This podcast segment, recorded before SpaceX's Q2 earnings call, highlights several key updates and insights regarding SpaceX's business pillars, particularly its AI models and the burgeoning AI compute business, contrasting market perceptions with internal projections.
**Key News and Information:**
1. **SpaceX Stock Performance Post-Lockup:** Contrary to predictions of a "bloodbath" due to insider lockup expiry, SpaceX stock was reported to be up nearly 30% in the three days following the expiry.
2. **Grok 4.5 and AI Models:**
* **Grok 4.5 Build:** Went live *after* SpaceX's IPO.
* **Usage Tripling:** The Q2 earnings call (about a week prior to the podcast) revealed that Grok 4.5 resulted in an immediate tripling of token usage due to its quality.
* **Pareto Dominant:** Grok 4.5 is described as "Pareto dominant," offering the most intelligence for the least cost, serving as a "phenomenal grunt worker" AI.
* **Cursor Acquisition:** Has not yet closed, but is expected to be a "huge amplifier" for SpaceX AI upon completion.
* **Rapid Development Cadence:** Noted for "ridiculous" cadence of updates, improvements, new features, and integrations.
* **Grok Imagine 2:** Launched "just a couple of days ago."
* **Grok Build Integration:** Now integrated into the website and app, making it more user-friendly.
* **Grok Voice Agents:** Major progress has been made.
* **X Platform Data:** The exclusive real-time data stream from the X platform (text, images, video) is a "hugely useful tool" for training.
* **Model's AI Model Contribution:** The speaker's 20-year SpaceX valuation model (base case 2046) currently estimates the AI models (Grok, etc.) will represent only 2.2% of total revenue and 2% of total profits.
3. **AI Compute Business:**
* **Immediate Absorption:** Gavin Baker notes that the "vast amount of compute" SpaceX put into the market overnight was "utterly absorbed," indicating astronomical demand.
* **Financial Incentive for Companies:** Companies need AI compute for training new models (leading to usage spikes like Grok 4.5's 3x increase) and for inference (increasing customer usage and revenue).
* **Near-Infinite Demand:** The speaker's working thesis is that demand for intelligence and thus AI compute will be "near infinite for years, if not decades."
* **SpaceX's Advantage:** SpaceX has demonstrated an ability to bring AI compute online "much more rapidly and more affordably."
* **Market Estimates vs. Reality:** Consensus estimates for next year are $73 billion (context unclear, but likely for AI compute). SpaceX is aiming for around 8 gigawatts of compute in the medium-to-short term, monetizing at something like $50 billion per gig (medium-term target of $30-50 per watt).
* **Unique Scaling Ability:** Only hyperscalers, CoreWeave, Crusoe, and SpaceX have brought on more than 500 megawatts of power in a year, with SpaceX being the fastest and most cost-effective.
* **"Funder AI Report":** Cited for suggesting SpaceX could bring on 8 gigawatts in 18 months.
* **Revenue Potential:** The speaker estimates that bringing on "a couple of gigawatts" of compute in the next 12-18 months could generate $100-200B+ ARR just from new compute (compared to Tesla's ~$100B current revenue and SpaceX's sub-$20B revenue in 2025).
* **Market Disbelief:** The speaker believes the market's sub-$2 trillion valuation of SpaceX reflects a general disbelief in this "obscene" potential.
4. **Orbital Compute:**
* **Increasing Feasibility:** Gavin notes that "orbital compute feels more real every day," citing a recent Starship landing.
* **StarCloud Validation:** Benchmark, a venture capital firm, funded StarCloud, a separate orbital compute company, validating the concept from outside the "Elon ecosystem."
* **Starlink Laser Technology:** StarCloud is expected to utilize Starlink's laser technology for orbital compute.
* **Model's AI Compute Contribution:** The speaker's 20-year SpaceX model estimates the **AI compute leasing business (on and off Earth)** will contribute a staggering 79% of both 2046 revenues and profits in the base case, contrasting sharply with perceived investor consensus.