1 00:00:00,040 --> 00:00:03,880 So Elon Musk had just created the most valuable private 2 00:00:04,000 --> 00:00:08,080 company on Earth, and possibly outside of Earth too. 3 00:00:08,080 --> 00:00:16,040 Like in the realm of orbit of Earth, SpaceX and XAI are 4 00:00:16,040 --> 00:00:18,760 merging. The combined entity is valued at 5 00:00:19,240 --> 00:00:23,360 $1.25 trillion. That's a trillion with AT. 6 00:00:23,600 --> 00:00:26,360 To put that into perspective, that's larger than the entire 7 00:00:26,480 --> 00:00:31,280 GDP of the Netherlands. One man now controls a company 8 00:00:31,400 --> 00:00:33,880 worth more than many countries produce in a year. 9 00:00:34,600 --> 00:00:38,800 The move combines Musk's rocket empire of SpaceX with his 10 00:00:38,800 --> 00:00:42,600 artificial intelligence company into a single corporate 11 00:00:42,600 --> 00:00:44,880 structure. I got a lot of thoughts on why 12 00:00:44,880 --> 00:00:48,200 this is happening and what it means for the space industry and 13 00:00:48,200 --> 00:00:50,400 why the timing really matters more than you might think. 14 00:00:50,400 --> 00:00:54,680 And we're going to get back into that after this very short 15 00:00:54,840 --> 00:00:59,480 break. Now, let's start with the 16 00:00:59,480 --> 00:01:03,240 number, the valuation, because it's genuinely staggering, $1.25 17 00:01:03,240 --> 00:01:07,720 trillion. SpaceX was last valued around 18 00:01:07,720 --> 00:01:12,760 350 billion in late 2024, hit roughly 50 billion after its 19 00:01:12,760 --> 00:01:15,760 latest funding round. So that's for XAI. 20 00:01:15,760 --> 00:01:19,240 So where does that extra 850 billion come from? 21 00:01:20,480 --> 00:01:22,520 Synergy. The corporate term is we all 22 00:01:22,520 --> 00:01:24,560 love it. And I don't use that word 23 00:01:24,560 --> 00:01:27,920 lightly because it's usually corporate nonsense BS. 24 00:01:28,280 --> 00:01:30,480 But in this case there's a real argument. 25 00:01:30,800 --> 00:01:34,720 SpaceX has Starlink, Starlink has millions of subscribers and 26 00:01:34,720 --> 00:01:38,720 a constellation of over 6000 satellites beaming Internet to 27 00:01:38,720 --> 00:01:41,680 Earth. XAI needs massive amounts of 28 00:01:41,680 --> 00:01:45,080 computing power to train its models, and Musk has been very 29 00:01:45,080 --> 00:01:50,080 vocal about the bottleneck being energy and infrastructure for AI 30 00:01:50,080 --> 00:01:52,880 compute. Now here's where it gets really 31 00:01:52,880 --> 00:01:55,920 interesting though. It's an infrastructure company, 32 00:01:56,240 --> 00:01:58,760 and then infrastructure. The ground systems, the power 33 00:01:58,760 --> 00:02:02,640 systems, the global reach. That's exactly what an AI 34 00:02:02,640 --> 00:02:07,760 company needs to scale. So the timing here isn't random, 35 00:02:07,760 --> 00:02:10,639 though we're in the middle of an AI arms race. 36 00:02:10,639 --> 00:02:14,800 Open AI, Google, Anthropic, Meta for all, pouring billions of 37 00:02:14,800 --> 00:02:17,040 dollars into compute infrastructure. 38 00:02:18,120 --> 00:02:20,360 The constraint isn't really the algorithms anymore. 39 00:02:20,840 --> 00:02:23,520 It's the physical stuff. It's the data centers, the 40 00:02:23,520 --> 00:02:26,400 power, the chips. And Musk has been building 41 00:02:26,760 --> 00:02:29,320 massive AI supercomputer in Memphis. 42 00:02:29,320 --> 00:02:33,720 He's buying up all the NVIDIA GP OS by the 10s of thousands. 43 00:02:34,080 --> 00:02:36,880 But he's been doing this through XAI as a separate company, 44 00:02:37,360 --> 00:02:39,120 separate funding and separate investors. 45 00:02:39,120 --> 00:02:43,840 But by merging these companies they consolidate the capital and 46 00:02:44,120 --> 00:02:47,840 one set of investors. Just one thing and critically 1 47 00:02:47,840 --> 00:02:50,720 strategic direction. SpaceX is cash flow from 48 00:02:50,720 --> 00:02:54,080 Starlink and government contracts can now directly fund. 49 00:02:54,480 --> 00:02:57,880 XA is infrastructure build out. XAI needed the money. 50 00:02:58,440 --> 00:03:02,680 No more finding funding, no more shuffling money between 51 00:03:02,680 --> 00:03:08,440 entities, no more competing for resources internally now. 52 00:03:08,520 --> 00:03:13,680 So what does XAI do for SpaceX? That's what I keep coming back 53 00:03:13,680 --> 00:03:14,680 to. What are they going to do? 54 00:03:14,680 --> 00:03:16,800 How are they going to work together? 55 00:03:17,920 --> 00:03:20,200 Autonomous systems is all I could figure out. 56 00:03:20,200 --> 00:03:22,520 SpaceX already uses AI for landing rockets. 57 00:03:22,520 --> 00:03:25,760 The Falcon 9 boosters that land themselves on drone ships? 58 00:03:25,920 --> 00:03:27,600 That's a machine learning problem. 59 00:03:28,240 --> 00:03:30,000 The Starship flight computer, same thing. 60 00:03:30,080 --> 00:03:33,760 Now imagine the same team with access to XAIS foundational 61 00:03:33,760 --> 00:03:38,520 models. You could have AI systems that 62 00:03:38,520 --> 00:03:42,800 don't just follow pre programmed trajectories but actually reason 63 00:03:42,800 --> 00:03:47,200 about unexpected situations. If you have an engine out during 64 00:03:47,200 --> 00:03:51,320 ascent or the weather conditions change, AI figures out the 65 00:03:51,320 --> 00:03:54,720 optimal response in real time. Super easy right? 66 00:03:55,160 --> 00:04:00,920 Musk just put his rockets and his engineers in the same place 67 00:04:01,120 --> 00:04:05,160 as his AI researchers. Everything just changed. 68 00:04:05,640 --> 00:04:09,520 Now what if we thinking about Starlink plus Grok here? 69 00:04:10,360 --> 00:04:11,960 Everybody has their opinion on Grok, right? 70 00:04:12,120 --> 00:04:14,520 There's another angle that I think people are sleeping on. 71 00:04:15,200 --> 00:04:18,959 Grok already integrates with X, the social media platform that 72 00:04:18,959 --> 00:04:21,160 Elon owns. But what if it integrates with 73 00:04:21,160 --> 00:04:23,840 Starlink? Think about it. 74 00:04:24,280 --> 00:04:26,720 Starlink has direct to device capability. 75 00:04:26,720 --> 00:04:30,440 Now your phone can connect to satellites without any special 76 00:04:30,440 --> 00:04:33,200 hardware. And what if every Starlink 77 00:04:33,200 --> 00:04:37,360 terminal, every connected device has a Grok built in? 78 00:04:37,360 --> 00:04:42,120 Because of this, it's an AI assistant delivered from space. 79 00:04:43,280 --> 00:04:46,640 Is that crazy or what? Musk has talked about building 80 00:04:46,640 --> 00:04:47,960 and everything app? Of course. 81 00:04:47,960 --> 00:04:49,560 That's what he wanted X to be, right? 82 00:04:50,320 --> 00:04:55,800 A super app that combines social media, payments, AI ride hailing 83 00:04:56,360 --> 00:04:58,760 connectivity. The merger gets him one step 84 00:04:58,760 --> 00:05:00,560 closer. That's all there is to it. 85 00:05:00,560 --> 00:05:03,120 The infrastructure layer is now unified. 86 00:05:03,640 --> 00:05:07,560 And eventually maybe they'll get Tesla on board and bring all of 87 00:05:07,560 --> 00:05:09,480 his companies, merge all of his companies together. 88 00:05:11,360 --> 00:05:14,160 Speaking about coming together, come join us. 89 00:05:14,160 --> 00:05:16,000 I've been digging through the analytics of the show. 90 00:05:16,480 --> 00:05:20,560 I've noticed that 37% of you are following this channel. 91 00:05:20,920 --> 00:05:22,320 And for you, I'm forever grateful. 92 00:05:22,600 --> 00:05:25,400 The other 63% of you, you've watched the show before. 93 00:05:26,080 --> 00:05:29,240 I've seen the stats, you've watched it, you've listened to 94 00:05:29,240 --> 00:05:31,600 it, you've been here before, or maybe you're new. 95 00:05:31,760 --> 00:05:33,440 If you're new here and you haven't hit the follower 96 00:05:33,440 --> 00:05:36,000 subscribe button, here's why you should. 97 00:05:37,240 --> 00:05:38,760 I've been doing this for about 10 years. 98 00:05:39,160 --> 00:05:41,480 I've been an independent journalist covering Elon tech, 99 00:05:41,480 --> 00:05:45,320 Space Flight, everything AI for the last 10 years, and I'll 100 00:05:45,320 --> 00:05:47,880 continue for the next 10. It's easy. 101 00:05:47,880 --> 00:05:50,400 All you need is one second. Just hit the follower subscribe 102 00:05:50,400 --> 00:05:54,440 button on whatever platform you're on right now, and I'll 103 00:05:54,480 --> 00:05:57,240 continue to do this for you. So thank you for that. 104 00:05:57,280 --> 00:06:00,040 I'm extremely grateful for you, and I'm blessed to have you in 105 00:06:00,040 --> 00:06:01,320 this community. So thank you. 106 00:06:02,000 --> 00:06:06,320 Now let's talk about what this means for everybody else. 107 00:06:07,000 --> 00:06:12,320 Amazon, Amazon, Amazon has been trying to get Project Kuiper off 108 00:06:12,320 --> 00:06:14,360 the ground for years. They've launched some test 109 00:06:14,360 --> 00:06:17,640 satellites, but they're way behind Star Lake in development. 110 00:06:18,520 --> 00:06:21,480 Jeff Bezos also has Blue Origin, which is finally getting 111 00:06:21,480 --> 00:06:25,600 competitive with New Glen. But Blue Origin and Amazon are 112 00:06:25,600 --> 00:06:27,400 separate companies, different investors. 113 00:06:27,760 --> 00:06:30,840 They have different managers, different staff, different 114 00:06:30,840 --> 00:06:34,160 timelines. Now must just show the vertical. 115 00:06:34,320 --> 00:06:36,240 Vertical integration is superior. 116 00:06:36,920 --> 00:06:38,960 You want to win in space? You want to win the race? 117 00:06:39,400 --> 00:06:40,880 Neither. Rockets, satellites, ground 118 00:06:40,880 --> 00:06:44,240 systems, the software, and apparently now the AI. 119 00:06:45,040 --> 00:06:48,760 And Amazon might need to think hard about whether keeping these 120 00:06:48,760 --> 00:06:50,600 companies separate makes sense anymore. 121 00:06:51,320 --> 00:06:53,240 Google has invested in SpaceX for years. 122 00:06:53,760 --> 00:06:56,560 They're an investor in Starlink, but they're also building their 123 00:06:56,560 --> 00:06:59,160 own AI models that compete directly with XAI. 124 00:07:00,440 --> 00:07:01,760 Puts them in an awkward position. 125 00:07:01,760 --> 00:07:04,520 Now. Do you keep funding the 126 00:07:04,520 --> 00:07:07,800 competitors infrastructure and the hardware and the software? 127 00:07:09,680 --> 00:07:12,720 That's up to them. I I see a reason for it, but 128 00:07:13,640 --> 00:07:16,680 they probably, they, they know better than us, right? 129 00:07:17,920 --> 00:07:21,040 Let's talk about the money. That's what this all comes down 130 00:07:21,040 --> 00:07:22,880 to, right? What does this mean for 131 00:07:22,880 --> 00:07:25,240 investors? SpaceX has a massive list of 132 00:07:25,240 --> 00:07:28,480 backer backers. Founders Fund, Sequoia, Google, 133 00:07:28,480 --> 00:07:32,120 Fidelity, T Rowe Price. They're just, those are the 134 00:07:32,120 --> 00:07:34,640 biggest names in venture capital and assets management. 135 00:07:34,640 --> 00:07:36,200 They're all part of SpaceX in some way. 136 00:07:37,200 --> 00:07:40,760 X AI has its own investor base. Some overlap, but not 137 00:07:40,760 --> 00:07:43,640 completely. A merger means these investor 138 00:07:43,640 --> 00:07:47,600 groups are now together. The cap table just got very 139 00:07:47,600 --> 00:07:50,520 interesting. But here's the thing, at $1.25 140 00:07:50,520 --> 00:07:53,680 trillion, who can even invest at this level? 141 00:07:55,040 --> 00:08:00,920 This isn't just venture capital. You need sovereign wealth funds 142 00:08:00,920 --> 00:08:04,160 now. National pension funds, the 143 00:08:04,360 --> 00:08:08,560 biggest pools of money on our planet, have to go into this 144 00:08:08,560 --> 00:08:12,200 thing, which is wild. Saudi Arabia's Public Investment 145 00:08:12,200 --> 00:08:14,920 Fund has been looking for ways into the AI space. 146 00:08:15,280 --> 00:08:20,160 Abu Dhabi, Singapore and Norway, they're all players who write 147 00:08:20,200 --> 00:08:23,960 the checks that are this big must just create an asset that 148 00:08:23,960 --> 00:08:26,480 appeals to the very top of that capital pyramid. 149 00:08:26,560 --> 00:08:29,680 The very top at the top, at the top, all the people, they have 150 00:08:29,720 --> 00:08:31,640 all the money. All the governments have the 151 00:08:31,640 --> 00:08:33,159 money. Sovereign wealth funds. 152 00:08:33,600 --> 00:08:37,440 There you go. So it's going to be interesting 153 00:08:37,440 --> 00:08:44,760 how this works out, and I would be lying if I said I wasn't 154 00:08:44,840 --> 00:08:46,920 thinking about antitrust here right now. 155 00:08:47,440 --> 00:08:50,120 The FTC has been aggressive about tech mergers. 156 00:08:50,840 --> 00:08:53,040 They've blocked a bunch of deals over the past few years. 157 00:08:54,320 --> 00:08:58,360 But it's tricky. SpaceX and XAI aren't direct 158 00:08:58,360 --> 00:09:02,320 competitors with anyone in a way that makes traditional antitrust 159 00:09:02,400 --> 00:09:06,520 case sense. SpaceX competes with ula and 160 00:09:06,520 --> 00:09:08,960 Blue Origin and Rocket Lab in launch. 161 00:09:09,320 --> 00:09:13,520 Starlink Complete competes with traditional telecom. 162 00:09:15,800 --> 00:09:18,480 XAI competes with open AI and Google and AI. 163 00:09:18,880 --> 00:09:22,440 So there's no obvious market where this merger reduces 164 00:09:22,440 --> 00:09:24,920 competition. If anything, it creates a more 165 00:09:24,920 --> 00:09:28,680 formidable competitor in just multiple markets, not just one 166 00:09:28,680 --> 00:09:31,840 place. The sheer size might attract 167 00:09:31,840 --> 00:09:35,440 attention from regulators. When one person controls a $1.25 168 00:09:35,440 --> 00:09:39,600 trillion entity with national security implications, rockets 169 00:09:39,600 --> 00:09:42,840 that launched spy satellites, and AI systems that could be 170 00:09:42,840 --> 00:09:47,000 used for who knows what. Regulators tend to pay attention 171 00:09:47,000 --> 00:09:49,800 to that kind of stuff. I don't think it's blocked 172 00:09:49,800 --> 00:09:52,000 though, but it wouldn't be surprised if there are 173 00:09:52,000 --> 00:09:54,720 conditions attached. Maybe data handling requirements 174 00:09:54,720 --> 00:09:58,240 for Starlink, maybe restrictions on what AI models can be 175 00:09:58,240 --> 00:10:01,920 deployed on government missions, something that gives regulators 176 00:10:01,920 --> 00:10:05,200 a way to claim over a site. Now let's talk about what's 177 00:10:05,200 --> 00:10:10,440 different. You know, I've studied Elon and 178 00:10:10,440 --> 00:10:14,640 his companies for years. We haven't seen anything like 179 00:10:14,640 --> 00:10:19,440 this before. He's built single companies, 180 00:10:20,000 --> 00:10:24,280 SpaceX, Tesla X, etcetera, and they've all been kind of his 181 00:10:24,280 --> 00:10:27,040 thing, right? Tesla went public, SpaceX state 182 00:10:27,040 --> 00:10:30,920 Private X was an acquisition, XAI was a new startup. 183 00:10:30,920 --> 00:10:33,800 The Boring Company and Neurolink are basically just kind of side 184 00:10:33,800 --> 00:10:36,840 hustles for Elon right now. That's the first time that Elon 185 00:10:36,840 --> 00:10:40,360 has combined two of his major companies into a single entity. 186 00:10:40,920 --> 00:10:45,520 Suggests he's thinking about his empire differently now, less 187 00:10:45,520 --> 00:10:50,240 like a portfolio of bets and more like a vertical integrated 188 00:10:50,240 --> 00:10:52,800 system. I think he's going to do Tesla 189 00:10:53,120 --> 00:10:56,960 in the next year or so if I mean, he has to get everybody on 190 00:10:56,960 --> 00:10:59,080 board, right? He has to get everybody at Tesla 191 00:10:59,080 --> 00:11:01,640 on board to do this because that would be a huge merger. 192 00:11:02,320 --> 00:11:07,560 Merge everything together, SpaceX, Tesla, XAIX, everything, 193 00:11:07,640 --> 00:11:10,160 put that all together in the mega Corp, right? 194 00:11:10,160 --> 00:11:15,160 The question is whether this is the first move or the last. 195 00:11:16,040 --> 00:11:20,120 And since it's XAI and they use Crock, does X get folded in? 196 00:11:20,680 --> 00:11:23,880 Does Tesla somehow connect all this with the robots and 197 00:11:23,920 --> 00:11:26,960 optimists? Musk has always talked about his 198 00:11:26,960 --> 00:11:32,760 company's server serving like a larger mission, human survival. 199 00:11:33,680 --> 00:11:39,320 He wants to send people to Mars so humanity can continue on 200 00:11:39,360 --> 00:11:41,760 forever. But maybe this is him actually 201 00:11:41,760 --> 00:11:43,800 building the structure to pursue that. 202 00:11:44,040 --> 00:11:48,360 I mean, maybe he's, maybe he's building the machine that will 203 00:11:48,360 --> 00:11:50,760 build a machine that'll get us to Mars eventually. 204 00:11:51,320 --> 00:11:54,560 Maybe this is him actually doing one company. 205 00:11:54,920 --> 00:11:57,520 Finally, the one vision. You know how we wanted to like 206 00:11:57,520 --> 00:12:01,600 the X company, a trillion dollars to make it happen. 207 00:12:02,040 --> 00:12:05,040 They need all the money, right? But there's also things that we 208 00:12:05,040 --> 00:12:08,000 don't know. There's a lot that we don't know 209 00:12:08,000 --> 00:12:10,520 actually. What's the governance structure? 210 00:12:10,520 --> 00:12:13,720 Who runs the combined company? What happens to the existing 211 00:12:13,720 --> 00:12:16,640 executive teams? We don't know the exact deal 212 00:12:16,640 --> 00:12:19,680 mechanics. And is this a merger of equals? 213 00:12:19,960 --> 00:12:23,480 Is 1 company acquiring the other or are there new shares being 214 00:12:23,480 --> 00:12:26,320 issued? Are these people going to be 215 00:12:26,320 --> 00:12:28,680 deluded? You know, the SpaceX people or 216 00:12:28,680 --> 00:12:32,400 the XAI investors? Nobody knows and we don't know 217 00:12:32,400 --> 00:12:36,040 how employees feel about this. SpaceX has a distinct culture. 218 00:12:37,480 --> 00:12:40,440 Move fast. Engineer the hell out of things, 219 00:12:41,000 --> 00:12:43,960 launch rockets, get to Mars. Damn it. 220 00:12:44,720 --> 00:12:48,480 XAI has been more of kind of like a research lab, building 221 00:12:48,480 --> 00:12:52,200 foundational models, competing with open AI, intellectually 222 00:12:52,480 --> 00:12:56,600 grok, etcetera. Cultures might clash, or they 223 00:12:56,600 --> 00:12:59,280 might energize each other. They might realize that they 224 00:12:59,280 --> 00:13:03,000 need AI to get them to Mars, so that might be a thing. 225 00:13:03,920 --> 00:13:12,000 So Musk now controls a company that's $1.25 trillion. 226 00:13:13,360 --> 00:13:17,680 You can launch rockets to Mars eventually and build AI systems 227 00:13:17,680 --> 00:13:20,840 that might eventually think better than humans, Optimus. 228 00:13:21,920 --> 00:13:27,280 Whether that is exciting or terrifying, that's up to you. 229 00:13:27,280 --> 00:13:29,920 Depends on how you feel about Elon and how he could control 230 00:13:29,920 --> 00:13:31,480 everything. Because he could control the 231 00:13:31,480 --> 00:13:35,760 skies at this point, right? If he has AI and Starship 232 00:13:36,280 --> 00:13:40,680 working together with Starlink and Grok on every phone that has 233 00:13:40,680 --> 00:13:44,120 Starlink, he's controlling a lot of stuff at that point. 234 00:13:45,560 --> 00:13:47,600 But it's a huge scale. It's undeniable. 235 00:13:47,960 --> 00:13:50,400 This isn't a startup. SpaceX isn't just that little 236 00:13:50,400 --> 00:13:54,520 company in the dirt lot at the, you know, at the end of Star 237 00:13:54,520 --> 00:13:59,440 Base in Texas anymore. It's an institution. 238 00:13:59,680 --> 00:14:02,400 It's mature for better, for worse. 239 00:14:02,840 --> 00:14:05,760 These kind of institutions shape the future. 240 00:14:06,720 --> 00:14:09,760 Now, if you've been here this whole time, I want to say thank 241 00:14:09,760 --> 00:14:12,440 you for participating and being part of this. 242 00:14:12,760 --> 00:14:15,840 So please take a second hit the subscribe button, leave a 243 00:14:15,840 --> 00:14:18,160 comment down below. Let me know what you think about 244 00:14:18,160 --> 00:14:22,600 all the stuff. Are you scared or I don't know? 245 00:14:22,600 --> 00:14:24,720 Are you energized? Are you excited about this? 246 00:14:24,720 --> 00:14:31,720 Because there's some part of me that's thinking like oh AI more 247 00:14:31,720 --> 00:14:35,440 AI in SpaceX stuff. It might be pretty cool. 248 00:14:35,600 --> 00:14:37,760 I don't know, it's, it's a little bit of both. 249 00:14:38,320 --> 00:14:39,840 So let me know what you think of the comments. 250 00:14:39,840 --> 00:14:41,280 All right, take Care now.