Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%.
What Musk Controls:
- CEO removal = his consent. You can't fire him even if he destroys the company
- Take business for himself. SpaceX gets a rocket deal? Musk can say "I'll do it at Tesla instead"
- 85% voting forever. No expiration, no time limit, permanent control
- Board elections. You have no power to elect directors you trust
On the subject of the governance structure this [1] is worth a read ...
"The company significantly limits shareholders' rights to sue. SpaceX's bylaws will make it clear that anyone who owns shares "irrevocably and unconditionally" waives all rights to pursue a jury trial. Shareholders will also be prohibited from bringing class actions against the company, its directors, officers, controlling shareholders or bankers tied to the IPO, according to the filing.
Instead, shareholders will be subject to mandatory arbitration, which had long been illegal in the U.S. The Securities and Exchange Commission reversed its position, opens new tab in September, allowing companies to adopt mandatory arbitration policies, which are private proceedings overseen by arbitrators."
... I can't remember how much he spent in Pennsylvania but you might argue it was money well spent.
[1] https://www.reuters.com/sustainability/boards-policy-regulat...
If you haven't wiped out their corporate savings and sent the stock price tumbling, you haven't really done anything to get the needed recompense and to discourage the behavior in the future. Right now, many companies are effectively sole proprietorships or partnerships with window dressing made to look like there's real accountability. If it becomes impossible to oust the CEO, you're not a shareholder, you're a bagholder.
So yeah, he’d YOLO and do the Mars trip before any of the above. Which is what most nerds on HN would love, except their blind hatred for Musk would make them despise even that.
This is just sole proprietorship with window dressing.
The point of a company going public is not to just distribute possible profits among speculators, but to give the public a meaningful voice in company direction, in particular by offering escape hatches like being able to eject a CEO who's lost their mind and is no longer acting in the fiduciary best interest of the shareholders, which will so obviously happen here.
The point is to raise money from investors. The investors get a voice in exchange.
Fund managers and the like do, which covers a lot of passive investors, which is good until a company joins one of the major indices at which points funds may be obligated to buy in.
It's a deeply distressing moment, and I see it as a time to renew calls for consumer-protecting regulations and antitrust laws with more teeth in the markets where this kind of behaviour's currently flourishing.
And it is a LOT of money that he is floating ($77B) so there have to be dumb people at scale for this to work.
> In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones. We surmise that the company, having invested tens of billions to find this out, would cut bait on the project sometime around 2028, the way management walked away from plans to build multiple small-car factories at Tesla.
Specs: https://x.com/SawyerMerritt/status/2064108916611420273?s=20
He knew it was bullshit. He's dumber than most people realize, but he's not dumb enough to actually believe all the bullshit he spouts.
I don't get the slow roll on this thing. The stations in LA and SF are gonna end up sort of like Tokyo station for the Shinkansen. A giant mall area with a huge amount of commerce. Why isn't this thing done yesterday?
CA HSR is slow partly because the state government has limited funds and giving out slowly. The federal government should have been contributing more. The other problem is it kept getting delayed from legal issues, mainly from acquiring land. Going forward is bad because they decided to do the easy part first and leave the hard tunnels for later.
The cost of the HSR is tiny and inconsequential. For the 40 million residents of California it amounts to about $20 a month over the 10 years the fund has been going. It hasn't even spent 50% of the total fund yet. If construction was even 2x the current rate we would already have the central valley done. So I know they are slow rolling it. That's my point. They can speed things up even just a little.
Land rights. Environmental reviews. Various suits attempting to exert extra compensations for tangential (at best) issues. Basically the California around.
The state government of California was doing a bang up job of destroying this project on their own. He didn't really need to help them. Moreover given the rise of remote work I'm not sure it has as much value as it would have had it been constructed when it was designed.
> but he's not dumb enough to actually believe all the bullshit he spouts.
Yet he's not afraid of the consequences either. This seems more telling to me.
He lies every day about his companies, and no one ever does a thing about it.
DOGE killed a few hundred thousand children for no reason at all; it didn't even save money. He did it purely for the joy of killing black and brown children in the global south. No one with any power to deliver has ever suggested he should face consequences for it.
Why should he be afraid of consequences? There will never be any for him, as long as he is protected by unimaginable wealth and a power structure designed around serving those with wealth.
If Starlink didn't exist, then it could make sense to put edge data centers in orbit. But Starlink means can put edge computing everywhere on the ground.
If you build one data center on earth, you did just that.
If you build one in space and make it work and cost effective, you can scale infinitely (which is why SpaceX is uniquely positioned), until you hit the next bottleneck (which is why Tesla is building a fab).
Tangential: If you play Factorio or Satisfactory, this is _all_ you do. Removing bottlenecks.
Even if you pay a bit more to position them in a higher, more stable orbit, you still can’t physically get to them to repurpose equipment.
Check this datacenter gadget out:
https://www.marvell.com/blogs/sustainable-computing-with-cxl...
That trick is a complete nonstarter if the modules you’re trying to reuse are in space.
Ok. And why does it follow from this that the physics of an orbital data center makes no sense?
That's assuming he can get launches down to $10 million which I'm sure will be right behind his flying roadster and cybertruck boat
The construction of the building w/ zoning and the political fights and utilities arguments and years of time and whatever is what is being dealt with by putting it in orbit.
And then when you build on the ground you could even send people to it to swap hard drives and GPUs when they inevitably fail or upgrade them to keep them current. At lower rates of failure than they would in space because we have a planetary magnetosphere protecting us from cosmic rays.
It implies that China, which can cut through much red tape and has great (and improving) utilities and infrastructure, lots of energy, can just build normal datacenters and save the cost of dozens of space flights.
They’re not launching something the size of a building!
It's just a wildly expensive bad idea, and it is obvious to anyone that understands how much it costs to put things in space. A man who runs a rocket company knows how much it costs. He knows it's dumb as hell. But, he also knows the average investor is even dumber, because TSLA still trades at ~357 PE.
Having said that... it might justify the valuation if every other data centre build-out gets blocked by insufficient power supply.
Might.
Technologically, will they work? Shovel enough money at the problem and there's no reason they shouldn't. Rack up some GPUs in a shipping container, attach a couple of solar panels to the outside, zip-tie a Starlink to the door. Except for the little problem of heat. Space isn't cold, it's more of a giant Thermos bottle, and they gotta park in full sunlight, which is famously the only thing supplying the heat that keeps the entire planet alive. Good luck to them with their radiator setup.
But economically? There's no chance. Too expensive to get into space, too many auxiliary systems required, no maintenance is possible, and, given the lead time of prepping payloads for launch versus the rate of new developments in AI hardware, likely badly behind the times if not outright obsolete on the day of liftoff.
There is no shortage of land despite what some in the media would have you believe. Those same solar panels work at ground level. DCs don't have to be water guzzlers or grid destabilizers. They'd be better off by every metric solving terrestrial problems for the same money.
Of course they won't work. It's ludicrous that we have to even entertain the thought of otherwise.
SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch).
50 kW per ton x $400K per ton = $8,000 per kW = $8 million per megawatt in launch costs.
That means a 100 megawatt orbital data center will cost $800 million to launch.
You need about 833 satellites for 100 megawatts, so let's round up to 1,000 satellites. Let's say one of these satellites cost $3 million (that's probably high, but let's go with that for now). That's about $3 billion for satellite manufacturing.
Bottom line: It will cost SpaceX $4 billion to launch a 100 megawatt data center.
Anthropic is paying SpaceX roughly $50 million per megawatt per year. SpaceX could sell access to its data center for $5 billion per year. Assuming the satellites last for 4 years, that's $20 billion in revenue from $4 billion in costs.
Please correct my math/assumptions, but this rough calculation shows that SpaceX could be right and Morningstar could be wrong.
Well... yeah, sure, everyone thinks that.
And the fact that it doesn't matter and won't impact demand for shares illustrates how increasingly and dangerously untethered the stock market is from reality.
"Disconnected from historical valuation norms" is a more sensible statement.
The idea that the stock market is "detached from reality" is dangerous too because the stock market is...reality. People make and lose real money in it every day.
There are good arguments that the historical valuation norms are reasonable and deviation from them is "dangerous" but there's no actual law that says the stock market needs to behave according to history.
While I personally think the current behavior has significant risk, I also can't dismiss that the role the stock market plays today is different. It's not just about raising capital, providing liquidity, price discovery, risk management and building wealth, for large numbers of laypeople it's also the go-to casino (entertainment) and a platform for expression (way to express dissatisfaction with corporations, politicians, the world, etc.).
You and I and a million other people might run away from Tesla's valuation but that doesn't mean that the market must.
I think it's very obvious that the historical norms that governed and explained pricing in the stock market no longer apply, for better or worse. Between the massive manipulation of the markets by central banks to the rise of the retail investor (and social media, meme stocks, etc.), there are a lot of factors in play that weren't a thing 30 years ago.
Part of the reason for this demand is the fact that index tracking funds like QQQ will be forced to buy up massive volumes of shares. Not only that but other non index tracking funds that track large cap stocks will also have to buy. Vanguard large cap for example manages trillions of dollars. That in itself will have 100s of billions worth of buy orders.
It's better than what preceded it but we still manage retirement wealth poorly.
As far as I can tell, that’s exactly how it works. Reality is investor emotions. If it shouldn’t be that, I mean the whole system needs a rework.
One of the obvious problems with the short-term thinking is you can trade on feelings all you want, but if things go really bad the company goes bankrupt and suddenly the court say no more trades allowed anymore and your and your value goes to zero.
“When the tide goes out we will find out who has no shorts on.”
I don’t think I have ever seen this before.
Who is this product for? How the hell did "data centres in space" make it into the prospectus at all?
More to the point, why is Morningstar being so generous with their interpretation of that line of business? It's plainly insane, and you don't need an advanced degree in physics to understand why.
1. The recent Iran drone attacks on AWS data centers
2. Growing anti-AI and anti data center sentiment at home, plus Larry Fink (ceo of Blackrock) in a recent interview being terrified of dissident groups using consumer drones to attack data centers.
3. Anthropic, Grok, and other AI vendors becoming more and more integrated into defense and military, plus increasingly reliance on AI for other national surveillance systems
Data centers are and will be targets, both for national military attacks as well as home grown dissident attacks, so they are proposing to move some of the critical workloads to somewhere that the only group that can attack the data center hosting the workload is a nation state with space launch capabilities. That significantly reduces the number of actors that can attack the data center. And if the US wants to they can probably bomb all the other space rocket launch facilities worldwide in less than 24 hours, leaving extremely limited capability to attack a space hosted DC.
Is it insane? Probably, but the US has done insane things with military budget before, and will continue to do so for a long time. If you are Elon, its a great time to milk that US defense budget for some more R&D, and even if the main project doesn't work out, he's still going to be able to keep some innovations within the company and apply them to Starlink and other more realistic endeavors.
2 -- Space also belongs to the citizens and not the corporations.
3 -- The defense industry is the single worst most corrupt and idiotic industry we still shackle ourselves to.
Right now, 70% of the country is at least skeptical of DCs and at worst absolutely hate them. NIMBY is basically the rallying cry. That's why you go "up" (if they can make starship work). The physics is "hard" but doable, you can keep them cool enough in a sun synchronous orbit. The math pencils out. It's not my field, but back of the envelope math seems to work. Scott Manley has a video on it if you're skeptical.
But, people keep thinking about this like "return on investment" is the only thing driving this play. They're literally the only company with a mostly reusable system (unless you count that company trying in China?). They're the closest company to a fully reusable launch vehicle. They have a ton of government contracts with star shield. After Bezos' rocket blew up last week, there's basically nobody close to competing with starlink...
I am not a Musk fanboy, but, like, there is literally no other serious space competitor right now. I mean, "maybe" Boeing? But not really - they're years away...
So, like if you read about the Memphis Datacenter - Colossus I think? They're unable to get power, they're pulling in power from Mississippi to keep the thing running. You know how many times they have to ask permission for that? The infrastructure costs there just to power it start to get absurd too. Then the unending line of approvals and environmental impact studies and permits. For all the people saying, "it'd be cheaper on earth" it might be in terms of dollars, but if you can basically iterate entirely unfettered in space, it's the obvious choice if you can make it happen.
Like, seriously, go try to build something, there are a LOT of rules outside of rural areas. It's literally why my wife and I decided to build our cabin where we are building, because there were basically no restrictions. Meanwhile in town, my buddy's deck was a nightmare to permit... it was a deck, not bridge. Seriously, to all the people saying, "it's easier" go try to get something built in a big city or where you have to fight through permit hell.
These tech oligarch guys view this (I think rightly - it's one of the only things I view them as right on) as a race to AGI against the Chinese. We're in the lead right now, cool, but the Chinese have excess kilowatts and we don't. In fact, we don't have adequate power plant infrastructure at all and we couldn't get the power plants built if we wanted to (the Ezra Klein and Derek Thompson book Abundance touches on this topic if you're curious as to why). It's not going to happen.
But up? No NIMBYs in space (yet). So they're going to go where nobody will tell them "no." At least, that's what I would do if I owned a literal rocket company.
People are all looking at this stuff through the lens of "money" as if that matters hardly at all after AGI, lol. The analysts are looking at this like it's 1995. I mean, PE ratios are important, don't get me wrong, but after 2016, and Trump, and the applications of transformers, and the war in Ukraine (and current shit show in Iran), and the rising price of fuel, and, well I'll stop, the list goes on and on, but acting like the "normal" rules of investment apply is just silly. This stuff is about power, and he who controls access to orbit is worth a basically unlimited amount of money...
Do I wish it was happening differently? Yup. But hey, we decided to give up on space as a country like 50 years ago, maybe we can try to do cool stuff in space now.
1. Space operations: $370 billion;
2. Connectivitiy: $1.6 trillion, roughly split between mobile and broadband; and
3. AI: $26.5 trillion, which includes $22.4T in AI Enterprise applications, $2.4T in AI infrastructure, $760B in subscriptions (ie Grok) and $600B in digital advertising.
So immediately we see the limits of the space market. SpaceX did 170 launches in 2025. At $100M each, that's $17 billion in revenue and Falcon 9 launches just don't cost that much. That brings Starship into the picture but that program is arleady at $15 billion spent without a single dollar in revenue. So we know from the outset that only the other markets can really justify the STarship prgoram because you have to remember that STarship has to compete with Falcon 9. Or, even worse for SpaceX, a Falcon 9 competitor.
Now, as for Starlink, this one is interesting. Starlink has a big advantage when you need mobile broadband (eg planes, boats) as there's nothing really equivalent, Yes, there's 5G and that's fine in populated areas on, say, RVs and such. But the receivers are expensive.
I think Starlink is going to have a hard time competing with 5G, mainly because 5G already exists and Starlink handhelds are predicated on STarship being able to launch sufficient low-altitude V3 Starlink satellites, which themselves have a more limited life because they are lower altitude. And you're still going to have to deal with per-country licensing, marketing, regulations, etc.
I wonder how much of this is predicated on military applications.
But let's get to AI as that's the most hand-wavy (IMHO) of all this.
First, digital advertising. Well, when Elon bought Twitter it had $4.5B in ad revenuie. Now it's $1.8B. I also think Twitter is fundamentally limited so that's just not going anywhere. Twitter just isn't 10x'ing it's audience (IMHO).
Subscriptions? I think this is a dead market. For everyone. Why? There'll be a race to the bottom, hardware will get cheaper, eventually AI agents will be run locally (even on phones, eventually) and it's just not the cash show OpenAI, SpaceX or Anthropic think it is.
Let's also dispense with orbital AI data centers. It's a completely dumb idea. it's going nowhere. Don't believe anyone hyping it up. It makes zero sense and it will never amount to anything.
SpaceX seems unable to monetize their AI investments thus far. How do I know this? Because you don't lease DC space and GPUs to Google if you have a better use for them. So it not only looks like you're falling behind but you also need the cash. Also, this is dependent on getting enough GPUs. Published details about the Google deal seems to allow Google to cancel or revise the deal if SpaceX is unable to deliver so there is a huge risk here.
What none of these companies (SpaceX, Anthropic, OpenAI) seem to be addressing is what happens when future generations of hardware come out? What happens when running models locally becomes more and more viable? What if there is no expensive hardware moat? What happens when AI models get commoditized? I personally believe this last one will happen and China will make sure it happens.
So all in all there are a ton of risks here. I am skeptical about the long-term prospects of OpenAI in particular and Anthropic less so but I think xAI's (ie Grok's) future is way more uncertain.
I'm actually most confident in Google's future here because they haven't bet the company's future on AI not imploding.
SpaceX has been the only game in town for quite a while now, to such an extent that the intelligence agencies of foreign governments have no alternative but to launch with SpaceX. They now do more orbital launches than the entire rest of the world combined. If they really are worth less than Microsoft, then it seems space just doesn’t matter that much, because SpaceX is space for all practical purposes.
This article is just about the making money part.
Further, space is just reaching the point it can really grow.
Space is strategically important but perhaps not as directly economically valuable as Microsoft yet, and SpaceX is just a fraction of that value.
The real immediate economic value hasn't really changed for decades. Starlink is the most recent significant innovation in that area, and it's worth less than 3% of Google's revenue.
The hyped up reasons for space mattering are all completely speculative and at the limits, stretch the bounds of a sane person's credulity: asteroid mining - ok, there may be an economic case for that, but it's far future; colonies on the Moon and Mars - there's no economic case for those, it's purely a dubious expenditure of tax dollars that has no meaningful economic purpose. Etc.
So, what makes spaceflight "important" beyond what it's already used for and has been used for, for decades?
I may agree with their overall sentiment, but I think this sort of formulation is just silly nonsense from analysts who build models instead of companies.
otherwise using ROIC or CAGR might be more optimal way to evaluate your investments