Transcription
Ahead of its historic IPO coming June 12th, SpaceX has been signing massive deals left, right, and center. Today, we'll share with you four of them.
First, the US Space Force announced that it has awarded SpaceX a big $2.29 billion contract to build a new space data network backbone. This is the next generation military satellite communications network in low Earth orbit, also known as Starshield. This is a separate network from Starlink.
Second, after NASA announced its plan to build a permanent $20 billion US base on the moon, they confirmed that SpaceX Starship rocket will play a big role in these moon-based missions. We'll review the plans for phase 1, phase 2, and their hope for phase three, a sustained human presence by 2032 and beyond.
Third, StarCloud, an aerospace and AI infrastructure startup building data centers in space, announced a partnership with SpaceX to integrate 50 Starlink mini laser terminals across 25 satellites.
Fourth, American Airlines has agreed to install Starlink Wi-Fi on more than 500 airplanes starting next year. That makes it 38 airlines now that have partnered to use Starlink to more than 6,300 commercial aircraft. Delta is the one remaining major holdup.
And finally, while Europe announced plans to protect their mobile carriers by reducing the share of mobile satellite spectrum US operators can acquire, it still leaves the door open for SpaceX and Amazon's LEO to bid for them. There seems to be more up SpaceX's sleeve before the IPO.
Larry Goldberg is a serial entrepreneur and has been an active venture capital investor for the last decade. Check out lumicenti.com. Welcome, Larry.
>> Thank you. Great to be here.
Herbert, >> lots to ask you about SpaceX. Uh they seem to be signing deals. More maybe more to come, but this is, you know, two weeks before the actual IPO or 3 weeks before the IPO. Uh we're going to go through the major deals. This one sounds like it's a pretty big one. Space Force announced it has awarded SpaceX a big $2.29 billion contract. They're going to build this space data network uh Star Shield, right? So, it's nextG military satellite communications network. It's going to provide high-speed global data transport layer for the US military connecting sensors, weapon systems, satellites, aircraft, drones, missile defense systems worldwide. Very very clear that this is not Starlink. SpaceX also operates a separate government focused division called Star Shield which uses a different satellite network than Starlink. So that's what this is. Uh according to the Space Force, the network will provide low latency global communications, optical inter satellite links, high-capacity tactical data transport, a resilient mesh satellite constellation, worldwide military broadband connectivity, and this will be by the end of 2027. Sounds like this is something that every government needs to have, but it's good that uh the US government has access or has partnership with Starlink to be to make this happen. Thoughts on this, Larry?
>> Well, it's going to be awfully difficult for any government to get to the state that Star Shield is going to get to or that this network is going to get to, the backbone network is going to get to because Starlink just dominates the sky at the moment. uh they have the infrastructure, they have the satellites and more importantly they have the launch capacity so they can get what the government needs as fast as they need it to where they need it. Um and there isn't a competitor there isn't a competitor who achieve it not the Russians not the Chinese I mean the the rate at which they can launch and the quantities that they can launch and ultimately you know when when Starship begins launching the the volume that they can launch at um just is staggering and way above anything else that anybody else has got. So, it was a given that, you know, SpaceX was going to win this as they're going to win many, many, many more. Um, you know, we haven't even begun to see Starship being offered, but once it's offered, I mean, it it's game over. I mean, it's just game over.
>> 2.3 billion seems kind of low. That's cheap for the US government.
>> This is just, you know, this is just the beginning. This is just the beginning. I mean, they're going to have to operate the network. They're going to have to add to the network. They're going to have to There is a lot to come. There's a lot to come.
>> And you know, they're going to have to make the network very resilient from attack. So, it's going to be interesting to see to what extent they're going to maneuverability of the satellites, the awareness of the satellites to their surroundings. It's this is just the beginning. This is just the beginning and uh you know ultimately the Pentagon is also going to have to have data centers in the sky. It's going to have to have the inference capacity
>> makes sense
>> to to manage the network. Um so there there's a lot to come. There is a lot to come.
>> That's a very good point. So SpaceX seems to I mean we know this already but it's worth repeating that they are really the only game in town for so many things. This is one Amazon clearly or not Amazon, I'm sorry. Uh Blue Origin could be an uh an option and they're going to work on it, but far number two, far away. So, uh
>> well, they're going to have to have let let me just make a point. They're going to have to have alternatives. Yeah,
>> it's just it just absolutely necessary to have backups and to have multiple different source sources for launch, but the bulk by far the bulk of the launch is going to go to SpaceX for obvious reasons because they have the ability to launch the bulk. That's the key.
>> NASA has making some big moves now that Jared Isaacman is now the new administrator. Uh they just uh announced that they're going to the moon. That's the next project. They released a new video of a man vehicle that they plan on using while driving on the surface on the moon. We'll play that later. Elon responded to that saying, "Time to build the major base on the moon." Um, and Jared Isman came out and he said, "SpaceX is probably our greatest commercial space company. Hands down. We rely on SpaceX heavily to put our astronauts to and from the International Space Station. SpaceX is our is probably our greatest uh you know commercial space company hands down. We rely on SpaceX heavily to put our astronauts to and from the international space stations. We just modified an award to provide up to I think six additional missions uh to SpaceX in that regard."
>> And then this is uh the vision. We'll go through each of these uh line items but uh yeah commitment by the government with SpaceX seems to have solidified at this point. That's good news for SpaceX.
>> Yeah. And you know it was a given. There aren't any alternatives. You know it right now we are looking forward to Blue Origin being able to launch vehicles to the moon and it's going to come. It's it's going to be with us before the end of this year. But the capacity that they are going to be able to launch the volume of launch that they're going to be able to provide is just not there. It's just not there. SpaceX right now between Falcon, Falcon Heavy and the upcoming Starship are able to launch tens if not 100 times the capacity of Blue Origin. And we need that capacity. We need everything Blue Origin can launch. We need everything ULA can launch and that is not enough. The only the only vendor that can launch the volume that the United States of America is going to need is SpaceX. And there's no doubt the others can, you know, be an alternative. They can be additional vendors. They can whatever they can launch, I'm sure the United States will buy. But at the end of the day, the quantum of mass that we have to launch to orbit as a country is huge and we're going to need every ton that SpaceX can deliver and it's a lot of tons.
>> Just glad that this is US uh based companies both Blue Origin and SpaceX because it it it means dominance of the space
>> which is so critical for everything. Um this is the website that NASA released their image imagining a future where we will be uh having a permanent base on the moon. This is take out the music here but uh you know I don't know collapsible vehicles
>> maybe should be
>> I saw those Yeah, I saw those vehicles in Houston. I saw those vehicles in Houston.
>> Okay.
>> Yeah. I mean they're they're they're real. They're the prototypes already exist. They're they're ready to manufacture them for sure.
>> Mhm. So, this allows the these uh these vehicles to travel. Yeah, you absolutely need space buggies, dune buggies.
>> Uh for sure. I don't know what that is. Is it Is it tracking? Is it mapping?
>> Yeah, it's mapping. It's mapping. It's creating a Yeah.
>> top of the Look at this. So cool. uh you know okay so that's that and then uh let's take a look at the actual uh vision that they have for the moon base phase one phase 2 phase three phase one is from now to 2029 phase 2 is 29 to 32 and then phase three is 2032 and beyond so 2026 this is six years and beyond they're saying okay you know assume that they're going to be late but you know within a decade we will have a semi-permanent crew presence So at first it's reliable access to lunar surface and experiment. Okay. So we've done this 40 years ago.
>> No, there's a big difference. There's a big difference.
>> All right. Big difference.
>> Well, let me just days.
>> Okay. Let me just say about the 40 years ago.
>> We sent astronauts to the moon and we could manage a few tens of hours, maybe a couple of days. What we're doing now is we're sending astronauts to the surface of the moon where they can last weeks if not months. So there's a very big difference for what we did 40 years ago. We dropped people on the moon. They moved around.
>> 40 years ago, by the way.
>> Yeah. Yeah. I I was there.
>> 50 years ago.
>> You were there.
>> I was there. Yeah. 50 years ago. I came to the United States to see Apollo 11. Uh the so but but those days we you know we were able to get somebody to the moon a few days and then get them off again few you know not more than a few hours really a couple of days. What we're aiming to do now is be able to put them on the on the on the moon and not days but weeks and ultimately months and ultimately years. So there's a huge difference in approach.
>> How how much money do you think the US government is willing to put in? I mean do they have a budget for this? Is it going to be a trillion dollars? And the reason I'm saying this is that who's going to get all this money? A lot of it will go to SpaceX.
>> No, it's not a trillion dollars. The the It's a 20 billion US base is what they're saying. Yeah.
>> Yeah. So, it's in the billions and it's over time it's in the hundreds of billions, but it's well within the budget reach of what NASA is budgeting right now.
>> NASA is spending a lot of money on a lot of things. NASA's what Jared is trying to do is concentrate his his investments in specific objectives instead of you know spreading the wealth all over every state of the union. He's focusing on mission rather than focusing on giving money to the states. And so the mission right now is to establish a permanent presence on the moon. It's going to take several years to get to permanent presence, but it's going to start with presence that is not hours, but measured in days, if not weeks.
>> Gotcha. And just very quickly, phase one from now till 2029. A rapid series of robotic missions to scout the lunar south pole region, major increase in lunar activity with up to 25 missions, including 21 landings, crude and autonomous rovers for mobility demonstrations and surface preparation. four drones, early demonstration of power, navigation, communications, nuclear radio, isotope heater unit. It really is something they should have been doing a long time ago instead of the International Space Station.
>> Um,
>> and then 2029 to 2032 is early habitation. Okay. uh transition to assembling semi-permanent infrastructure, deployment of expanded solar power systems, upgraded rovers, uh all that delivery up to 60 tons of cargo through as many 24 landings, and then phase three is a sustained human presence. That's the goal.
>> And sustained presence will mean relays of human beings just as we have for the space station right now,
>> the International Space Station. So,
>> but more people, right? I mean, if you got Starship, you can send them to the moon as a vacation.
>> Well, I wouldn't go that far by 20, you know, 32. I would say 2032 still astronauts, a relatively limited number of people, maybe tens of people if we get beyond if we get to that level. But you know, you can look forward to a a 2050 period where there's a permanent station with actual you vacationers coming to spend time to bask in the sunshine of the moon.
>> Yeah. Yeah. Yeah. Nothing to do. You go there and you sit inside a room.
>> You can explore. It'd be very spectacular exploration by the way. Um so that is obviously government contracts awarded to SpaceX and like you say there's many more to come. This is just the beginning.
>> Yeah.
>> Because there's no option and the government needs to do this to have dominance uh military dominance communications.
>> Well by 2032 I think that there's going to be sharing between Blue Origin and SpaceX. There isn't another player but and China will be there. China will be there as well competing. they'll make this a a mission for them as well. Okay. So now there's a partnership between StarCloud and Starlink. StarCloud is an aerospace but also AI infrastructure. They were first to put up a you know small version of an AI data satellite. Um Philip Johnson the CEO said, "I'm super excited to share that we've signed a contract with SpaceX. Starlink will integrate its mini laser terminals onto our satellites for high bandwidth low latency connectivity. There's no StarCloud is to announce it will integrate 50 of the Starlink mini laser terminals across 25 satellites. Each of the StarCloud satellites will carry two Starlink mini laser terminals. First hardware is expected in orbit within one year."
>> Very exciting.
>> What does that do? I mean, well, the mini laser terminals are the way that the star cloud um satellites can create coherence where they can compute simultaneously.
>> Mhm.
>> For inference, that's very important. I mean, you don't need the level of coherence that you're going to get in um you know training where you'll have to get coherence on a very large number of but but in when you do inference you definitely want to have that communication link you know between your processes if not coherence then very very rapid link but certainly the laser connections could probably create coherence. So those laser connections are very important and to you know SpaceX have produced that for their satellite links for for their current uh Starship Star Link links. Um and ultimately um you know the form factor of the StarCloud um satellites are going to have to be very similar to the Star Link uh satellites. They're going to be flat. They're going to be dispensed by the PEZ dispenser on orbit in order to go into orbit. So, they're going to look a lot like Starlink satellites.
>> Mhm.
>> Uh in terms of form factor and and design.
>> Yeah. And so, but and StarCloud are going to launch through guess what?
>> SpaceX.
>> Starship.
>> Starship. SpaceX. Starship. So SpaceX is willing to have partners like StarCloud, but they're a competitor to SpaceX own goals, aren't they?
>> Yeah. But right now, SpaceX is doing exactly the same. They're launching ASD satellites. They're launching satellites for Amazon. Yeah. I mean, one of the reasons SpaceX is in the situation that they're in is that at the from the get-go, they said, "We'll launch anybody satellites, standard price for all." So, you know, they they have convinced the industry that they're hands off, that they will do a fair deal, give a fair deal to everybody.
>> Okay, this is
>> you only have to look at their financials because they don't make a lot of money out of Launch. In fact, their launch is losing money,
>> right? So wondering
>> from their perspective, launch is not launch is an enabler of their business and they're not trying to keep it as a monopoly. They want everybody to succeed.
>> Do you suspect or would you forecast that StarCloud will be bought by one of the big AI, you know, frontier companies?
>> I think there's a fair probability. You know, it's going to they're going to put a lot of chips on the table when they come to deal. a lot of chips on that. It's going to be very difficult for StarCloud to turn the money down. I mean, I think they could sell out for money today.
>> Yeah, I think that's going to happen soon.
>> You know,
>> that's why I'm
>> talking about soon. But, you know, I think I think if I were Anthropic or Open AI, I would be watching the other guy to see he doesn't move first, but I would also be watching StarCloud to see them beginning to succeed. So, it's going to be, you know, a very interesting poker game between those three
>> because StarCloud has been researching and u, you know, exploring AI data centers even before Elon announced that they're going to do it too. So, they've got some, you know, years of
>> they don't have a lot of I don't think they have a lot of technology that SpaceX doesn't already have. Remember, SpaceX has had processes in orbit for years.
>> Yes. Yes. Yes. I know I I'm not saying that they're behind they're sorry like SpaceX behind. I'm just saying that these guys have actually thought about AI data centers a lot of thought to it. Yeah.
>> Yeah. And I have a feeling and I know that probably true. It's not that Elon just announced it a year ago. He was thinking about this like a decade ago. This is the plan all along. He just didn't say anything about
>> the clue. If you want the clue, just look at StarCloud's evolution of design.
>> Yeah. where they were before and where they've come now. And they had their own design. It was interesting. It was fascinating. It was kind of the first the first way to think about it. Once they saw SpaceX's design, once they understood the design considerations and once they understood the launch limitations and the launch opportunities, their design collapsed into SpaceX's design. Very similar. Yeah. Yeah. Yeah. There's
>> who's ahead? Of course, it's going to be SpaceX that this is their only one. They've been doing this for years. Okay.
>> I don't know about ahead. I think the demand is going to be so great that everybody's going to participate.
>> Yeah, for sure. Uh Starlink is being adopted by airlines and so just now American Airlines announced that uh they are going to adopt Starlink so you can have free Wi-Fi on their planes. Uh start 500 airplanes starting in 2027. they will install Starlink. This now makes 38 airlines have partnered with SpaceX Starlink. Uh Sawyer calculates 6,300 commercial aircraft already have Starlink installed or under contract to receive it. Here are all the airlines. You can see that they basically have won this at this point. I mean this is this is uh this is you know they're all just coming in at this point. Um there are all the
>> about there's something like something between 18 and 24,000 air
>> aircraft in commercial services. I forget the actual number. I should have looked it up before we met but this is somewhere between a third and a quarter and a third of the entire market. Now we probably can count out the
>> the Chinese airlines and the Russian airlines. Russians not m much much not many but Chinese is a fair proportion. So I would say that they're about between 25 and 40% of the market right now. And um you know there are two airlines I think JetBlue and Delta that have nominally taken the um Amazon offering but it's going to be very hard for them to stand out and wait for that that you know that that company Amazon's whatever they call it today Leo. Yeah. Amazon's Leo.
>> Low Earth orbit. It's going to be
>> Yeah, it's going to be.
>> So, Delta rejected uh Starlink because it wanted to provide internet connectivity to passengers via the Delta Sync portal instead of the Starlink branded portal. Delta has since chosen to partner with Amazon Leo. That was the original understanding. The CEO responded saying that that's not the reason and I'll go through that. But uh sorry thinks this will result in Delta falling behind many of its competitors and offering high-speed Wi-Fi on board as many other carriers already offering or installing Starlink whereas the Amazon's LEO airplane Wi-Fi is still a couple years away or more. Um and then yeah LEO has 300 satellites in orbit. So uh Delta said we're not going to do it. Um Elon replied saying not exactly. SpaceX requires that there be no annoying portal to use Starlink. Starlink Wi-Fi must be must work effortlessly every time. So, you were at home. Just super simple. Delta wanted to make it painful, difficult, and expensive for their customers. And then the Delta CEO responded said, "That's not true. Incorporating Delta Sync with Starlink would have been permitted under SpaceX uh inflight Wi-Fi agreement." The the reason we chose Amazon's Leo is because Amazon offers um I think movies right so they because they offer mo well he says fastest most connective uh cost effective technology which is absolutely false but it's because they offer inflight movies is what I had read earlier too
>> no they don't offer Leo doesn't offer inflight movies Leo would offer inflight movies the delta network yeah well
>> because It's Amazon. It comes with Amazon Prime which comes with all their movie library. And I think that that's
>> I see what you're saying.
>> He was saying,
>> "Yeah, but they could offer that through Starling."
>> Well, it was okay. Whatever. So, there's a fight and Delta I just want to if I'm telling you that American Airlines signed up Starlink, I need to say Delta said they're not going to do it. Yeah.
>> Yeah. And it's true. I mean, it's possible that Amazon are offering some sort of access to Prime as part of the offer and that would be very intelligent but you know Delta could pay I mean Amazon the airlines could pay the the Amazon
>> tax on on on Amazon movies but look
>> we'll see I mean we'll see the pressure on is going to be on Delta next year and I don't think that 2027 is possible for LEO at this point. I just don't see it. I I just don't.
>> Do you So, this there's a big debate whether or not people actually choose airlines based on um whether or not they're going to have Wi-Fi for free or not.
>> I can see why it could be, but I I right. I've seen um I think Chuck Cook, who's an airline pilot, said no, people choose airlines because of price. Price is the number one. Obviously makes sense.
>> I don't think it's because he's a pilot. I think because he's intelligent, he understand, he gets it. I I think that's why people choose it. There are a couple of things people use to choose airlines. Most of all, it's about price and the route um availability and you know their own personal experience and you know it's a mix of those things. There's some airlines I won't fly on. I mean, most of them I won't fly anymore, but you know, airline travel is terrible. I mean, it's shocking.
>> You know, I I choose to go by Cyber Truck or by private. Traveling on airlines is a terrible business today. Terrible.
>> The experience is horrible.
>> I mean, if if you can buy Wi-Fi access for six bucks, I don't know if people will choose that just because of not having Wi-Fi. But the Wi-Fi is access is terrible compared to what you can get. I' I've had so many bad experiences where I'm on a flight and I, you know, even if I pay for it or don't pay for it, I I can't get it won't work. Happens all the time. And I'm not talking about cross ocean or something that it's just frustrating.
>> So I can see I would if there's that many options, I probably will not choose Delta because it's just too many other options where it's part of it. It's like you have to offer this now. So yeah, I think it will affect me a little bit. Not at all. Okay. So this we talked about four big partnerships that Tesla SpaceX just signed, but there is one that's negative news uh for SpaceX. Of course, you'll imagine what the EU is going to do. They need to protect their mobile carriers uh in the European Union. And so and uh so the Starlink mobile uh you know so so what happened was European operators announced I'm sorry I'm jumping around here you go to want to give the bulk of their spectrum to EU tech. So they're going to allocate the bulk of valuable mobile satellite spectrum to European companies and they're going to reduce the share US operators can acquire because they don't want to have reliance on big tech and they want to promote domestic businesses. uh EU move is driven by concerns over China's techn technological rise and dominance of US tech giants. I mean, you're you're getting hit on both sides and for you to think you can this is going to be useful for you. We'll see. Elon's so Starlink and Amazon, they are major players in a satellite internet market and they can still they can still bid for it but the European Union is trying to reserve. So onethird of the spectrum will be reserved for state use such as security and military and then two/3s will be split in half between uh EU and non-EU operators. So not a big deal but just interesting that they're going to go that route,
>> right? And Europe, you know, oh man, talk about committing suicide. I mean, Europe is just in a terrible situation. Terrible situation. I I
>> I don't know what to tell you. I mean, European growth has stalled to the extent that, you know, they were right up there with the United States. It looked like they were going to grow faster than the United States. Looked like they that the euro, you know, was the magic bullet that was going to lift Euro up and so Europe up and so on. And they've just fallen flat on their face. Terrible. Terrible. But such incredible opportunities that have been wasted. It is what it is.
>> It is what it is. Yeah. Okay. So, uh what do you what you're thinking, Larry? Uh SpaceX IPO June 12th. Do you think that there will be like this is all designed or it's just happening? Will there be more announcements prior to the IPO to show, hey, SpaceX is not, you know, they got deals lined up?
>> the pace of uh announcements from SpaceX um appears to have sped up, but actually if you go back over the years, you'll see it's consistent. They have signed government agreements, agreements with the government year after year after year after year. Um so that's not unusual. They've been buying, you know, bandwidth year after year after year. That's not unusual. Um they've been, you know, I I think we're just much more aware of it now.
>> Yeah, true.
>> But if you were an investor in SpaceX, you were tracking this stuff for a long time.
>> Yeah.
>> You know, and you you were watching this and so you're much more used to it.
>> You know, this is the third version of Starship that went up. So, everybody is very excited about the launch of Starship, but there's been, you know, 11 other launches.
>> Mhm. The 12
>> over the last few years.
>> Yeah. This is Yeah. So I I think that people have just become aware of just what a powerful company it is and you know people are talking about well we're on the very brink of robo taxi at Tesla. We are but SpaceX is on the very brink of Starship. You've got both companies are really going to hit their stride in the coming 3 to 5 years. really going to hit their stride and you know what the stride is going to be at pace with one another. So, it's pretty exciting times for both those companies.
>> Thank you so much, Larry. I appreciate your knowledge uh because you've been following SpaceX for so long and now that it's uh important for Tesla investors to understand this, we have you to educate us, me, you've been educating me. Thank you so much, Larry. Appreciate you. Follow him on his website, lumisenti.com. Thanks, everybody. I've created a website that is the most comprehensive resource for the Tesla investor. Please check it out. Simply go to my website at herbond.com.