SpaceX Aktie

[Audio Gap] Launch is foundational to everything you do.

Absolutely.

You are 10 years ahead of the world in reusability, but Starship is designed for rapid reusability and dramatically more mass to orbit at a much lower cost. So can you just talk about launch, how important it is and then Starship in the context of that?

Yes. I think launch, it starts -- if you're going to be a space company, I tell people, it's hard to be a space company and not have assured access to space. And so we started out making sure that we had launch nailed down. And Elon really focused on driving down the cost of access to space at a far cheaper price than anyone had ever even thought of before. We're now lowest cost per kilogram to space ever in the industry, and we're looking for Starship to do another 10x improvement as we get to rapid reusability with Starship. So it is definitely at the core of what we do, and it's the enablement for all of the other businesses, whether it's Starlink or Direct-to-Cell very soon or now AI compute.

And so I think you absolutely have to start when you talk about SpaceX by talking about our launch capabilities. And Starship will be, to your point, next level because what we're doing now is taking on this huge, I would say, like the Holy Grail of rocketry, which is rapid reusability. It's one thing to bring back the first stage, which is amazing, right, and transforming the industry, but we did that 10 years ago with Falcon. What we're doing now is we're flying the largest rocket ever built with the goal of it getting to aircraft like operations. And that is a completely different dynamic, but I think that's what it will take to be that catalyst for the whole space industry related to kind of turning the 2030s into something that we had expected when we were kids related to the space industry.

Where in the Starship program are we? We just had a launch. It was a V3 of the ship and the booster. It felt like, I will admit, it felt kind of like we were both there. It felt like a high-risk event heading into an IPO, but it -- but from my perspective and as far as I could tell from the SpaceX team, it seemed very successful. So, what did we learn? Where are we with Starship? And where are we on that path to rapid reusability?

I think our first launch of V3 that you're referring to from just last week was a huge success for us. The fact that we were able to demonstrate the full system capability, the new V3 raptor engines, all of the changes that you saw on the bottom of the vehicle, all the operational changes that we did as well, and then you saw that soft splashdown at the end of the second stage, I think, gives us a lot of conviction about where we're going, not just in years to come, but really even in the next couple of flights. And that's really exciting because that is, as we were talking about, that platform or catalyst for the rest of the business. Having a rocket that can take 100 metric tons to low earth orbit is going to be hugely important for everything we're about to go do.

And that's 100 metric tons at what cost relative to Falcon? At what cost?

Well, I think as soon as we can bring back that second stage to the tower and start rapidly reusing it in the next, we'll just say, in the next couple of years, I think you're going to experience a 10x from a cost per kilogram to space from where we're at with Falcon today. And so that is, I think, a huge springboard for multiple pieces of our business.

I think of launch as enabling a variety of applications for SpaceX as a company. And if kind of Microsoft, they had the operating system and enabled a lot of applications, launch is foundational. And the first and the biggest and most well-known application is Starlink and your connectivity business. And can you just give us a sense of the scale of that business, the growth of that business?

Yes. It's very exciting because we actually haven't been in the connectivity business for that long. When you think about it, really having our first production satellites in space back 6 years ago and ramping that business to where we're at today with over 10 million customers and over 10,000 satellites that we have now flown to space in 160-plus countries around the world, it is clear that we're delivering a capability that the world really wants. And I think that it just gives you so much conviction when you know you're delivering a great product, and we've had so many notes in. In fact, we send out an email each month with how many communities around the world we've had a positive impact in. It's really special, whether it's indigenous tribes in Canada or down in Brazil, where we're connecting schools or in Africa where they haven't had any connectivity before.

Bringing something like Starlink to the world has been pretty amazing. And so what it's done is it's given us an extension of the mission we were talking about. First and foremost, we want to make mankind multi-planetary. But above and beyond that now, having the ability to connect the other 3 billion people on the planet and really bridge that digital divide has been really special for folks, and I think that really resonates. But yes, I agree, Starlink was that first piece of the business, and I think that that 10 million customers can become hundreds of millions of customers around the world in time because of the fact that it's so much more efficient to deliver to so many different locations from space than it is terrestrially.

And so we're just heading down that path right now, and we're incredibly vertically integrated related to it. So I think we end up being a little bit of the blockers now become our own capabilities, which is great. That's exactly the way we want it. But what Starlink also was, was it was, I would say, that catalyst for the Falcon business to really ramp up operationally because if you don't have payloads kind of lining up, then you don't really have a reason to go from 10 launches to 22. We launched 165 times last year with our Falcon vehicles. And what we would do is we bring multiple stacks of Starlink satellites to the launch site such that when there's an opening between launches of third-party satellites, we can then, okay, we're going to take that slot for Starlink. And so now as you go into our next phase with Starship, I think we have another catalyst like that. And above and beyond Starlink now, we're going to have AI compute satellites.

Absolutely, 100%. And I'm super excited to talk about AI compute, but I do think it is Starlink, I'd love to just double-click there because I am a former telecom analyst, so it is near and dear to my heart. And just some observations that come to mind for me. One, people have forgotten how big the telecom markets are. I just call it round numbers, $800 billion for kind of internet access, $800 billion for cellular connectivity. So a $1.6 trillion market, plus or minus, to within the nearest $200 billion. And what really strikes me as a student of the telecom industry is there's never actually been a differentiated or disruptive product in telecom before. Because everybody has access to the same towers, broadly speaking the same rights of way and the same equipment. The products end up being very similar. And this was true for local telephony. It was true for long distance. It's true for cellular. I am a very serious video gamer. I'm not very good, but I play video games the way a lot of my peers play.

You're my boss.

But I am -- I take it very seriously. And my grandfather used to say that age and treachery will always triumph over youth and skill. And in video game terms, that means having the best GPU and the best connectivity.

Sure.

At every location I've been to, Starlink is better, it is faster and it is lower latency. And I think latency is a very important point for the user experience. So can you just talk about how this product differentiation is going to help you go from 10 million to 100 million to hundreds of millions?

Yes. I think it's pretty funny because it's for sure we'll talk about broadband in a minute, but especially if you think about the Direct-to-Device that we're going to ramp, right? Our next generation of Direct-to-Cell or Direct-to-Device will be 5G quality, right, in the next few years. We're about to bring something that's pretty unique, to say the least, and something I think anyone would want, which is to go anywhere with your phone, have global roaming, be out in the middle of the desert, on the highest mountain and not have dead zones. I mean, these are pretty special things that I think people would want and probably pay extra for, but especially if it's the same price. So I think we are very excited about bringing a very differentiated product to the market.

Again, it feels great when you're bringing a product, I think, that's great for everybody. It's also going to be great for disaster recovery, and when there are emergencies, the fact that the network doesn't go down and you don't have to worry about the tower being out. But circling back on the broadband side, the fact that you can deliver low-latency, to your point, I think that's really critical, low-latency, high-speed capability really everywhere, other than the countries that I'm not allowed to go into, is something that just won't make sense terrestrially.

And so I think it will become harder and harder to justify many of the deployments on a terrestrial perspective because Starlink now exists. And I do think that people really now are starting to see, even on aircraft, right, when you start to see all the announcements, United Airlines, now American Airlines just announced and many of the others without listening over and over again, getting on an airplane and having that type of low-latency, high-speed experience really kind of opens people's eyes to what it could be at their own homes or offices as well.

Awesome. And I do think I'm glad you brought up the disaster, what Starlink -- what SpaceX does anytime there's a natural disaster. It has undoubtedly saved lives. Charging Starlinks for free, turning them on, this has saved lives. So, outside of Starlink and orbital compute, which absolutely merits its own discussion, what are the other applications enabled by Starship or businesses? What are you most excited about?

Well, I do think on the connectivity side, those two businesses will ramp nicely. And what's also great about those is I think when people think about space, they think about the new markets that we will create in the years to come, which I agree with that. Whether it's point-to-point transportation on earth and 30 minutes flying to Singapore kind of thing or whether it's the lunar economy, I think all of those will happen. But what I think people discount is there are massive, to your point, almost $2 trillion of existing markets just in connectivity that are existing markets today for us really. And so the fact that you're able to deliver a better product in an existing Earth market before even talking about space is probably what gets missed some of the time.

And it's not just a better product, you do have a cost advantage.

Yes. You're not digging ditches, right? You're not digging ditches. You're not spending all that huge amount of upfront cost. You really send the terminal out once you've established your network of satellites, you send the terminal out and that's basically most of your customer acquisition cost.

Yes. Better, faster, cheaper has been a winning experience.

It's just good combo.

In my time as a tech investor. But any one or two of those markets, whether it's freight, whether it's point-to-point travel...

I think the next big one though is going to be AI compute. And so we should definitely spend some more time on that, but I think that is a market that really needs Starship to really happen. Because they're large payloads and you really are focused on cost. And so I think that's the one that's kind of near and dear for us because you already see those next two happening, right, and this will just be a significant enhancement. If I think about what Starship's going to do for our broadband satellites, our V3 satellites that we're about to fly in the coming months here on Starship, every Starship launch of those satellites brings 20 times the capability of what we're flying with a Falcon launch today. So it is a huge enablement for our broadband business and soon to bring 5G capability on the Direct-to-Cell.

So Starship, rapid reusability, they really enable this much larger Starlink constellation. That takes us from 10 million to the hundreds of millions. They actually lower the cost of Starlink further by lowering the launch cost. And they enable this exciting new -- and well, they'll enable Direct-to-Cell, which is awesome, but they will enable orbital compute. And I would love to just people hear data centers in space. And after lots of interactions on X, I realized that a lot of people are picturing like a pin to God sized building floating around in space. And that is not what it is.

No.

It is orbital compute is racks in space. And like let's just -- let's start there. Like I'm sure there's going to be images available to people, but just describe what one of these satellites is going to look like so people can conceptualize it.

Yes. I love the racks in space. I might steal that from you. I think that's the right way to think about this. I actually had the same issue when someone said data centers in space internally the first time, I thought, oh, wait, how are we going to connect all these pieces together? And like Johnsen, this is literally like another constellation. Okay? But really, you then realize virtual networking has been obviously a key component of networking for a number of years now. And this is that same concept of virtually networking rack by rack, to your point, of satellites that look just basically like larger versions of the Starlink V3 satellite we're about to fly for broadband.

A lot more solar and now compute over the top related to -- we'll just start with NVIDIA GPUs on there and a large kind of sheet of metal from a radiated cooling capability perspective. But otherwise, it looks largely the same as what we're flying from a comms perspective, although we've pulled the comms payloads off, obviously. But really, I feel like people think that this is a completely new concept for us, and it's not. It's kind of a logical extension of the satellite technology that we're already using today with all the connectivity down to earth with the inter-satellite links connecting the different satellites together, the prop systems. I mean there's so much of what we're already doing with Starlink today that we immediately get to benefit from on these. And I think when people see the picture of one satellite versus another satellite, they kind of aha moment kicks in of, oh, well, these guys are going to be able to do this very quickly.

Absolutely. Yes. So just maybe help anyone listening conceptualize a rack, an NVIDIA rack, the NBL72 rack. The server is like, I don't know, a couple of pizza boxes. And then you stack those servers together, you make a rack, 8 feet high, 3 feet wide, maybe 4 or 5 feet deep. And that rack is going to be at the center of the satellite. It may not have those exact dimensions. It may have more or less than 72 GPUs depending where the engineers land, but we're going to have that rack. We've got solar wings. I tried to eyeball it. It looked like they're 200 or 300 feet long, maybe 150 feet long out to each side. And then it's in a sun synchronous orbit and the radiator stems behind it, so it's always in the shade and cold. And so let's talk about what that design enables, what advantages that enables from a first principles perspective from orbital compute, around power, around cooling, around cost, around latency back to earth.

Yes, it's funny. So I agree on all 4 and the one that I think maybe start with is regulatory, right? The fact that people are already having concerns about, I don't want this data center in my backyard is clearly a trend, a little bit concerning trend. And so the fact that we can bring a clean energy, good for everybody type solution by just sending these up and being powered entirely off the power of the sun is pretty amazing. The fact that the solar cells are in space and get roughly 5x, if not more energy per cell than they get terrestrially because they don't have to deal with going through the earth's atmosphere and they're in sunsync where the sun is on those cells 24 hours a day. And the fact that you can make them cheaper because you don't need the protection, the glass protection on these cells because there's no environmental issues when you're up in vacuum, you start to see these first principles kicking in on the power significantly.

And from a cooling perspective, which is one of the more challenging things already to deal with on the terrestrial side. If you walk in one of our data centers, all that liquid cooling and all the plumbing that we've had to do and really engineering around that to really figure out innovatively how to do that becomes very straightforward, radiative cooling, simply kind of extending the radiative cooling solutions that we're doing with Starlink and now doing it with AI compute. And then obviously, no land lease to deal with. And so really, it then becomes your cost is your satellite and your launch. And I look at it being a tech person because I was semiconductors before space, you kind of have those cost curves traditionally that you would have, right? And as you ramp up in volume and time, your costs go down and you're benefiting from Moore's Law or maybe soon the different type of Moore's Law.

But if you look at the satellite, most of the cost is silicon, right? And so we're ramping up factories, and we're benefiting from silicon cost reductions, process node to process node. So our costs are going to go down over the next few years. If you look at the terrestrial solutions, the curve is going the other direction, right? Everything is getting more expensive, right? The way you're doing the cooling, power bills are not going down and land/regulatory is getting more and more challenging. And so I think this just all lends to better for the population and a trajectory to be significantly better from a cost perspective as well.

Awesome. And how do you think like this market, compute is one of the largest markets in the world today. How do you think about the size of that market when you will enter it -- and we'll talk about terrestrial compute. But when you will enter kind of like begin to have orbital compute working and maybe a range. This is really hard stuff.

Yes, it is. In fact, my engineers, they've heard me explain where it's kind of a logical transition, and we've done most of the thesis of this already. They say, you got to -- you got to make sure people understand there's a lot of work still to do. I said, I understand that. And some of that is actually scaling this. Scaling to the numbers that we're talking about such that you can put up gigawatts a year in space is a very hard challenge. And we have just been able to demonstrate scale, whether it's launch scale or whether it's flying and building ourselves thousands of satellites a year.

And that is definitely going to be one of the challenges here again that we deal with here. But certainly, we're going to be able to demonstrate capabilities as soon as next year. And so it is near. And I think the ones that say, we believe, like if you list kind of the people that are supporting orbital compute solutions at this point, it's basically a who's who of the tech/AI industry. I won't list other people's names, but certainly, Elon Musk will be at the top of that list, right? But I think they think that it's a lot further away because you can't do it without launch, right, without the rapid reusable launch that Starship is going to provide.

I will ask Grok a question, Grok being SpaceX's AI, general purpose AI. I'll ask Grok a question. The inference will happen on an orbital compute satellite and come down via Starlink Direct-to-Cell to my cell phone.

And will be amazing.

What a moment -- and whenever it happens, like I will personally find that very exciting.

I completely agree. Yes.

And then can we just kind of like conceptualize the scale of this? Because I think people -- megawatts, gigawatts -- like I think there's one -- there's maybe a few now, but there's only a few gigawatt scale data centers here on planet earth today -- operate one of them [indiscernible] together. But like give us a sense of the scale of a gigawatt data center and how much power that is relative to the -- I think a single Blackwell rack consumes the power of 100 American homes, and we're putting in a gigawatt scale data center, hundreds of these racks together and stitching them together. So just what does it mean gigawatts of orbital compute per year? And I don't think your boss is going to be satisfied at gigawatts.

He is not, nor am I. And I think that's why you see us spending so much time to get Starship to rapid reuse. Right now, with the existing first iteration of our satellite and our V3 version of Starship we just flew, it's roughly 200 launches for every gigawatt that we put up. And I would just emphasize that's first gen of the satellite and the rocket. And so we are just starting down this path. But even at that point, we're capacitizing for thousands of launches a year right now. And you see the 2 launch towers and pads in South Texas. You see the first one almost done at Cape Canaveral and the second one on its way with Launch Complex 37 within the next year. And so those first 4 towers alone kind of give you that initial path, and we've got other locations that we're starting to talk about, too. And so I think that is critical to start down the path of having that capacitization as the rocket itself starts to ramp.

Awesome. I would love to talk -- before we talk about your AI business, [Johnsen] said that bringing Colossus I, which was the largest coherent cluster of Hoppers in the world online in 122 days, and these are [Johnsen] words, was super human in that he thought only Elon could have done it. Elon and the talented team that works with him. And I would just love to hear from you, what is it like working for Elon?

And how does Elon being so involved in the engineering plus this incredible sense of mission play into the talent of the company. Why could xAI now part of SpaceX do something like I vividly remember, a lot of people thought it was impossible and that it couldn't be done, and it wasn't being exaggerated. And I think it wasn't until [Johnsen] had said that, that people believed it had been done because it seemed so impossible. So just talk about working for Elon and the talent and...

Yes. I mean I've got 15 years working for him. It's always special. It's one of the reasons I'm still here, to be honest with you. He creates a culture where like we talked about where you set out with these -- what initially looked like audacious goals, and then step by step, you realize that you're marching towards something that is absolutely achievable. The schedules themselves are sometimes challenging to make as far as the initial schedule. But what's amazing is he does everything that he sets out to do. And I think that's the key here is -- in fact, if I think about going to Mars, for example, when I first got here in 2011, 15 years ago, people would be kind of like rolling their eyes when we talk about Mars and being a multi-planetary species.

Nowadays, when we say that, literally, the response is what year. It's no longer -- it doesn't even sound audacious. And I think what Elon, done a masterful job on is along with probably a lot of other things, is setting out these targets and then creating a fantastic business model around each piece of IP that you need for that end goal. It reminded me of when back when I was at Broadcom, we would go in and we want to do a new SoC. And if we were missing pieces of IP, we would do an acquisition, right? And you grab those pieces in because you want to win the next socket at wherever Apple or something. And here, if we need the next piece of IP, we're doing it organically for sure. But it was -- we got to get to orbit, then we need reusable rockets, then we need heavy lift with Falcon Heavy and now Starship. We want NAND carriage, right?

So now Dragon and now Starship. And then we need comms in space. And so you kind of go step by step by step and then you need rapid reusable launch. And once you have that, you get to the point if you're flying thousands of times a year, when a Mars window opens, you have a fleet of vehicles that you're ready to launch to for that month or so, and then you're back to your operational cadence again, right, because it's every 2 years. And you didn't really have to have a crazy investment to make that capability happen anymore. And now it's, hey, let's get the lunar economy going. Let's learn what it is to live in space, knowing that we're going to want those capabilities for the moon and then Mars as well.

And so I think that kind of step at a time has kind of removed any concerns that people initially had of how are you going to raise all this money for something and what's the business model around multiplanetary species -- and now people don't worry about that. And so we all get to stay here focused on the mission and yet the business model itself is pretty amazing. And I think you start to see that same dynamic happening with AI. where we're going to leverage this capability, it's going to ramp up our launch capability along the way. I think it's going to absolutely give us an extension to our mission related to bringing the human consciousness off planet, right, and preserving that consciousness in space, and yet it's a great business model for us step by step.

Just double-clicking on the talent and the engineering environment that Elon creates that goes into making each one of these pieces of the business, IP around it. Each element of Starship, each element of Starlink is kind of -- to me, there's many interesting pieces of engineering. But like what I always think about and just in terms of just kind of making sure everyone understands the culture of SpaceX is my understanding is Elon works on whatever is in the critical path whatever the hardest problem is directly with the engineers. So we have a mission, making humanity multiPlanetary. We have other AI missions that we'll talk about. So this is really exciting. We get the world's best engineers.

And then my observation is, I think, an underappreciated part of what Elon does is -- to me, if I talk to any engineer, one of their favorite times in life was that like college engineering course where they had -- were assigned on a team and they had to build like a remote controlled drone or a race car, and they worked all night. And it feels to me like that is what Elon creates for these exceptional engineers that are brought in by the mission, and just I don't know what -- you would know better than me, but I believe at one point, the raptor engine was like the critical gating factor. And there was a standing meeting every late Sunday or Monday night, and it just had to be the engineers who are working on the raptor engine. And maybe they're just 24 years old, but they're there in the small room working on that problem. Can you just talk about that environment?

I mean I think we've seen that type of dynamic a handful of times for sure. And you're exactly right. I think what's amazing to me is that he is in there in the details, working with the engineers on these critical issues. And it's also incredibly inspiring to know that your leader is in the trenches with you and working probably harder than any employee that I know, and I don't know how he keeps that energy level up for the length of the decades literally that he's been able to do it. It's pretty amazing. But I absolutely would tell you, I witnessed those technical challenges -- or technical discussions over the challenges that we face on a regular basis. Raptor engine was one of them for sure, but there have been many others along the way. And he's going toe to toe with the technical leaders on those items. And it's just incredibly inspiring.

And now we have that photographic evolution from Raptor 1 to Raptor 3 and now it seems like all the Raptors did great on the latest Starship.

They did. It's pretty amazing.

Yes. But so the first mission that SpaceX started with was make humanity multiplanetary. I think it now has other missions because you acquired xAI, whose mission was maximally truth-seeking AI; xAI had which is dedicated to free speech. And I think these are -- these missions resonate with people. And then maybe these all come together and I've heard expanding the light cone of consciousness, bringing the light of consciousness to the stars. This is kind of the overarching mission now that ties them all together. So I would just love -- I would love to hear from you, Bret, how you think about the AI business, and then we'll rip on some of it.

Listen, I appreciate it. I think that going into the AI business has a couple of different incredibly rewarding elements. Certainly, there's a financial opportunity and there's the opportunity to give us the reason to really ramp up to thousands of launches from a financial perspective. But I think it's also critical that we have the ability to make sure that the AI model that people start to really rely upon is a true seeking model. And so having the content, the real live content from X integrated into our solution, I think is important to us, and I think will, in the end, be a huge differentiator related to our AI solutions.

Awesome. Well, let's talk about the business. And the first part of the business that I think is probably most accessible to people is Grok. We've got Grok. We have an enterprise API business. We now have Grok Build, which puts a harness around it. We have terrestrial compute here on earth. And like let's just -- let's walk through each of them.

Well, it's probably not a surprise that we have a very diversified AI business because we've done the same thing with our other businesses. If I think back to our space business, the fact that we launched commercial missions and Space Force missions and NASA missions really gives us diversification. And then you look at connectivity with broadband and direct to sell and the fact within broadband, we didn't even talk about enterprise and government, but that's certainly a big piece of our broadband business as well. And so now you talk about AI and again, a very diversified business. Certainly, hosting others was a key item that we talked about related to in the next couple of years with orbital compute. But there's nothing better to prove out that business model than demonstrating it right now with the Anthropic deal that we announced.

We can do that right now with our terrestrial data centers. So certainly hosting others as well as building our own model, both enterprise and consumer, to your point, certainly, on the consumer side, the differentiation of our real-time data from X is huge. By the way, even X, I think we can do far better related to the optimization of the ads engine. We're investing in that technology right now. And you saw us not be happy with where we were at on the enterprise solution, on the coding specifically.

And so we went out and did the deal with Cursor and brought in one of the industry-leading solutions even on that front to move us faster and bring in all of that enterprise data. So I think in all of those areas, you're seeing huge strides already. But what I also love is that it's now SpaceX AI. If you go up there at Palo Alto, it is SpaceX. And you feel it already, you're seeing the impact of that, bringing our DNA and integrating the 2 companies as fast as possible has been really special. And I think you're just in the early days of seeing what we're going to do in AI.

Yes. I mean just actually, the rate of product releases has accelerated significantly. I do want to kind of double-click on this Anthropic deal. And with the Anthropic deal that you -- that has been signed and reported on, you're at a $3.75 billion run rate per quarter. So you are 50% larger than the company that I think of as being just outside the top 4. And so you have a top 5 AI infrastructure business by my math, and that's just -- that's my neck in math. But can you just talk about that deal, what that was like and how many more deals like that there could be and how quickly we can bring on terrestrial compute now that we have confidence there's offtake.

Yes. I think that just -- there's nothing better than just demonstrating the capability even before we get to space that we feel like we're bringing a solution to the AI industry that's desperately needed. I think Elon was very vocal even a year ago that he felt like the constraint was going to be compute and power, and you're already seeing that. And what we have is we have these dense training clusters, which makes it really premium compute that we're able to offer folks as well. But I don't want to also give people the sense that, that means we're backing off related to our own internal solutions. We're absolutely not. But the fact that we can keep our model and our solutions training and doing inference on the bleeding edge related to GB 300s in this particular case and really monetize the other compute in our terrestrial data centers is huge.

And I think you're going to see us be able to do more of that ideally with more folks over the next whatever time period we want to give it here even before we get to space. And that's really been part of the key. I mean we, at our core, are builders, right? We are strongly entrenched in building the infrastructure of the future. And so AI being one of those key industries. And so I think that you'll see likely more and more folks want to lean to us. There's just a tremendous amount of technical challenge in putting up these, like, to your point, gigawatt scale data centers.

So we should expect to see you guys ramp up the expansion of terrestrial data centers to support third parties who want to rid compute from you and for your own internal services.

Exactly.

Well, on Grok, would love to talk about that. Would love to talk about what Cursor could mean for the Grok business. And one thing that really made an impression on me is the very significant leap in Cursor's own internal model composer after just a few weeks of mid-training, reinforcement learning in the SpaceX AI Colossus II cluster. And you saw a pretty -- you saw just factually a noticeable jump in performance, and it is on the Pareto frontier for -- that measures cost relative to kind of intelligence. So this is effectively intelligence per unit of cost. Just talk about Cursor, talk about Grok, talk about where that business could go.

Well, it's a really great team, first and foremost, when we were doing the diligence and talking to Michael Truell and team. I think you know when you find a team that's a good cultural fit. And so once that was identified, then looking at the data that they were able to bring to the table for us, that was huge. The fact that they're working with over half the Fortune 500 and have thousands of enterprise accounts was certainly a huge opportunity. And then for them, they -- to your point, they were starved for compute, and you saw immediately what the benefit was for their tool. And so now having that cursor coding engine as well as our own Grok LLM and really the harness with Grok Build that's coming out really right now, it's pretty magical.

Awesome. And I would love to -- just a few words about Terafab, so just talk about Terafab and how the company is thinking about that.

Yes. I think Terafab is a really interesting one, being a semiconductor guy before we were talking about. And certainly, it's a partnership, first and foremost, with SpaceX and Tesla. And so now bringing in Intel into the fold it's huge, right? Having an industry leader of decades in the semiconductor industry brings that know-how to the table. I look at it as if you were starting up a foundry business from scratch, I just -- I think it would be so challenging to convince people to tape out their products to you. And so I don't even know that you could start a new company from scratch unless you had a captive customer like in this scenario, like SpaceX and Tesla saying, we will take every wafer that you can yield out. And so then it takes that risk away.

And then really, the risk is a capital risk only. And so I also think that there are going to be some very exciting elements of having, in my view, the entrepreneur innovator of our lifetime going and challenging the requirements in a new industry again, and sitting with the process engineers that have 50 steps to their requirements list and pushing on each one related to why that has to exist that way and bringing everything under one roof and taking a completely different approach, I think will yield a pretty amazing result, and Elon has been able to demonstrate that industry after industry after industry. But what I would say is we are doing this because we're very concerned about the supply chain constraints that might exist very soon in the next handful of years related to being able to fab out anywhere else.

If you look at it, when you start talking about NVIDIA or the AI chip or a TPU, all of a sudden, you start talking about TSMC, right? And so it isn't that you're being able to diversify out from a supply chain perspective if you go one more layer down. And so our concern is really more than anything else that the supply chain won't be there for us to ramp to many, many gigawatts, ideally 100 gigawatts a year is our target in the years to come without being able to have a terra fab. We need to make sure that we have assured supply of silicon.

And I would just say as an American, it's awesome to have more semiconductor manufacturing in America. It's awesome to have more manufacturing jobs here in America being created by SpaceX. And I'm sure you and everyone are super proud of that, but it's great for the country. So thank you. Maybe last question. SpaceX has been very capital efficient over the course of its life. But now we are -- we have Terafab, Starship, orbital compute. We're going to start putting a lot more capital both into the ground and into space in the most literal way. And can you talk about that transition? And can you talk about how it's going to be funded?

Yes. I think that really capital allocation has been one of the bigger challenges of this job for 15 years. And what I would just say is, we have a pretty good track record. right, of being able to do this. And certainly, the dollars are now bigger than they have been in the past. But I also am incredibly proud of the value creation along the way that we have already been able to achieve. And I think that track record also is something that people should consider when they're thinking about the future for us as well. But we really take an approach from a capital allocation, similar to what you would do in a just-in-time model for manufacturing.

You're looking to capacitize starship with different towers and air separation units for the fuel and additional hangers. And so you're looking at that, you're looking at whole new facilities for satellite builds and solar capability. And now you're looking at terrestrial data centers and orbital compute, all happening at the same time. And so you really have to go map it out quarter-by-quarter and just not get ahead of yourselves related to when do I need that capacity in each of these businesses.

And the timing, one might think there was some sound business logic and minds that work here because the timing does seem to work out really well with Starship starting to fly, Starlink V3 that enables -- that unlocks growth for Starlink and growth for Starlink is cash flows because it's a cash-generative business. That unlocks Direct-to-Cell, which is a new business that will presumably be high margins. And all that is coming online and ramping right when orbital compute when we need to start putting a lot of those racks into space.

That's right. That's right. I wish I could take credit for that, but that's certainly Elon. I just -- I execute on the man's incredible vision, but I agree with you the timing is pretty magic.

Well, Elon would say execution is everything and vision is a distant, distant, distant execution. So execution is important. But I also just think maybe to kind of bring us home, but we have Starship launch that enables everything. We have terrestrial compute gigawatt scale data centers. We have an AI model. We have Starlink. We have Orbital compute, and we have Terafab. And all of these play into each other and work together. And can you just -- can you just talk about what that enables? And just it is -- it's a lot of vertical integration.

It is. And I think when people look at it from the outside, they think about all these kind of disparate businesses, but it's actually not that at all. It is the fact that we have a launch platform that was Falcon and now is about to be Falcon and Starship that really is the enablement for every business you just listed. And so we get to just go get better and better at that core launch capability, that core DNA of being the space business of the world. And each of these vertical offshoots comes to play out where you have a differentiation because of the fact you're able to deliver a better product because of it -- it's coming from space. And it's different versions of satellites in most cases or it is back to our core of being incredibly vertically integrated in each of these core pieces of the business and really bringing infrastructure to the forefront in each of these.

And at every level, competitors can buy launch from SpaceX. Starlink is available to everyone. You're selling compute terrestrially to competitors. The model can be used by anyone. So while it's vertically integrated in orbital compute, Elon has said that competitors are welcome. So while the model is vertically integrated, it is also open at each level for and can be accessed discretely. And then, of course, if each one of these elements is a stand-alone business on its own, that just gives you more scale, further lowers costs, plays into the vertical integration.

That's right. Yes, exciting times.

Exciting times.

Hi. I'm Bret Johnsen, Chief Financial Officer of SpaceX for the last 15 years. Only one the company has ever had actually. And it's a pleasure to talk with you about SpaceX.

Elon started SpaceX with the goal to change mankind and make it a multiplanetary species. And what's been very exciting is we've been able to expand that mission with our Starlink constellation as well as with our AI solutions.

At our core, we're really builders. We're the only company building the integrated hardware and software infrastructure to really power multiple businesses. But we started back in 2002 at our roots as a space business.

We achieve what others think is really the impossible and we make that possible. If you look at some of the milestones that we have accomplished already in the space business, we're the first private company to develop and launch a liquid fuel rocket and reach orbit back in 2008 with the Falcon 1. We're then the first private company to successfully dock a spacecraft for the International Space Station in 2012. The first to successfully propulsively land a rocket from space, specifically the first-stage booster, back in 2015; and refly an orbital class rocket booster in 2017. The first private company to launch astronauts to orbit and fly to the International Space Station in 2020.

We are the first to have really a fleet of rockets that end with reusability, and drive from Falcon reusability today of the first stage to full reusability with Starship. 23 metric tons of capability with Falcon 9, going to 64 metric tons of capability with Falcon Heavy, to now about to be 100 metric tons with the Version 3 of Starship.

And really from a rocket reuse perspective, that has been the unlock mechanism. It's really driven down the cost of launch and given us the ability to drive up launch cadence, specifically having a hangar full of rockets to show our launch customers or having the ability to ramp to, just last year alone, 165 launches of our Falcon 9, and now moving into fully reusable with Starship.

Starship really has an unparalleled capability from a cost efficiency perspective. If you look at where this industry has been historically and where we were able to get to with just first-stage reuse on the Falcon class where we were able to drive out 85% of the historic costs, now we're looking at a vehicle that's intended to go drive a 10x improvement even from where we were already industry-leading with Falcon.

Along with the unlock from a cost perspective, Starship also gives us an unlock from a throughput perspective. So you see it with Falcon 9 in the expendable category, let alone Falcon Heavy at 64 metric tons going to 100 metric tons with Version 3 and then already starting to work on Version 4 in the design that should double that again to 200 metric tons to orbit.

We talk about the mission and, certainly, how we accomplish the mission. One of the reasons that we're able to do this is we run what Elon calls The Algorithm. And The Algorithm starts with, first and foremost, making the requirements less dumb. Questioning requirements is a key piece of our culture. We then move into deleting parts and process steps. And you see that, as an example in the picture here where you have the first version of the Raptor engine on the left going all the way to Raptor 3. And then once you delete the parts and the process step, you move into optimization, acceleration and automation.

And then pivoting to the connectivity business. Again, the connectivity business is really enabled by our core launch capabilities. We have now launched and operate a high-speed, low-latency global broadband constellation, otherwise known as Starlink. And really we feel Starlink is an unrivaled satellite constellation.

The V2 satellites that we fly today on Falcon deliver 96 gigabits per second per satellite, and we fly roughly 27 satellites per launch. But the V3 satellites we're about to fly in the back half of this year are a huge step function in capability. In fact, per launch on a Falcon today with the V2 satellite to the Version 3 satellites, it's a 20x improvement related to the capacity per launch with Version 3.

And in fact, that translates into, with 60 satellites flying per launch on Starship and each of them delivering roughly 1 terabit per second, that we will be able to fly 61 terabits per second of downlink capability per launch of Starship coming up here. What that quickly translates into is, after 20 launches of Starship, we will be launching 1.2 petabytes of capacity per year. When you start talking about in petabytes, you start actually looking at the Starlink network as a percentage of global Internet traffic.

It's also important to note that because of the fact that we're delivering from space, we're able to deliver in many areas and in many cases where terrestrial just can't deliver, whether it's low-density populated areas, whether it's very remote areas, whether it's in very challenging topography where you just couldn't handle it from a terrestrial perspective, or on the mobility side, in the air, on the ocean. And we've been able to demonstrate over and over again being able to bring capabilities in services and communication to areas in a disaster zone.

We have the world's largest satellite Internet network, roughly over 9,600 satellites. You look at all the others combined, and they're a fraction of what our constellation is. We're actually representing 75% of all active maneuverable satellites in orbit at this point.

And our user base is significantly expanding. So we ended 2024 with roughly 4.4 million users. End of last year, we had roughly doubled year-over-year the number of users to roughly 8.9 million. And now as of the end of Q1, approximately 10.3 million users on our network. Over 100% year-over-year growth. Over 164 countries/territories, that represents over 3 billion people, being covered by our network. And as more and more companies and industries look to resiliency and reliability as critical capabilities, you're starting to see Starlink being brought in as either the primary or at least the backup solution in a lot of the fixed side as well.

Aviation specifically I have to call out because there's a tremendous amount of traction. You see an announcement almost every week now related to another airline talking about Starlink adoption. And then also on the government side of the business, delivering Starshield capabilities, a whole separate constellation, for the U.S. government. Again, resiliency being critical here in delivering core capabilities.

And then the other piece of our very diversified connectivity offering is direct-to-the-handset. So direct-to-device, we started out with our Gen 1 solution, which was really a proof of concept. We flew 650 satellites, turned on the service with 30 different mobile network operators around the world, the largest being T-Mobile in the United States. Have coverage now for 1.9 billion people, and have proved that there's certainly a demand and excitement about having this capability.

We now are in work to fly our Gen 2. This is full 5G quality to your phone. I think this will be the transformational unlock of connecting the other 3 billion people on the planet that had really been left out from the digital divide.

And then lastly, our AI business. It is really exciting to talk about where we're at from an AI perspective. Because this is again following that same, repeatable business model that I talked about, leveraging that unrivaled launch capability. We looked at following down the same path that we had done with the other businesses and really owning the full value chain all the way to the end customer; what made the most sense is for us to have our own frontier model and be able to capture all of that value. And so that's exactly what we did.

We now have the world's largest coherent supercomputer with the Colossus 2 data center that we stood up with best-in-class compute GB300 specifically from NVIDIA. We have the first gigawatt-scale training cluster, the first gigawatt-scale Megapack battery installation there as well, and first to deploy the GB200 and 300s at significant scale. And so having a gigawatt of nameplate compute draw is really compelling for us.

But certainly, I want to talk about the orbital AI compute that's coming in the next couple of years because this seems to be the future of AI infrastructure. And this is the clean energy solution. This is the solution that really addresses some of the concerns related to AI data centers popping up. The distribution capability that others may think is the constraint related to this, we've already demonstrated with our Starlink network today.

And having, in essence, no operating cost, because you're leveraging the power of the sun, and cooling, it's radiative cooling off the satellite, makes this readily available and incredibly cost efficient. And so we are ramping up this capability right now, and in essence leveraging a ton of capability that we already have in place, whether it's the ion propulsion thrusters, whether it's the inter-satellite laser links between the satellites or the flight computer or reaction wheels. Again, a lot of technology that otherwise would be blockers to doing this in the near term, we have in place. It's why we feel like we are the only company that can do this in any meaningful time frame.

And what matters related to AI infrastructure is really creating that business model where if you start at the very top and leverage that connectivity capability that we have to drive that infrastructure advantage for us, we then get to go right into the cycle of leveraging that, driving improved quality of intelligence, and lowering the cost at the same time of our token cost, monetizing that and driving that reinvestment back into that cycle of infrastructure.

We've certainly demonstrated our capability to go monetize this infrastructure with key partners in the industry. For example, we signed a deal with Anthropic just recently to give them access and host their model on our data center, while at the same time allowing us to make investments in our own model, with an example of that being the deal that we announced with Cursor related to improving our own coding capability on our compute resources. So continuing down the path of monetization and leveraging our, what we believe is best-in-class in the industry, deployment of cutting-edge compute, and at the same time continuing to invest in our own models to even further that monetization in the future.

I would be remiss if I didn't talk about the fact that we believe one of our differentiators related to our models is certainly the fact that we are designing them as advanced truth-seeking AI from the very beginning. It's certainly one of the reasons that Elon got into the AI business to begin with, is to have that really truth-seeking model.

We certainly are also going to leverage the X platform that we have in place now, that really brings us real-time information. Real-time data is, I think, critical at all times, and I don't know that there's a better place to get real-time data than on X.

So our growth strategy starts with space, increasing our launch payloads, getting to full reusability from Starship perspective and certainly over time opens up whole new markets in the space industry. But what it immediately does is it enables our connectivity business to grow meaningfully, and now AI as well, where it's not just growth of our own platform on the infrastructure side, it also allows us to start hosting others and building out that piece of our AI business model.

So there's almost $6 trillion of available market that we're going after, really in 3 pieces. We are moving faster and cheaper than others in the industry even related to deploying terrestrial compute. And we think over time, the enterprise AI market is massive. So an incredibly large total addressable market that we're going after, over $28 trillion.

Not only are we positioned for those markets today, but I think it's exciting to talk about where some of the future growth beyond that really is even happening. And certainly, when you start talking about space, we start to talk about point-to-point transportation terrestrially, manufacturing or productivity, potentially asteroid mining in the future.

And I think very exciting also is the lunar economy. The fact that we're on track in the next couple of years to put boots back on the moon, being able to build out sustainable capabilities on the moon, I think in the years to come will be a tremendous unlock for, really, for humanity.

We feel like we've had a stellar track record already related to capital allocation and value creation. If you look at even in the life of the company from a space and connectivity business, the fact that we really only raised $9 billion and have created the business that we now have today, with last year alone generating $7.8 billion in positive adjusted EBITDA while also investing for the future with another $3.6 billion of R&D just last year alone, I think clearly we have demonstrated both on the capital allocation side and value creation that this is what we're all about.

And what that means from a financial perspective on top line, revenue has continued to grow meaningfully year after year after year. In fact, in '25 alone, over 30% growth year-over-year, just as we were starting to ramp, in essence, in the connectivity business. In generating that roughly $19 billion in revenue, also generated almost $7 billion in positive adjusted EBITDA just last year alone. And then in the connectivity business portion, you can see the significant step-up, where we grew roughly 50% in 2025 year-over-year.

And then as far as building the infrastructure of the future, that typically takes capital. And so we are not alone in investing meaningfully in CapEx, especially in the AI side of the business now. And that's been the lion's share of the CapEx deployment for the last 2 years now that we have consolidated in our AI business into the fold here, where just last year alone, roughly $21 billion of CapEx, but a large percentage of that was for AI. And you're already seeing us monetizing a decent amount of that with the hosting deal that we just announced on the Anthropic side.

And then on the financials for Q1, we delivered roughly $5 billion of top line just in the first quarter. The connectivity segment alone was a highlight with roughly $3 billion of that revenue just in Q1. But if you look at where we think we will be in the longer term, our future model, we think that our revenue growth will be even significantly higher than that year-over-year. We think our gross margins are more like 70%, and that our GAAP net income margin is more like 45%. And so we're very excited about where we're ramping into related to the profitability of the business and yet the significant growth that we believe we're marching towards.

And so lastly, why do we think we're going to win? I think it starts, first and foremost, with our global leadership position in orbital launch services. We have an unrivaled satellite and connectivity platform that really leverages vertical integration from design, manufacturing, deployment and operations, and now really truth-seeking AI models enhanced by real-time data from our X platform. That extreme vertical integration really enables high-velocity and superior cost efficiency at scale.

And really, the business models are incredibly difficult to replicate, right? Because of the fact that at the core, you first have to have that global leadership position in orbital launch. And so that unique ability to scale into new trillion-dollar markets across space, connectivity and AI is certainly a reason that we think we're going to win and continue to be this mission-driven culture that is enabled by our world-class talent.

Thank you very much. I appreciate the opportunity.