An oversubscribed IPO and an opening day that saw the already healthy share price rocket by almost 30 per cent proves that the market remained hugely confident of Elon Musk’s business. SpaceX now has a value of some $2.1 trillion (€1.8tn).

But rocket launches and Starlink broadband might not be enough to propel the business to the – as described by one banker with tongue firmly in cheek – “heroic” ambitions that the IPO forecast.

In reality, and while rockets and Starlink might continue to do very well, the real prospects for SpaceX might be in the ‘jam tomorrow’ divisions of AI and Grok, orbital data and Chipsets, and even battery production.

There are relationships between all the business divisions, and the largest ‘unknown’ is undoubtedly those revolving on SpaceX’s chipset plans. Musk has announced a chip factory 10 times the size of Tesla’s current Gigafactory. The goal is to produce enough AI computing to equal twice the entire electricity consumption of the United States.

This fantastic and breathtaking Terafab plan sees a spectacular output. As one observer commented: “The entire global AI chip industry right now is on track to hit around 100 gigawatts per year of computing. Every Nvidia GPU, every Google TPU, every chip from every company on earth combined equals some 100 gigawatts.”

“Musk wants one factory to produce a terawatt per year. A terawatt is 1,000 gigawatts. Ten times the output of the entire global industry. From a single building,” says the comment, adding: “To launch meaningful AI compute into space, you need a billion chips per year running at a kilowatt each. That is not a number the current industry can produce. The Terafab is the only way to get there.”

Musk’s plan is to create a gigawatt of space AI computing annualized by the end of next year. Then 10x per year from there. 10 gigawatts by year two. 100 gigawatts by year three. A terawatt beyond that. Most people think orbital data centres are a decade away. Musk, speaking last week, said SpaceX will build the factory to make this possible by next year. Then the orbital data centres will start to kick in.

Some commentators have suggested that this single dream of Musk is unachievable hype, and – in truth – who knows? But Musk has a solid record in achieving initially unbelievable results. Rockets that can be reused more than 35 times. Starlink broadband that can revolutionise satellite communications and deliver impressive connectivity to aircraft. Starship, which might take mankind to Mars and will dramatically reduce the cost of delivering a kilo to orbit. Taking passengers from – say – New York to London in 30 minutes might be a far-off dream, but who knows? Tourist hotel pods on the Moon: Who knows? Asteroid mining: Who knows? A robot in every home: Who knows? 1 million data centres in orbit: Who knows?

SpaceX, if its enthusiastic shareholders are to be believed, will deliver. Time, of course, will tell.

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Categories: Blogs, Business, Inside Satellite, IPO

Tags: IPO, spacex, starlink