Limitless: An AI Podcast

Ejaaz:
Four days. That's how long SpaceX has been a public company.

Ejaaz:
And in those four days, it's broken just about every single IPO record that there's ever been.

Ejaaz:
They blew past Amazon and Microsoft's valuation, reaching a $3 trillion valuation.

Ejaaz:
It is the fourth most valuable company in the world.

Ejaaz:
But Elon also became the world's first trillionaire. He made more money in one

Ejaaz:
day than Warren Buffett has made in his entire life. Just absolutely insane.

Ejaaz:
The stock itself, Off the price is already 50% above its IPO price,

Ejaaz:
and they've already made their first acquisition, $60 billion to acquire Cursor

Ejaaz:
to become the number one frontier AI lab

Ejaaz:
it's not all unstoppable for

Ejaaz:
SpaceX right now. Only 4% of the stock supply is available to purchase.

Ejaaz:
And the company is valued at 107x its earnings. This is the largest gap that

Ejaaz:
we've seen for any Mag 7 company or top Fortune 500 company.

Ejaaz:
And there's an aggressive unlock schedule, which we'll get on later in the episode.

Ejaaz:
But the number one question that's on my mind, and I'm sure a lot of your minds

Ejaaz:
is, is SpaceX the investment of the century? Or is this the strongest signal that we in an AI bubble.

Josh:
Well, according to Elon, it is. He just posted that they're going to have a

Josh:
trillion dollars of revenue by the end of the decade.

Josh:
That is going to be a tremendous amount of upside. And retail seems to agree.

Josh:
I was looking at this chart just before we started recording that showed over

Josh:
the last two trading sessions, retail investors bought nearly as much SpaceX

Josh:
as every other single US stock combined.

Josh:
And it's been amazing. The first day of trading, it was up, what is it, 20%?

Josh:
Second day, 20%. Third day, 5%. Today, as we're recording, this is up another 5%.

Josh:
The thing has been up only. It eclipsed a $3 trillion market cap,

Josh:
making it the fourth most valuable company in the world over Microsoft.

Josh:
I mean, look at this chart. It's crazy. We have NVIDIA, Alphabet,

Josh:
which is Google, Apple, SpaceX, and Microsoft in the top five.

Josh:
It's unbelievable that this new company comes on the scene and is immediately among the top five.

Josh:
And it has been doing really well for good reason. There's a very strong outlook

Josh:
on revenue, on guidance, on the actual company.

Josh:
But man, like you said, Ejaz, it's very expensive and there's a lot to get into

Josh:
with this as it relates to how expensive this is but it's a double-sided sword,

Josh:
because this premium that the stock has allows it to do really interesting things

Josh:
like for example purchase a company for 60 billion dollars effectively for free

Josh:
and that has some upside for the stock as well so there's a lot of really exciting

Josh:
things that have been happening with spacex it's doing well i think the answer

Josh:
that i want to give by at the end of this episode is,

Josh:
Should you be investing in this now? And what is our kind of forward outlook?

Ejaaz:
So let's get into what exactly happened. On Friday, they IPO'd 555.6 million

Ejaaz:
shares were released for trading.

Ejaaz:
That's around 4.3 to 4.7 of the entire share supply. So not that much.

Ejaaz:
And we'll get into why that might be problematic later, but at a fixed price of $135.

Ejaaz:
Now, immediately upon listing, it hit $160.

Ejaaz:
And by the end of trading on Friday, I think it was sitting just above $200.

Ejaaz:
And then like you mentioned, it's been on a subsequent run that has put it just

Ejaaz:
around 50% above its IPO $135 price.

Ejaaz:
Now, this is absolutely insane, because as I mentioned earlier,

Ejaaz:
There's a large discrepancy between what SpaceX generates as a company.

Ejaaz:
Just last year, they generated around $15 to $18 billion.

Ejaaz:
Now, it's positioned above Amazon and Microsoft, but above Amazon,

Ejaaz:
which comparably generated, I believe, $770 billion last year,

Ejaaz:
of which $80 billion was actual revenue that they earned.

Ejaaz:
Compare that to SpaceX, they lost $4.9 billion.

Ejaaz:
So the multiples are kind of like reaching for a moment, but it was the most

Ejaaz:
insane wealth-creating event ever.

Ejaaz:
Over 4,400 SpaceX employees became millionaires, with I think well over 100

Ejaaz:
of them earning $100 million just from this singular event.

Ejaaz:
Elon himself, as I mentioned, became the world's first trillionaire.

Ejaaz:
And of course, his wealth is mixed up in a lot of different companies.

Ejaaz:
But now SpaceX, his baby, formerly it was Tesla, has now become his main a source

Ejaaz:
of value creation. So the question in everyone's mind is, what are you going

Ejaaz:
to do with all this money?

Ejaaz:
Now, there was an option that we spoke about a few episodes ago around SpaceX

Ejaaz:
potentially acquiring this different company that will allow them to leapfrog

Ejaaz:
and become a frontier AI lab. Turns out that's exactly what Elon did.

Josh:
Yeah, it's pretty amazing how they effectively got it for free.

Josh:
When I think about acquisitions that were made, we can remember the ex-acquisition

Josh:
of Twitter at the time. Yeah. And how it was considered to be this humongous

Josh:
amount of money for 40-something billion dollars that was spent.

Josh:
Cursor just got acquired for 60 billion dollars. And we have to give congratulations

Josh:
in order first to the four co-founders who are now worth over 5.5 billion dollars each.

Josh:
Allegedly, we have a great photo, actually, of them we could show.

Josh:
Because these are these are not they're not like grown-ups these like young

Josh:
people they're in their 20s these.

Ejaaz:
Are kids they're kids and

Josh:
They're all multi-billionaires so to these four people on the screen congratulations

Josh:
you have permanently escaped the underclass for life and for probably the next

Josh:
50 generations of life you created an incredible product congratulations,

Josh:
so elon bought it and the way that they bought it was really interesting and

Josh:
also just some backstory for those that don't know cursor is that thing that

Josh:
we talk about a lot called the harness It is basically the,

Josh:
operating system, the body that will embody the Grok and the XAI and probably

Josh:
cursor models in the future.

Josh:
So cursor, incredible company, really a remarkable comeback.

Josh:
And Elon essentially was able to acquire them for free. How?

Josh:
Well, if you remember back earlier this year in April, SpaceX locked up an option

Josh:
to either pay $10 billion for a partnership or buy the whole company for $60 billion.

Josh:
At the time, SpaceX stock was not that high. It was still private.

Josh:
It was maybe sub $100 at the time or just above $100, whatever it may be.

Josh:
Fast forward to today, that stock is now worth $211. Each stock is worth so

Josh:
much more than it was at the time.

Josh:
What effectively what that means is because they're buying this in all stock,

Josh:
it allows them to basically just grant a significantly less amount of stock

Josh:
to these founders because the price is so much higher. So that option that they

Josh:
paid for earlier in the year is really paying off dividends.

Josh:
And the result is that they got a really steep discount on buying cursor because

Josh:
if they would have bought it just a couple months earlier, the price would have

Josh:
been over double effectively.

Ejaaz:
Yeah. So Elon basically bought this amazing frontier AI lab with an inflated

Ejaaz:
currency that was SpaceX stock. And the way he was able to do this was because

Ejaaz:
there's only a 4% float supply for the shares itself.

Ejaaz:
Now, I just want to talk about the option very quickly.

Ejaaz:
It was $10 billion that Cursor would pay them if they decided to not acquire Cursor.

Ejaaz:
And they had 30 days. SpaceX had 30 days from the start of the IPO to decide

Ejaaz:
whether they wanted to acquire Cursor or not for an all-star transaction or whatever that might be.

Ejaaz:
Elon exercised that within day four, or actually day three. That was yesterday.

Ejaaz:
This happened yesterday.

Ejaaz:
So he just acted very quickly. And the reason for this is it's not just Cursor's

Ejaaz:
harness on its own. So for any of you who have used Cursor, it's probably the

Ejaaz:
first product that you interacted with to start Vibe coding different types of products.

Ejaaz:
It's the thing that arguably made Vibe coding a very viral thing.

Ejaaz:
At one point, Cursor, the product itself, accounted for 40% of Anthropix coding

Ejaaz:
usage for Claude specifically. This was before Claude code became like a viral sensation itself.

Ejaaz:
So Cursor at the time, I think, was making around 1 billion ARR,

Ejaaz:
and now it's like making between 2 to 3 billion ARR.

Ejaaz:
So a really good purchase. But the point is, Elon was able to acquire it using

Ejaaz:
stock at an inflated price, which effectively makes it free. Now, get this.

Ejaaz:
$60 billion that Elon just spent to acquire this AI company is more money than

Ejaaz:
Elon spent on SpaceX for rockets over its entire lifetime.

Ejaaz:
So SpaceX, the company that was built to create rockets and effectively become

Ejaaz:
the highway to space, just spent the most amount of money acquiring an AI lab.

Ejaaz:
Now, obviously, this makes sense because they merged with XAI.

Ejaaz:
The whole idea is to put data centers out in space to train Grok,

Ejaaz:
which is contained within XAI.

Ejaaz:
Cursor has an amazing product that basically allows Grok to become a super coding

Ejaaz:
model and allow it to compete with Anthropic.

Ejaaz:
They already proved this with the recent Composer 2.5 model, which Cursor released.

Ejaaz:
And Michael Truel, the founder of Cursor, actually spoke on a panel or on a

Ejaaz:
presentation yesterday where he said

Ejaaz:
they've actually trained a foundational model that is releasing in the next

Ejaaz:
few weeks that's been trained from scratch typically cursors models have been

Ejaaz:
fine-tuned on top of a chinese model but trained from scratch and that's definitely grok itself so

Ejaaz:
tldr space is going to come up with a frontier ai model after this acquisition

Ejaaz:
released in a few weeks so it is

Ejaaz:
a huge win to acquire a company

Josh:
Like this yeah and that's not even the most interesting thing about it like

Josh:
it's amazing how many different pillars that exist with this company and i think

Josh:
one of the things you mentioned was how much money they spent and how much money they raise.

Josh:
And I want to highlight a few key numbers with the cumulative spend versus the IPO raise.

Josh:
They raised $85 billion in this IPO.

Josh:
For reference, they spent $15 billion on the entire Starship program.

Josh:
When you think about the Starlink program that is running a global constellation

Josh:
of satellites that is beaming down internet to earth with lasers,

Josh:
they spent $20 billion on that.

Josh:
The total between Starship, which is the Martian rocket that's going to go build

Josh:
this base on moon, and Starlink, the global internet provider, is $35 billion.

Josh:
They raised almost triple that in money.

Josh:
And that means that the scale and the scope of what they're going after is just

Josh:
so huge. But before we get into the grand scheme of things, we have to talk

Josh:
about the price now because that's what everyone wants to know about.

Josh:
That's what all the interest is about.

Josh:
And I think to do that, we should start with the share float,

Josh:
which is an important thing that I'm not sure a lot of people have really kind

Josh:
of focused on or are really aware of. So basically, when a company is traded,

Josh:
there are a certain amount of shares that are available to be traded on a public marketplace.

Josh:
In the case of SpaceX, this number is actually very low. It comes out to about

Josh:
4.2 to 4.3% of the total shares being actually tradable.

Josh:
What does this look like? Well, yesterday during the trading session,

Josh:
I think half 50% of all of the shares traded hands in a single trading session.

Josh:
There's not a lot of liquidity, or I shouldn't say that there's,

Josh:
there's a lot of liquidity, but there's not a lot of shares to be pushed around.

Josh:
Meaning if there is more demand, it is able to push the price higher,

Josh:
much quicker because there's less of that float that it needs to churn through.

Josh:
As a result, the stock has done very well and hasn't met much resistance.

Josh:
I mean, every day it's been seemingly up only.

Josh:
When does this change, is the question, because right now there's a very little

Josh:
amount. There's a lot of hype and demand, but there is a very clear and perhaps

Josh:
concerning unlock schedule in which that float is going to grow to be much larger than 4%.

Ejaaz:
Yeah. Listen, like I'm a SpaceX bull. I bought stock at IPO.

Ejaaz:
I will be holding this stock for a long time. I believe in Elon being able to

Ejaaz:
pull this off, but you can't ignore the mechanics.

Ejaaz:
Now, I have a visual on the screen right now. If you're listening to this, I'll explain it to you.

Ejaaz:
Right now, around 4.2% of the stock supply is available to trade.

Ejaaz:
So that's what is available on the market. That's why the price is so volatile

Ejaaz:
and is going either up or down, mainly up over the last few days.

Ejaaz:
Over the next 90 days, 4.4x, the entire current flow, so that's 2.4 billion

Ejaaz:
shares will get released onto the market in a staggered way.

Ejaaz:
And this releases from friends and family that invested earlier,

Ejaaz:
as well as early investors that such as funds or institutional funds that got

Ejaaz:
access to invest in SpaceX's earlier rounds.

Ejaaz:
Now, over 180 days, which is

Ejaaz:
basically six months, you'll have a total of 56% of the supply released.

Ejaaz:
So that is this year, by the end of this year, you have an additional 56% of

Ejaaz:
the current float that is being traded.

Ejaaz:
That is TLDR, a ton of And so the main question on everyone's mind is,

Ejaaz:
where's this money going to come from?

Ejaaz:
You need money to absorb that supply release in order to maintain the current

Ejaaz:
price that we're looking at.

Ejaaz:
So if we're looking at like, say, a $220 price per share, you're going to need

Ejaaz:
multiples more of the current money that is in the supply right now.

Ejaaz:
Just prop up that price, not even just send it higher. So the concern here is

Ejaaz:
this is a very abnormal unlock schedule.

Ejaaz:
This is not particularly normal. I'll show the step ladder over here.

Ejaaz:
Typically, when a company IPOs, they IPO around 40% to 50% of the available

Ejaaz:
supply, and then the rest unlocks after a one-year cliff. That's typically the

Ejaaz:
standard that everyone's shown.

Ejaaz:
With Elon's IPO, with the SpaceX IPO, everything has pretty much changed.

Ejaaz:
For the unlock schedule, it happens a lot sooner and a lot more frequently.

Ejaaz:
Equally on the buy side of things, and I think this is important to point out,

Ejaaz:
Elon has been able to wrangle a very effective,

Ejaaz:
call it a scheme, where you have a lot of the pension funds,

Ejaaz:
the S&P 500 purchases, the people that buy these indexes from pension funds

Ejaaz:
and other sort of instruments that will have this constant buying pressure on SpaceX's IPO.

Ejaaz:
So the balance of these two will effectively determine what that ultimate price is going to be.

Ejaaz:
But right now, it's looking pretty intimidating.

Josh:
Yeah, well, to say that it needs to absorb the sell pressure is implying that

Josh:
there will be sell pressure. And I think it's also important to know who the

Josh:
people are who are currently locked up.

Josh:
If your shares are locked up, you are an insider, you are early in SpaceX, you are in the green.

Josh:
So there's a high probability that there is some sort of incentive and urge

Josh:
to want to sell to take your money off the table.

Josh:
And by December 9th of this year, about 60% of all the shares will become available,

Josh:
with the remaining 50% or 40% being available in June of 2027.

Josh:
So there is a very clear projected path to a lot of potential sell pressure.

Josh:
Now, I think it's important to note the types of people that are invested in

Josh:
SpaceX and the people that share the vision of SpaceX being very bullish and very long term.

Josh:
A lot of these investors invested in Elon, the founder, they invested in SpaceX,

Josh:
the deca trillion dollar company, not the two to three trillion dollar company.

Josh:
So while there is going to be selling pressure, there's certainly a case to

Josh:
be made that a lot of these early supporters still believe that they're early

Josh:
and are using this as an option to just continue to hold to not sell so while

Josh:
there will be sell pressure it is not necessarily going to be

Josh:
a bad thing it is possible not necessarily and elon seems to be fueling this

Josh:
fire he just posted a few days ago that spacex might be able to reach approximately

Josh:
one trillion dollars in revenue,

Josh:
by 2030. And he would be surprised if it were not above $1 trillion by 2031.

Josh:
A trillion dollars in revenue is unheard of.

Josh:
No one makes a trillion dollars in revenue. If SpaceX just trades at 10 times

Josh:
their revenue, they're trading at a $10 trillion valuation. That gets you there in four years.

Josh:
So there is this very clear bull case based on these pillars that they have

Josh:
between Starlink and Starship and selling their AI compute and just owning their

Josh:
own AI infrastructure through the acquisition of cursor and through

Josh:
their data centers that they have that makes it incredibly compelling for people who

Josh:
maybe if you're investing over the next six months could be rocky but that like

Josh:
multi-year trajectory still seems to be like very optimistic and very bullish.

Ejaaz:
Yeah yes and no like i do want to try and like ground it a little bit which

Ejaaz:
is like okay like let's go back to this chart right effectively on like day

Ejaaz:
one you've got around like 3.7 billion dollars worth of sell pressure.

Ejaaz:
This is like after that initial 90-day period, right?

Ejaaz:
These guys, these early investors that you mentioned, I agree are long-term

Ejaaz:
holders, but they're also up over 100x.

Ejaaz:
If you're up over 100x, you're probably cashing some of this out.

Ejaaz:
Now, there are ways that they would cash this out. Maybe they don't sell the equity itself.

Ejaaz:
Maybe they borrow against it. There's loads of fancy ways to manage your wealth in that way.

Ejaaz:
And these people will probably exercise some version of that.

Ejaaz:
But I do think there will be some form of sell pressure. And then the main question,

Ejaaz:
therefore, on my mind is, is there enough hands to exchange that?

Ejaaz:
Now, initially, I think actually there will be.

Ejaaz:
I think there's a lot of retail demand for this thing. I think there was something

Ejaaz:
like $250 billion worth of purchasing power from retail alone,

Ejaaz:
just through the likes of Robinhood and all the retail trading accounts from banks on day one.

Ejaaz:
So there's that. And then there's also the constant buying pressure from

Ejaaz:
The institutions that buy S&P 500 indexes and stuff like that.

Ejaaz:
So I think it'll balance out eventually, but there is an abnormal amount of

Ejaaz:
potential selling pressure that will come from some of these early investors.

Ejaaz:
And I don't think it's as easy as saying like all of them are going to hold

Ejaaz:
when they're up like massively. So I just want to kind of like put that out

Ejaaz:
there. I'm not a bear in any way, but there are some contingency plans that

Ejaaz:
probably need to be made.

Josh:
Well, okay, that's fair. so in six months from now i guess we could look at

Josh:
this like there's two types of investors maybe we could address here the the

Josh:
shorter term traders that are looking to make money before the end of the year

Josh:
and then there's the longer term traders that are looking on a five to ten year,

Josh:
kind of scope so for the six month traders for the people that want to buy a

Josh:
really nice gift for christmas maybe buy a brand new performance tesla tax should they buy yeah yeah,

Josh:
should they buy spacex stock in order to get there do we think it's going to

Josh:
be a bullish a positive six months.

Ejaaz:
Yeah honestly i think there's so much demand for this thing that people will

Ejaaz:
just buy it anyway, because the people that are buying it now are probably there

Ejaaz:
for the long term, they know that they weren't able to get involved in like

Ejaaz:
some of the private deals.

Ejaaz:
I also think people are going to be staring at the unlock schedules.

Ejaaz:
And they're going to think, hmm, okay, I've got until this time until this amount

Ejaaz:
unlocks, I'll play the game up until there.

Ejaaz:
So I think more of the short term minded things that maybe want to make a trade

Ejaaz:
and like, be able to afford a Tesla by buying SpaceX stock probably have a good odds of doing that.

Josh:
And then you have to assume that the unlock schedule may get front run.

Josh:
People are all aware of it. Everyone's watching these dates.

Josh:
It's going to be an interesting game theory dynamic applied to that,

Josh:
but it seems like things are pretty stable. I mean, this is very expensive.

Josh:
I could very easily see a world in which it trades somewhat near the IPO price,

Josh:
like sub 200 for, for a while, while it just kind of clears through insurance

Josh:
that, but the longer term, like someone who wants to own this through 2030,

Josh:
say for the next four years, what do you think about that?

Ejaaz:
Oh i mean it's the same thesis that i would have with my investment which is

Ejaaz:
like i think overall spacex will be up but again

Ejaaz:
it it not everyone can hold through volatility right like if you see if you're

Ejaaz:
an amazon holder right let's let's take the company that spacex literally just

Ejaaz:
surpassed on day two right um

Ejaaz:
if you've been holding it for the last three years you've been in utter hell

Ejaaz:
right uh but the idea is if you look at amazon's fundamentals it is absolutely

Ejaaz:
killing it way more than SpaceX, right?

Ejaaz:
I mentioned earlier, $700 billion last year in revenue, and they made about

Ejaaz:
$80 billion of actual profit off of that. SpaceX comparably made a fraction

Ejaaz:
of that and had a net loss, right?

Ejaaz:
So the fundamentals don't really make sense, but the people who held Amazon

Ejaaz:
is currently down more than the people who bought SpaceX on day one.

Ejaaz:
So that kind of dichotomy is kind of crazy to understand. And maybe it's just

Ejaaz:
up to market dynamics and public interpretation.

Ejaaz:
But that being said, if you're on a long term, if you're looking at fundamentals,

Ejaaz:
if you believe that SpaceX will bring the cost of traveling out to space to

Ejaaz:
200K per launch, then it's an easy bet. It's a long-term hold.

Ejaaz:
But it's whether you can handle the volatility.

Josh:
That's the main thing. That's kind of the advice that I've been giving to friends.

Josh:
A lot of people have been reaching out and asking like, hey,

Josh:
what do you think about SpaceX stock? And I tell them, if you are comfortable...

Josh:
Investing long-term and just putting your money away and slowly building a position

Josh:
or quickly building a position in a company that you believe in,

Josh:
then it's a great investment, a remarkable investment even.

Josh:
Because I mean, companies at the scale continue to do pretty well.

Josh:
And when you think about the companies at the scale and who they're run by,

Josh:
there's, there's none with the more cracked engineering team,

Josh:
leadership team, entrepreneurship team, then SpaceX. When you look at these

Josh:
top five, it's like Microsoft.

Josh:
Are you really more bullish on Microsoft than SpaceX, even though they're priced

Josh:
the same? Like when you look at Microsoft, what they're working on.

Ejaaz:
Like Boomer Tech, Josh, you know this now.

Josh:
Yeah, it's like, really when you look at these companies, which companies are

Josh:
going to change the world five years from now and which companies are not?

Josh:
And if I'm just comparing based on market caps, the answer is certainly not

Josh:
Microsoft. It looks a lot more like SpaceX. And there's a chart that I wanted to show.

Josh:
It looks a little funky on the screen share. You're gonna have to work with me here.

Josh:
But basically there is this presentation by this guy named Thomas LaFont. He's an investor.

Josh:
I saw this on the All In podcast where he was talking about the probability

Josh:
of a company continuing to do well once they reach a certain valuation.

Josh:
So in the case of a unicorn, the odds of a unicorn going from a $1 billion company

Josh:
to a decacorn, a $10 billion company is 8%.

Josh:
It's possible, but not probable.

Josh:
The same doubles in the case that a decacorn goes to a centacorn.

Josh:
So if a company is worth $10 billion, the odds of it going to $100 billion, a 10x multiple.

Josh:
Go from 8% to 13%. And then from Decacorn, which is 10 billion to a hundred

Josh:
billion, Ascenticorn, they almost triple and 30%.

Josh:
So one in three companies who reach $10 billion will make it to a hundred billion

Josh:
dollars. And you could see how this chart kind of trends in a very clear trajectory

Josh:
where it's nearly exponential.

Josh:
And you have to assume if a company can reach a trillion dollars in market cap,

Josh:
the probability of it hitting a decatrillion dollars is probably double it's

Josh:
at least 60 so that means over one in every two companies that have hit

Josh:
one trillion dollars in value are likely to hit 10 trillion dollars in value

Josh:
and when you look at the companies that are centicorns today is that what they're called like

Josh:
trillion dollar companies there's not a ton of them and when you look at the

Josh:
ones that do exist the ones that are most interesting that are most compelling

Josh:
to look forward to in terms of

Josh:
products that they're going to make are companies like spacex are companies

Josh:
like tesla who are going to revolutionize what the physical world looks like

Josh:
in a way that we've never seen before.

Josh:
And that's why I'm particularly excited. That's why I am recommending to my

Josh:
friends like, hey, not financial advice, but I'm very bullish.

Josh:
I'm all in on this company for the next, however, pretty much an infinite amount

Josh:
of time until things change.

Josh:
And that's kind of the reasoning is there's just a high probability that the

Josh:
success they've had will continue.

Ejaaz:
I think with a lot of these companies, it's also

Ejaaz:
So it's just time-based, and it's based on whether they're going to execute on the entire vision.

Ejaaz:
Like, a lot of us don't actually accurately predict what the world's going to

Ejaaz:
look like six months from now.

Ejaaz:
Like, who knows? Like, we could have AI models that cost a fraction of what

Ejaaz:
they do today that are frontier that would undercut Anthropic and OpenAI and

Ejaaz:
would kind of blow this entire AI bubble up. There's so many different moving factors.

Ejaaz:
Now, with Elon specifically, and I'm talking about Elon and his company,

Ejaaz:
so not just SpaceX, but we're talking about Tesla,

Ejaaz:
they have a huge collective vision to not only build out the number one AI company

Ejaaz:
and AI model, but to also own the infrastructure and highway to space, as well as the

Ejaaz:
world's largest gigafab chip fab on earth,

Ejaaz:
as well as manage all the humanoid robotic side of things as well,

Ejaaz:
the physical manifestation of AI.

Ejaaz:
Now, those are kind of vaguely the correct ambitions to kind of carve out what

Ejaaz:
the world's going to look like in the future.

Ejaaz:
Now, can one man pull it off between two or three companies?

Ejaaz:
That remains to be seen. His track record so far has proven that he is able

Ejaaz:
to scale hardware from zero to one.

Ejaaz:
He has yet to prove it with software specifically. And this cursor acquisition,

Ejaaz:
I believe, is going to be a good test of that.

Ejaaz:
And then following that, it's whether he is able to merge all of these together.

Ejaaz:
A lot of that is going to be based on time. And so unfortunately or fortunately,

Ejaaz:
a lot of this is going to be speculation. It's going to be hearsay until we actually see the goods.

Ejaaz:
And we're not going to see some of the goods until as early as maybe a few weeks

Ejaaz:
for the new crop model, but a few years in terms of space travel,

Ejaaz:
putting AI data centers in space, and training frontier models for a fraction of the cost.

Ejaaz:
So it's going to be a time thing. If you're patient, if you're a long-term investor,

Ejaaz:
then buying SpaceX stock at any price right now kind of makes sense.

Ejaaz:
But if you want to

Ejaaz:
I'm not again, not investment advice, but the way that I would kind of like

Ejaaz:
approach this is just kind of like purchasing chunks over time over the next

Ejaaz:
six months, there will be again, 54% of the supply to 54 to 60% of the supply

Ejaaz:
unlocked by the end of the year.

Ejaaz:
That's a lot of supply, there'll be a lot of volatility.

Ejaaz:
Right now we've seen the volatility go up for the price, but it'll equally go

Ejaaz:
down as well is my expectation. So just be careful out there and you know,

Ejaaz:
make sound decisions. That's it.

Josh:
Yeah, I'm gonna be hyperbolic again, like I have been and just continue to say

Josh:
that Tesla and SpaceX will be the most valuable company in the world.

Josh:
It's like, I'm looking at this list right now and there's NVIDIA,

Josh:
Google, Apple, Microsoft, Amazon, SpaceX, TSMC, Broadcom, Saudi Aramco, Samsung, and Tesla.

Josh:
And when you think about those companies and the products they're going to make

Josh:
and the future trajectory of them, none of them are even close to one,

Josh:
the operational capability in the terms of like physical hardware.

Josh:
And then two, just in terms of leadership and what the people have actually

Josh:
been able to accomplish.

Josh:
And when you consider a world in which SpaceX and Tesla get rolled into a single

Josh:
entity, and those are competing against NVIDIA, who's currently the most valuable

Josh:
company in the world, it's like, come on, there's, it's like not even close.

Josh:
And a $10 trillion valuation in that world seems bearish.

Josh:
I'm like, 10 trillion? Dude, they're going to hit a trillion dollars in revenue

Josh:
just with one of those two companies four years from now.

Josh:
If it's trading at 100 times the revenue, that's like, I mean,

Josh:
the numbers get pretty large really quick.

Josh:
And I think this is an important thing to note that this has happened many times

Josh:
in the past. I mentioned Saudi Aramco currently sitting at number nine.

Josh:
At one point in time, it was the most valuable company in the world by far.

Josh:
And that was the ceiling of the perceived market caps that a company could reach.

Josh:
It's like, okay, Saudi Aramco is number one. Let's say Apple,

Josh:
for example, surely Apple can't be worth more than Saudi Aramco.

Josh:
They make oil, they power all the energy of the world.

Josh:
The reality is that Apple released the iPhone, Apple became the new most valuable

Josh:
company in the world, and they quadrupled Saudi Aramco.

Josh:
And the perceived ceiling of what these companies are able to reach in terms

Josh:
of market cap continues to go up as they continue to unlock new value in the world.

Josh:
And what company is more likely to unlock more value than one that is exploring

Josh:
both domestically, but also interstellarly?

Josh:
And I know it's just it's an exciting company to bet around.

Josh:
There is an incredibly compelling case for a really fun and very valuable future

Josh:
when these plans work out.

Josh:
And there's no team better equipped to actually execute on that vision.

Josh:
And that's why I cannot recommend SpaceX enough to all of my friends.

Josh:
Again, not financial advice, but like, holy shit, this is the best chance you

Josh:
have as we go into this like next generation of just like humanity in general

Josh:
reality. It's very exciting. Clearly, I'm excited. Clearly, I'm a big fan.

Josh:
I'm sure people disagree with a lot of these takes, but hey,

Josh:
come catch me in five years, buddy.

Ejaaz:
Yeah, I mean, I'm going to take not the other side of that, but I'm just going

Ejaaz:
to point out that there are names on this chart that haven't IPO'd yet.

Ejaaz:
You're going to have Anthropic. I see OpenAI is on here, but you're going to

Ejaaz:
have a ton of other Frontier AI labs that IPO soon.

Ejaaz:
Google is nowhere to be seen here, and they are currently the only vertically

Ejaaz:
integrated company that absolutely nailed distribution and the infrastructure

Ejaaz:
play itself. I think that is very slept on.

Ejaaz:
And then NVIDIA itself, I think a lot of people are counting NVIDIA as just

Ejaaz:
the GPU company, but hey, Jensen's already released his CPU line,

Ejaaz:
which he said he was never going to enter, and now he has, and now it's earning

Ejaaz:
$20 billion of revenue a year.

Ejaaz:
He's already working on the battle-tested, space-proof GPUs that he's going

Ejaaz:
to be putting in Elon's rockets to get out there. So I think there's going to

Ejaaz:
be some competitors in the future.

Ejaaz:
And it's just a matter of keeping an eye of what is going on and how it's all being executed.

Ejaaz:
Again, I think Elon is one of the best executors in the world right now.

Ejaaz:
So very bullish for all his companies.

Ejaaz:
But there'll be some competition. I don't think it'll be a clear road.

Ejaaz:
But ultimately, up only, I think.

Josh:
Yeah, well, I mean, definitely no competition in space. Blue Origin is the next

Josh:
closest. And they got a decade of cash enough to do, especially after that most recent rocket blew up.

Josh:
So in that world, at least they got their monopoly for a good bit of time.

Josh:
But I think that the consensus is generally like all of these companies are pretty remarkable.

Josh:
Like when you look at NVIDIA, Google, Apple, like there's a very clear case

Josh:
that they're going to continue to make more money as this world of abundance gets unlocked with AI.

Josh:
And there's a good chance that everything just continues to go up.

Josh:
And maybe there's certainly going to be some bumps along the way.

Josh:
But the value generation created by these companies is really staggering.

Josh:
So I think that's the update.

Josh:
That is the post SpaceX IPO clarity, perhaps. I'm serious.

Josh:
That's everything that's worth knowing. That's everything...

Josh:
I think that's been going on in

Josh:
the last week. Is there any final updates before we let everyone go here?

Ejaaz:
No, I'm excited about the new Grok model.

Ejaaz:
You know, speaking transparently, Grok has kind of fallen behind pretty massively.

Ejaaz:
And I believe like Anthropoc and OpenAI have pretty much reached escape velocity

Ejaaz:
with Fable 5 and the upcoming GPT 5.6 model.

Ejaaz:
Oh, I hope that comes soon. I know. And these models are effectively building

Ejaaz:
themselves. So once you have a model that builds itself, you know,

Ejaaz:
you kind of like run away with it. you run away with the trophy.

Ejaaz:
Grok is probably, or SpaceX AI, is probably the only company left that could

Ejaaz:
potentially join the ranks.

Ejaaz:
And they're going to do it via the curse acquisition. So I'm excited to try that model out.

Ejaaz:
For those of you who are listening to this, to Josh's relentless bullishness,

Ejaaz:
to my sobriety test, are we wrong?

Josh:
Who's wrong?

Ejaaz:
Who's right here? Come at us. Let's hear you in the comments.

Ejaaz:
Tell us if we're wrong. If you're out there and you're an absolute Elon hater

Ejaaz:
we also love and want to hear your feedback right um if you've listened to this

Ejaaz:
if you're listening to this on youtube if you listen to this on spotify apple

Ejaaz:
music wherever you're listening to it

Ejaaz:
please make sure you subscribe or that you're following us please give us a

Ejaaz:
rating however way you feel about us it helps us out pretty massively leave

Ejaaz:
us a comment as well you can do it on spotify as well um

Ejaaz:
and we have a newsletter where we post twice a week we almost have a hundred

Ejaaz:
thousand of you we post a long form essay which is like a thesis it's going out

Ejaaz:
uh today as you're listening to this episode, as well as weekly highlights at the end of the week.

Ejaaz:
But aside from that, that is all. And we will see you for our roundup.

Josh:
See you guys so much for watching. We'll see you guys next time. See you.