like I remember when he said that I remember what everybody was thinking and like a chain email like like he announced that he was leaving and he sent it to like his buddies. No, no. This is somebody who was at Founders Fund just emailing me telling me about this this this and um and so and I it always kind of stuck with me and now when I'm looking at this filing and you see Gigafund and Luke Luke Nosac Oh, they're listed.

So they have a huge stake. stake. stake. They have a huge stake. Got it. I was I was never sure how big it actually got, but I remember Steve through a friend of a friend. Someone was telling me Steve's story and he was like he had this company that was like doing really well, but he kind of quit it to just do this. And I'm like that that's it. just that's all he does. And I I remember the same I had the same emotion. I'm like, but why would he there's got to be more to it.

And obviously obviously obviously he can do that, but you should also do XYZ. It's like, no, actually you should not do XYZ in addition. You should just do the one thing. So I thought that was pretty funny. Uh Steve Jerverson is who I thought you were going to say. Do you know Steve Jervson? Yeah, I do. He started DFJ like a fund. Now he's got his own fund future ventures. I've met him once. really surpris like just a not really nice guy like silly like silly like silly wacky future future a true futurist and if you go I think a fun interesting read is go Google if if you're a true business nerd go google Steve Jervson and go look at his flicker that's right flicker like the old photo sharing website for some reason he he he's like an amateur photographer he loves to like he would go and take pictures of the early rocket launches at SpaceX and [ __ ] like that um and like you know the first Bitcoin mining rig.

He'll go take a picture and he's talking about Bitcoin back in 2012 and he's excited about Bitcoin and he would basically take a photo, post it on Flickr and write like a mini cap a caption that was essentially a blog post about why he's really excited about a certain technology. I've actually learned a lot just by going and reading Steve's Flickr. Um I think it's there's very few true like futurists in the world and he's one of them and he was one of the earliest investors at Tesla, earliest investors at SpaceX, never sold a single share, which is the other remarkable thing is to hold uh through all the the ups.

His his wife Genevieve was my boss at my first job ever. And so I knew Genevie very well. She's cool. Yeah. Yeah. And she uh and I'm friends with her on Facebook. And so like I've seen like this whole thing and like I you know I see all these like cool photos of what they're doing and it's like uh going to rocket launches this and that and it's been really cool to like see behind the scenes a little bit of that and so that's been kind of funny as well.

Yeah. And you know I think there one of the reasons on this podcast I try to be more optimistic and uh benefit of the dowy with I don't know technology and f like yeah a lot of people get things wrong. Yeah a lot of people build dumb stuff. Yeah a lot of stuff doesn't work. That's pretty obvious. And I do that for two reasons. One is I have this phrase which is like pessimists get to be right and optimists get to be rich. If you hang out in Silicon Valley long enough, you realize that pessimism is a losing strategy.

Um when you're around innovation and technology, it pays to be an optimist. That's the first thing. The second thing is um I had a friend recently who uh you know had a family member who was dealing with like health issues and had had that like you know health issues for decades and this kind of like it was resolved like I have to live with this and then on our podcast you know we've talked about that guy from GitLab who like is curing his own cancer using AI and you know that sounds like futuristic but like he actually you know did it.

It's not like a theoretical thing like the you know at least at least one person did it. Um, and so he went back home uh recently and you know on the east coast and was like hey I've been talking to Claude and I got some ideas we could try this and if I get this data I can feed it to here and I could do this and what I told them I was like you know it's not that oh there are different types of people they resist it and we don't.

It's we are in the bubble where you hear about people doing these remarkable things it becomes normalized. It feels possible. It's like the Roger Banister 4-minute mile type of thing. Like once you hear that somebody cured their own cancer with AI, guess what? You're going to approach somebody, you know, a loved one with cancer uh very differently than you would have if you had just not heard that that was possible. And one of the great things about hopefully listening to this podcast, but also just generally being around ambitious, interesting, innovative people is that you get that normalization of what's not normal.

You get to hear you get you you get your frame broken enough where you will in your own situations of life approach it slightly differently. And you know, cuz I think part of this is like, you know, it's just Elon glazing and it's SpaceX glazing, but like another part of it is like, damn, this dude literally called his shot 20 years ago, learn, you know, self-taught, learned how to, you know, build rockets and recruit this team and did what was, you know, pretty much impossible and then today, you know, the biggest tech IPO in history.

you you have to, you know, respect that and also like forget about how good it is for them, but like let it break your frame a little bit so that in your life when opportunities strike or an idea comes, you don't count yourself out. You don't you don't miss that opportunity. You don't you don't ignore what's in front of you and you actually take action. One of my biggest takeaways of living in Silicon Valley for 10 years was to use the word mostly and almost more often than not.

And what I mean by that is I used to say things like that will never happen or that cannot happen or that's impossible. And then I then I started changing this to where I see something that thinks unlikely. I and I I almost always try to say it almost never works but sometimes it does or like you know it it mostly ends this way instead of saying that will fail and it will end this way. I've seen this so many times where I think in my head like uh too black and white of like if a then b you know if someone has this idea it cannot work or this cannot happen and that and you have to train yourself to always think in like um not absolutes but like the the odds are this but those are still like odds that like if enough people try it could work.

Well speaking of the impossible uh one thing I wanted to bring up was the uh his pay package. I didn't know this until I was digging in. So, I thought this is kind of new new learning. Um, so you remember at Tesla when he had that like crazy Elon had that crazy pay package idea and he was like, "Yeah, like if we if we become, you know, the world's most valuable car company by far, if we get to like, you know, 500 billion in value and we're delivering this many cars and we do this and we do this, then I get this like huge pay package.

And if I don't, I get nothing. I've worked." I've worked." I've worked." It's like laughable when they sign it. They're like, "Yeah, dude. Whatever. You do that and then it happens and people freak out over it. Exactly. There's a compilation of people of mocking it, laughing, being like, "This is ridiculous. Never gonna happen." Blah blah blah. So ludicrous, but you know, whatever. And then it happens and he gets the money and then a dude with eight shares sues him in Delaware. Delaware. Delaware. Yeah. Yeah. Yeah.

And says, "No, you know, that wasn't that wasn't he shouldn't that shouldn't have been approved. That's too generous." And it's like, dude, it was seen as impossible before. And he got stripped of the pay package and then blah blah blah. you know, he got ended up getting re revoted in reinstated, but the pliff was like, "Uh, nuh-uh." That that was basically the argument. Yeah, it's insane. Have you seen what his pay package is here? And he has like the same one. Um, okay. So, let me just read this to you.

So, the very first one is called the Mars Award. So, Elon gets 1 billion shares in SpaceX. How much what what what how many points is that? So, it's going public at 135 uh dollars. So, that'd be 135 billion at today's value. But obviously, if he did all this stuff, it would be worth a lot more than today's value. It would be the the total grants uh are like $750 billion. That's his like hypothetical comp. If he hit if he hits all these things, but now listen to what he's going to hit.

Two things are required. One, the market cap has to grow to 7.5 trillion, which would be the most valuable company ever. and two, a permanent self-sustaining colony on Mars of at least 1 million people. Both have to happen for him to get paid. get paid. get paid. That's the Mars award. That's crazy. That's crazy. That's crazy. A million people living on Mars. The other one is the AI CEO award. So, this is 300 million shares. So, a third of that. This is kind of like the uh like the consolation prize.

You know what I mean? like this is like a little ice cream he gets as a treat which is the company goes to 6.5 trillion in value and he's delivering 100 terowatts of compute per year from non-earth data centers. So he does the space data center thing and delivers 100 terowatts of compute per year. Now you might be wondering 100 terowatts I don't really know how to put that perspective. Guess how much. So he's trying to he gets it if he does 100. Guess how much the total kind of current US uh terowatt production is.

I don't even know what a terowatt is. So So we're talking like a unit you said 750. Is that what you said? Uh he wants if if he does 100, he gets the award. So what is that relative to all of us? So he gets money at 100. What's the current US at? I don't know. Take a guess. 50. 50. 50. So that would be like if he doubled the the US total electric grid. That'd be pretty crazy, right? It's currently 1 terowatt. So, we'd have to 100x the entire US grid just to get this award in space.

in space. in space. In from space data centers, yes. From something that doesn't even exist and people don't even believe is possible. So, yeah. So, yeah. So, yeah. Huh. Huh. Huh. Goals. Goals. Goals. Yeah. Set big goals, I guess. It's it's hard. And if he does that, by the way, his base salary on on the way is zero. I mean, he owns obviously a huge percentage of the company anyways, but like this is the additional grant he gets for continuing to work in the company. company.

company. This is crazy, man. You I'm I It goes back to the factor like the biggest risk is that he dies. That's the the biggest risk is that he dies. The biggest risk is that he dies. Like the biggest risk is that he doesn't have like if I'm a shareholder, I'm like you h you must have a dietitian. You must have a sleep coach. Like that's what we're talking here. Or is it like a Jon Jones situation where like the moreness that creates the fighter, you know what I mean?

And if you if you put him on that, you know, sleep at 800 PM schedule, he's not Jon Jones anymore. Jones anymore. Jones anymore. Dude, I talked to um a person who trains professional athletes and he was like, it's so funny. I used to train these baseball players and the ones that were the most eager and did exactly what I said and came to me all the time and said, "Give me more. I want to do this." They almost always were never as good as the guys who were like eating M&M's or doing sk like eating skit eating poorly and like going to bed at late cuz they played video games all night and they just show up and like he was like one guy made like a game-winning uh shot and afterwards I was like so excited I ran up and high five him.

He's like what are you doing man? He's like you did a shot. He's like oh whatever dude who cares and he like kept walking. He's like the guys who cared you know treat them mean keep them keen. the guys who cared the least amount and like tried not exactly tried but like put brain space on like the effort were the best and that maybe that's what's happening here. You know, the the the weirder that things are the better that he's going to perform. Yeah. Which is which is but I mean how crazy is it that when we hear this stuff it's like uh like can he make Starship work?

Can you make a orbital data center work? It's like we think the higher risk is just that he dies. It's like in the probabilities game we're like I don't know. the bigger risk seems like that it just it's you've learned so many times in a row that it's it's not wise to bet against. So I I don't think that like I'm a dumb idiot and I we should preface this before this episode. Don't listen to anything. But the one thing that is true is that he's a challenging person to bet against.

And so all these science fictiony things I I I I think that he's bad at timelines, but I think he's good at doing it eventually. Mhm. Mhm. Mhm. Um, okay. Well, the Glaze Fest is over. So, So, So, if you hated Elon, we're sorry. This wasn't the episode for you. If you hate Elon, um, hate to break it to you. Maybe the thumbnail should have given that away, but if you made it all the way here and you hate watched this whole thing, I'm sorry. It's like, you know, you know the percentage of the population that they taste um, what is it like the thing?

Cilantro. Cilantro. Cilantro. Cilantro. It tastes like bleach to them, like genetically. Um, this might have been the cilantro for some people, and I'm sorry if it was. All right, that's it. That's the pie.