business I didn't invest in the SpaceX IPO and even if I wanted to, couldn't easily do so since they blocked Hong Kong residents. It seems like Elon timed and priced it perfectly for the company.
The thing is, it's not a very good business at anything near its current valuation...and the market seems to be starting to agree. The price has been dumping since the IPO.
Here's why I think it isn't a very good business:
- Going to the moon and mars is going to be loss making for decades if not generations.
- Starlink, while pretty cool, isn't close to an iPhone-size of business and there's lots of competition coming online.
- The AI business isn't competitive with the US frontier labs or the leading Chinese lab and even if it was, there's so much competition and switching costs are almost zero, it's unclear if the business would be profitable.
- Re AI data centers in space: The limit on earth-bound data centers on a global scale seems to be the ability to make gpus and memory, not space, cooling or energy. The US might have data center construction or power issues, but many other countries don't have this problem and inference doesn't need to be done on shore.
- The launch business has the biggest moat, but I suspect that will disappear within the decade as multiple US and Chinese competitors progress.
Perhaps X money will be the golden goose?
All of this said, I have no doubt though that none of this will have any impact on Elon and his success in any or all of these endeavors. He'll figure out how to make the price go up when he needs to to raise the money to achieve his goals.
source & further reading
larrysalibra.com — original article
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