Musk and SpaceX
1) On Substack, Dan Gardner wrote:
There is a bizarre bifurcation in public discourse when the subject is Elon Musk.
Elon Musk the businessman? That’s one discourse.
Elon Musk, the compulsive tweeter with blatantly racist views, a habit of fomenting violence in countries whose immigration policies he dislikes, and an unnerving enthusiasm for far-right political parties in European countries he seems quite keen on keeping white? That’s an entirely separate discourse.
They’re the same person. It is absurd and indefensible to compartmentalize the two Elons.
I disagree. Compartmentalizing is something we do all the time in our historical assessments of individuals. Whatever you think about Musk’s politics, they can be judged separately from his entrepreneurial activities. Henry Ford is an obvious point of comparison. His loathsome political views shouldn’t prevent acknowledgement of his massive contribution to human prosperity. In another domain, I can still appreciate Wagner operas, Degas paintings, and the poetry of Ezra Pound and T.S. Eliot while knowing that all were blatant antisemites. It’s early to know how much Musk — and the people he’s brought into his companies — will eventually have contributed to human progress, but there’s a good chance it will be on the Ford scale or more.
2) Following are three articles making pretty much the same point in different ways -- SpaceX’s huge valuation is essentially a bet on the long-term economic exploitation of space:
But in valuing the company at such stratospheric heights, investors are looking well beyond SpaceX’s existing rocket and satellite businesses. As artificial intelligence drives demand for enormous amounts of energy and computing power, the company is positioned to turn low-Earth orbit into usable commercial real estate. This includes the possibility of putting data centers in space, powered by nonstop solar energy and free from the resource constraints and permitting fights that increasingly complicate such projects back home. It could also mean relocating more of Earth’s industrial and manufacturing processes into space, where the unique conditions of microgravity enable new materials, pharmaceuticals, and production methods that are difficult or impossible to achieve here.
In this sense, the IPO is a wager on a new kind of frontier. In the nineteenth century, railroads opened the western frontier. In the late twentieth century, the internet opened a digital one. SpaceX represents the opening of a new frontier beyond Earth, with the potential for vast benefits to humanity.
https://www.city-journal.org/article/spacex-ipo-valuation-stock
3) Stephen McBride of the Rational Optimist Society is most excited by the prospect of data centers in space, which he sees as the next true money-making venture for SpaceX, after the already successful Starlink enterprise, given its tight connection to the inexorable expansion of AI tools:
A data center on Earth is just a building full of computer chips that turns electricity into intelligence. Trouble is the biggest data centers now gulp as much power as a mid-sized US city. And we’re trying to build hundreds of them at once.
If you want to plug in a big new data center today the utility company tells you to get in line until 2028. Finished data centers are sitting dark because they can’t get a wire to the grid.
Going to space solves the power problem.
By having solar panels ride the line around Earth that divides day and night… the sun never sets on them. A panel in orbit harvests 5X to 8X the energy of the same panel in Arizona. No expensive batteries needed.
Having no electricity bill is the holy grail for a system that turns electricity into thought.By the way, when you picture data centers in space, are you picturing giant warehouses floating up there? That’s not what they’ll look like.
In space, orbital data centers will be sleek and minimal. Picture a Starlink satellite with a GPU, solar panel, and radiator attached. No building. No power lines. Just the chip, the thing that feeds it sunlight, and the thing that keeps it cool.Then there’s the other P: politics.
Local governments rejected two data centers in 2023. In 2025 they rejected 50. They’ve already rejected more in the first three months of 2026 than all of last year. Maine just became the first state to ban large data centers.
We’ve seen this movie before and we know how it ends. A small group of activists can strangle a world-changing technology in its crib.
They did it to nuclear power and supersonic flight.
But luckily for AI
There are no NIMBYs in space.
4) Want to get more technical? Then this article from the great Samir Varma is for you. In it, he shows that the success equation for data centers in space is not about cooling, or even launch costs, but depends on how fast computer chips obsolesce and need to be upgraded, i.e., how fast Moore’s law will decelerate, and also on how difficult it will be to provide electricity at a competitive cost on the ground (Warning -- Equations Ahead):
The critics are wrong: the heat can be rejected, the radiator is 3.3 tonnes, and “you can’t cool it in space” — though space is indeed a worse radiator — is not the argument that decides anything. They reached a reasonable instinct through the wrong variable.
Musk is right about the parts he’s loud about: heat is manageable, a single launch is competitive at projected Starship prices, and — once you account for the fact that you demote old chips rather than discard them — there’s an optimal way to operate an orbital fleet that becomes launch-and-electricity competitive with the ground in this toy model, at the optimistic end of his own launch-cost projections. He is not being stupid. Run the numbers his way, generously, and there’s a real case in there — one that still has to cover the spacecraft and servicing costs the model leaves out, but a real case.
But it lives in a specific corner, and the corner is defined by two numbers that are neither thermal nor propulsive. The first is launch price: the case looks interesting near $100/kg and becomes uncomfortable by $300/kg — where the launch-only figure already reaches the top of the ground build-plus-electricity band before orbital hardware and servicing costs are counted — and SpaceX has not yet flown anything at either price. The second is subtler and, I think, the actual crux: the pace of semiconductor improvement. The whole optimization turns on how fast orbital chips fall behind the frontier. If performance per watt keeps doubling slowly — every four or five years, as the leading edge arguably trends — old chips stay useful longer, the optimal refresh stretches out, and orbit looks good. If improvement reaccelerates to the historical two-year pace, the optimum tightens, the relaunch term comes roaring back, and the ground wins comfortably.
So an orbital data center is not a cooling bet. It’s barely a launch bet. It is, underneath everything, a bet that Moore’s law stays slow — that the chips you lift won’t be embarrassed too quickly by the ones you didn’t. That’s the number to watch. Not the temperature of space, and not even the price of a rocket. The rate at which silicon improves.
5) Noah Millman is more skeptical on the valuation exercise because of the intrinsic difficulty of arriving at valuations in the presence of “real business options,” which are “impossible to value” because of massive uncertainty about the future courses of technology and politics:
Buying SpaceX shares was never something I was likely to do. I understand the perspectives of the enthusiastic, the skeptical and the outraged, but I recognize that my inclination toward the skeptical camp is substantially personality-driven. I’m just congenitally skeptical. But I think one thing all three camps may not be acknowledging as fully as they should is the degree to which pricing a company like SpaceX is genuinely extremely difficult because to such a considerable degree what drives its value is a portfolio of real business options, which are inherently difficult to value. That doesn’t usually matter because real business options are usually only marginal factors in valuing a large company like SpaceX. But we’ve entered a world where there are real business options of plausibly extraordinary value, and that world is just genuinely very weird.
What do I mean by a real business option? An option gives the holder the right but not the obligation to do something in the future. A real business option is some aspect of a business that gives the owner the ability to enter another business that might not be available—or might be much more expensive—without already being in the prior business. For example, if you build a business with a deep customer base of, say, plumbers, you now have the option of selling other products to that customer base, while it would cost a new business some amount of money to acquire that customer base. The more difficult it is to acquire that customer base, the more valuable the array of products that could be sold to them, and the simpler it is to plug in those additional products into the pipeline, the more valuable the real business option is. In extreme cases, the option could be worth so much that it makes sense to build the initial business as a loss-leader simply to acquire the customer base.
Noah then explains what options are built into the SpaceX package.
6) Of course, all this sound and fury is not just about the technology aspects of SpaceX or even just about Musk’s personality or politics. The sheer existence of a trillionaire -- and the expanding number of billionaires -- is itself enough to set off an explosion of anger, resentment, and discontent in left and right populist circles, as John Aziz explores. Here’s an angle that hadn’t occurred to me:
I don’t really take this political posturing so seriously.
Elon is the first trillionaire, but he’s extremely unlikely to be the last.
In fact, depending on how you define wealth, he may not even be the first person on Earth with access to trillion-dollar-scale resources.
Because if we are talking about private market wealth—equity stakes, liquid securities, company valuations—then yes, Musk crossing the trillion-dollar threshold is unprecedented. It is a new category of individual balance sheet power.But if we are talking about control over assets, then the world has already had near-trillionaire and trillionaire-adjacent figures for a long time. Two of the richest are from the Middle East.
Mohammed bin Salman effectively sits atop a Saudi state-capitalist machine of almost absurd scale. The Saudi Public Investment Fund alone reports more than $900 billion in assets under management. Then layer on Aramco: a publicly traded oil giant with a market capitalisation of roughly $1.6–$1.8 trillion depending on the share price, and still overwhelmingly controlled by the Saudi state. Mohammed bin Zayed and the Abu Dhabi ruling structure operate in a similar universe. Abu Dhabi’s sovereign wealth ecosystem is estimated to manage more than $1.8 trillion collectively.
So, frankly, whether or not Elon Musk is the world’s first trillionaire is rather open to debate. There are also some other dark horse candidates from authoritarian states—think Vladimir Putin—who may have amassed tremendous wealth in the shadows.
