On October 7, 2026, host Dylan Loomis welcomed new patron James P. and discussed the complex valuation of SpaceX.
**SpaceX Valuation and Vertical Integration:**
* Loomis opined that SpaceX, upon going public, will face similar valuation challenges as Tesla, due to its diverse operations across 12+ sub-companies, many in nascent industries with unproven technologies and uncertain deployment timelines.
* Adam Jonas, who often asks clients if they own SpaceX, reported that out of 40 clients, not a single hand went up, indicating widespread uncertainty on how to value the company, leading investors to stay on the sidelines.
* While many view SpaceX as expensive, Morgan Stanley is calling the stock "cheap and getting cheaper."
* Jonas noted that consensus models use $18 per watt for compute, but SpaceX is pricing its watts around $30-$50, or even higher, suggesting experts are severely undervaluing a portion of SpaceX's business. Loomis added that SpaceX's new compute is frontier-level, justifying high prices due to limited coherent compute availability.
* **News:** SpaceX is seeking approval for a Florida gas pipeline (Coastal Connect Services, a subsidiary) – an over 32-mile, 16-inch natural gas transmission pipeline in Brevard County – to supply methane for Starship launches. A similar 8-mile pipeline is underway in Boca Chica.
* **News:** SpaceX is hiring natural gas traders.
* Loomis views this as "vertical integration" similar to Tesla, creating durable moats, unlocking scale, retaining margins, and eliminating supply chain risk.
* Gwynne Shotwell stated SpaceX will pursue more pipelines, process its own propellant, and explore drilling.
* Fact: Each Starship launch requires ~1,000 tons of propellant, a scale that cannot be sustained by current truck deliveries (hundreds of LNG truckloads per launch).
* Opinion: No other launch company is building dedicated pipelines or liquefaction plants because competitors lack SpaceX's launch cadence.
* Opinion: While costly short-term, vertical integration will drive down SpaceX's launch costs long-term, with pipeline gas beating truck-delivered LNG in volume. Traders will secure the best prices.
* Loomis believes SpaceX is building a significant head start in critical infrastructure for launch at scale, opening a new frontier.
**SpaceX AI (StarMind) and Interplanetary Ambitions:**
* Michael Nichols, President of SpaceX AI, explained that StarMind will be a much larger constellation than Starlink, with SpaceX having filed for up to one million satellites.
* These satellites will operate in clusters of ~10 (subject to change) in low-inclination and sun-synchronous orbits, forming "coherent compute" units.
* Each StarMind satellite might be a 250-kilowatt rack of compute (like an NVL-72). Clusters will be interconnected with ~10 terabits of bandwidth, using lasers in space instead of terrestrial cables.
* Fact: This orbital compute will largely be for inference, not training. A user prompt via Starlink would be routed to a StarMind cluster, which runs a loaded model and sends the answer back. Larger models can be split across a 10-satellite cluster.
* Gwynne Shotwell noted orbit's utility for inference as only questions and answers, not full models, are transmitted.
* Elon Musk stated earlier this year that "99% of compute long-term will be for inference" and "the future is overwhelmingly inference." Inference is using a "brain" (trained model) to get answers.
* Loomis connected this to Tesla, where RoboTaxis, autonomy, and Optimus's real-time decisions rely heavily on inference, requiring immense inference compute globally.
* A 10-satellite StarMind cluster would offer ~700+ GPUs of coherent compute, significant enough for some model training.
* Opinion: Orbital Compute is a "durable moat" for SpaceX, with their track record instilling confidence despite remaining challenges like optical bandwidth between satellites. No other company will have the same compounded learnings or real-world data from manufacturing thousands of satellites daily.
* **News (from Elon):** SpaceX plans to change its name to "SpaceX SI," which Elon believes is better.
* SpaceX's ambition extends beyond Earth, aiming to "extend consciousness beyond this planet" by connecting the Moon and Mars, forming an "interplanetary mesh of connectivity" using Starlink's technologies.
* This requires continued improvement of space safety in LEO to enable scaling. Elon stated SpaceX will provide connectivity "throughout the solar system and beyond."
**Space Safety Initiative:**
* Michael Nichols emphasized safety, noting that safe space operation requires knowing satellite/object positions, velocities (ephemeris data), predicted trajectories, and planned maneuvers from all operators.
* **News:** Starlink has launched a new "space safety platform" offering free ephemeris sharing, instant conjunction screening, and prediction analysis for satellite operators.
* Opinion: SpaceX goes "two orders of magnitude beyond the industry standards for space safety," and doesn't have to provide such a platform.
**TerraFab and TSMC Speculation:**
* **News:** Reports suggest TSMC might join the TerraFab project. Elon confirmed "discussions," indicating potential for a partnership.
* Fact: Intel previously joined TerraFab as a manufacturing partner, planning to use its 14a technology (~1.4 nanometer) by production time.
* Fact: The TerraFab research facility is in Austin, the full-scale site in Grimes County.
* Rumors link TSMC's potential plans to build multiple fabs in Texas (possibly up to six in the Dallas area) to the TerraFab.
* Elon's early prediction: TerraFab output would be ~25% for Optimus and 75% for Orbital Compute. Reaching 1 terawatt of compute per year could cost $1 trillion long-term.
* Fact: TSMC has already committed over $260 billion to fabs in Arizona and is in talks for more in Texas.
* The structure of a TSMC-TerraFab partnership (ownership, operation) is unclear, but Elon is likely discussing these details.
* Loomis expressed frustration over the limited information regarding this project, calling it the biggest CapEx expense in both Tesla and SpaceX's history.
**SpaceX Financials and Future:**
* Brett from ARC opined that people underestimate the revenue potential of Starship, Starlink, and StarMind, with each launch potentially driving $700M+ in incremental annual revenue, growing with SpaceX AI software monetization. Elon Musk replied, "I agree."
* Unaccounted factors include direct-to-cell, Earth transport, lunar missions, Mars colonization (Elon's compensation is tied to a 1M-person Mars colony).
* Loomis advised listeners to expect a "generational run" rather than fixating on precise valuations, urging them to focus on SpaceX's durable moats and technological leadership, especially considering Tesla's synergy.
* **News (tonight from FT and others):** SpaceX is looking to raise $40 billion to buy more NVIDIA chips.
* Fact: SpaceX closed Q2 with over $100 billion in cash, with a net cash position of ~$60 billion after debt.
* This deal involves ~$10 billion in bank loans and $30 billion in investment-grade debt.
* Opinion: This "unprecedented" spending level signals a clear path forward. Elon's track record as a capital allocator suggests a positive outcome, with the transaction expected to close in 2027.
**Tesla News:**
* **News:** Tesla Energy PowerShare Home Backup is now available for new Model 3 and Model Y vehicles with the Powerwall 3, extending home backup by over two days.
* Features: Can power devices or the grid. No PowerShare gateway needed with Powerwall 3.
* Specs: Max continuous real power 11.52 kW.
* Calculation: A 75 kWh car battery (~5.5 times Powerwall 3's 13.5 kWh capacity) can provide ~2 days of backup, assuming average US home usage of 30 kWh/day.
* Eligibility: All new Model 3/Y ordered in the US and Puerto Rico after October 1st are PowerShare capable; some older models may also be eligible (check software tab).
* The Powerwall 3 is required as its built-in gateway isolates the house from the grid during outages.
* Opinion: This long-requested feature could drive incremental sales and upgrades.
* **News:** Procedures are underway at the European level for Tesla's FSD approval, with Germany's transport minister advocating for "swift approval."
* Tesla offered to rename the system "Tesla Assisted Driving" due to FSD name concerns.
* The German transport minister reached a "constructive agreement" with Tesla, where the system may "slightly exceed the permitted maximum speed by a maximum of 10%." Germany will support timely EU approval.
* Opinion: If Germany approves FSD before the TCMB vote, it would be significant.
* **News:** Tesla's Halloween mode is rolling out in software 2026.38.3, which also includes the new emergency drive-away feature at Superchargers (shifting into drive while plugged in).
* **Stock performance:** Tesla closed at $380.68 (+0.51%), SpaceX at $171.92 (+0.49%), and the NDX at +0.48%.
* Loomis encouraged listeners to use ZocDoc for health appointments.