Space Exploration Technologies, better known simply as SpaceX, became a publicly traded company on Friday nearly a quarter of a century after it was founded.
The company began trading on the Nasdaq exchange in New York City at $135 a share, valuing SpaceX at nearly $1.8 trillion. By the end of the trading day the company’s shares were selling at $160.95, a respectable increase of more than 19 percent.
On paper, SpaceX founder Elon Musk became the world’s first trillionaire, with his personal stake in the company valued at more than $700 billion. Because of the company’s stock options plan, thousands of current and former employees became overnight millionaires. Employees at SpaceX have worked remarkably hard over the last 24 years, and now they will be richly compensated for having done so.
SpaceX now stands as one of a handful of the most valuable companies in the world. Should it be? There is broad disagreement about whether SpaceX is fool’s gold with its sky-high valuation, or represents a valuable opportunity to finally own a piece of a dominant space company that could some day command the business of data centers in orbit.
SpaceX is now largely an AI company
One thing is clear: SpaceX is now subject to significant public disclosures, and it will conduct much more of its business in the public eye. Although Musk retains complete autonomy in terms of ownership and voting rights, he will now be beholden to shareholders in a very important way: the price of his company’s stock.
Most shareholders bought SpaceX stock today not to be part of a the company’s long-term plans to settle Mars, or to help NASA land humans on the Moon. Certainly, some space enthusiasts did. However, most people invest in stocks to make money.
As SpaceX made clear in its S-1 document filed in May, however, the company’s value does not lie in its “space-enabled solutions” or its Starlink internet constellation. As part of its “total addressable market,” the company views these as comprising less than 7 percent of its value.
Rather, Musk and SpaceX see the majority of its value in providing AI services, mostly from space, and primarily for enterprise applications. If investors agree that’s where the vast majority of the company’s profit lies, it is where they will want to see SpaceX put its time and resources.
So as of today, SpaceX is owned by investors who largely want to see it make money; to reach its enormous valuation, it must make that money through orbital data centers. This is a sobering thought for NASA, which was the company’s most important backer during its early years when bankruptcy was never too far away.
Even a decade ago, a majority of the value of SpaceX’s contracts were coming from NASA and other US government entities. Since then, however, revenues from Starlink have begun to significantly outstrip NASA’s contracts, and this will likely become even more true in the future.
How much of a priority is Artemis?
NASA relies on SpaceX for so much right now: flying its astronauts and most important science payloads into space, and playing an important part in the Artemis campaign. But the $2.9 billion contract NASA signed with SpaceX in 2021 to build a Human Landing System for the Moon program is now regularly dwarfed by the AI compute contracts SpaceX is signing with companies like Anthropic and Google, which are worth tens of billions of dollars.
For SpaceX, the money (at least in the near term) is in AI—it is not in NASA government contracts. Yet NASA is desperate for SpaceX to begin delivering on critical milestones for the Artemis Program in the coming months and develop the capacity to land humans on the Moon.
Key to all of the work for NASA is the massive Starship rocket, and how SpaceX will prioritize its further development. The large rocket appears to be close to reaching operational status, with the ability to put about 100 metric tons into low-Earth orbit. Assuming that happens in the coming months, how will SpaceX use its Starship launches? Will it spend its energies on preparing and launching a critical refueling demonstration in orbit, which will require back-to-back Starship launches? Will it fill up a lander prototype next year, which will mean a dozen or more tanker flights simply to enable an uncrewed lunar landing test for NASA?
Or will the company focus on putting profit-making Starlink satellites into orbit, followed by critical tests of data center satellites? In short, will it follow the money?
It’s a valid question, because investors will be watching closely.
