Speaker 0:  spacex nearly doubled its revenue in a year, and wall street rewarded it by sending the stock down. why? because underneath a 7,800,000,000 in quarterly revenue was an absolute staggering 15,800,000,000 ai infrastructure bill. spacex isn't merely trying to dominate rockets anymore. elon is attempting to turn the company into one of the world's largest ai infrastructure businesses. spacex earned 7,800,000,000 last quarter and spent roughly twice that amount just building ai infrastructure. the rockets may get the photographs, but the biggest bet inside spacex right now might actually be gpus. apparently, rockets weren't expensive enough. spacex nearly doubled revenue. starlink is throwing off serious operating profit, and elon musk found somewhere to put it a truly absurd number of nvidia chips. spacex first quarterly report as a public company showed 7,814,000,000 revenue, up 92 with losses narrowing to 541,000,000. so they're only losing $541,000,000 a quarter. that's actually pretty good. but the headline behind the headline was spending 18,369,000,000 in capex, including 15.84 ai. starlink's connectivity business remains highly profitable while spacex's ai division is growing dramatically, but still losing money on gaap general approved accounting practices operating basis. management believes those investments can support a 100,000,000,000 annualized revenue runway by the end of twenty twenty six. investors are essentially being asked whether they believe the returns can arrive as quickly as the spending. what do you think about this, john?

Speaker 1:  yeah. this is crazy. a total of 18,370,000,000 on capital expenditures during the quarter. and you said 15.83 was to ai. right? yep. so this is why investors sold the stock despite the enormous revenue beat because the market is trying to determine whether spacex is becoming one of the most powerful technology platforms or one of the most capital intensive companies. so, and now i don't know if we're covering it today. so, nvidia has partnered with, like, blackrock and jpmorgan and all these other, banks. are we covering it today? where their companies can now borrow from these banks to buy nvidia ai chips.

Speaker 0:  so no. i don't think we're covering it. no.

Speaker 1:  okay. we're not covering it today. we should. we'll cover it next time. but, there it's again, it's just adding to the ai bubble. and, hopefully, we can get through it. but if we don't, there's gonna be a lot of, repercussions here. so the good thing about spacex is that the revenue growth is becoming increasing increasingly diversified. so they now report three major operating segments. so space, which is 962,000,000. we'll call the next one connectivity, which is 4,291,000,000, and ai, which is 2,561,000,000. and, essentially, if you look at that connectivity is the highest one. so that's essentially starlink, and that's the financial engine. and starlink is currently the strongest business inside spacex. the connectivity revenue increased from 2,588,000,000 in q two of twenty twenty five to 4,290,000,000 in q two of twenty twenty six, which is 66%. and they just signed another deal with, i think, vietnam, somewhere in south asia, to bring starlink there. so, there's yeah. i think they finished off with about 12,000,000 subscribers. so starlink is what's holding this whole thing together right now with all the spending that's happening and all that sort of stuff. right? but, i don't know. do you think this is sustainable, or is wall street right by pulling back?

Speaker 0:  well, this is traditional for wall street. they pull back on good news and buy back on bad news, because they like to buy the dip for one for some reason, and they all kinda move with the mindset. so are they right to pull back? i have to put that aside a little bit because market's all about timing. right? because you can think completely different than the market, and you have proof. but if the market moves one way and you move another way because of your proof, then you still lose. it doesn't really matter. so it's not so much predicting what the company does. it's predicting how the market's gonna react to what the company does. so taking a step back, they're they have a huge amount of revenue now coming in from google and from anthropic for their data centers. do you know that their, build time for a new data center is now down to sixty six days? it's crazy how quickly they can, put these things up. and what? and

Speaker 1:  the problem isn't anymore how fast can they put them up. the problem is getting approval to build them now.

Speaker 0:  yeah. that's a secondary issue, and i and i think it's a little crazy what, everyone's doing around that. i'd love to talk about this if we get through this, because what they're doing is crazy to me. the whole point, i guess, is the demand right now is data center chip gpu, and they're getting a crap ton of revenue from month by month revenue from anthropic and google. and if they have more data centers, they get more revenue. it's a long term play that the other companies aren't willing to make because, dario from anthropic said, if they bought the hardware at their expected growth rate at 10 x, they'd go broke if they only went eight x. you know? so they can't afford to buy it, but they're more than willing to pay huge amount of, surplus money to rent it because they can afford it while the run rate's high, the run rate goes down, they can jump out of it ideally. so i think this is really interesting in a world where gpus and data centers are gonna be the powerhouses. they don't have anyone else who's competing with them. the big other like, google's even going after them, and the other people who do data centers is amazon and facebook. and so i don't think anybody's so to me, this is an amazing move. i love where they're going. we talked about starlink, and their cash cow right now. i honestly believe it's gonna jump to a bigger cash cow because if they can get over the legislative hurdles, they're planning on deploying a thousand v three satellites within the year. so v three satellites will give us, they something like a thousand times the bandwidth that we have now. and, and he's planning his phone network. so yes. i'm at yeah. so imagine that in a couple of years, we've got these fully deployed systems, and you can now buy a satellite phone that you don't have to worry about micro sims. you don't have to worry about switching providers. you don't have to worry about it's satellite connected direct up. there's no

Speaker 1:  well, actually, no. it's not just satellite connected direct up. he's building cell phone towers too because so what? and verizon won't lease him time on their towers, so he's building his own infrastructure.

Speaker 0:  yeah. so i haven't seen that. so i'd love to delve into that because i if he has to build his own infrastructure, and i guess it depends what that means, because he needs to build his backhaul infrastructure no matter what. because you've gotta backhaul it from somewhere and, you know, preferably closer to the source. but i'm not sure with the low orbit satellites, are they talking to local microwave towers and then going up to the, satellite? or are they using, like, what is in the starlink technology, and they're just shrinking it down to give you direct satellite access? if he has to build his own infrastructure, then he's gotta play the regulation game. he's gotta buy signal from someone if no one's gonna give, yeah, license that, which is a whole problem. so we'll

Speaker 1:  have to see read. read, it, from what i read, he he's going to have to build his own cell phone, type, infrastructure towers. i'll have to find the article again. but,

Speaker 0:  yeah, we'll do a whole thing on his big bet on this yeah. so we can drill down. i'd rather not, you know, speculate now on

Speaker 1:  no. no. no. yeah.

Speaker 0:  because we don't have it right. but, these all also said that, teslas will be a hot spot automatically. so somehow, if there's a tesla nearby and you have a, like, a proper spacex account, you'll be able to use it. so this is interesting. so they're trying to make these plays into, a market that other people don't have access to the ways they're playing. like, no one else has access into, hey. let's just put, in our robotaxis, all our teslas, all our other vehicles out there. we'll put wi fi hotspots for anybody who subscribes, and they'll have free access to all these places. so interesting to see. i like the hardware play. i like they are by far the leader in satellite stuff.

Speaker 1:  yeah.

Speaker 0:  their government contracts, i didn't really get a long hard look at it because they're usually left out of some of this stuff, or not broken out separately, because we have starshield and a few other things related to their military contracts and whatever is going on with, using some of this stuff inside, the pentagon and whatnot. yeah. i'm impressed where they're going. the revenues go ahead.

Speaker 1:  yeah. let's talk about kind of the vertical integration and how it's sort of like a flywheel so that people can understand. so this is probably one of the best ways to explain the company. so falcon nine lowers launch costs. lower launch costs allows spacex to deploy more starlink satellites. more satellites improve starlink coverage and capacity. better starlink service attracts more customers. more customers generate more cash. that cash finances starship and ai infrastructure. starship could eventually lower launch costs even further, and cheaper starship launch could enable enormous next generation starlink satellites and potentially orbital data centers. that's kind of the system that musk is attempting to build besides the the consumer side of things. this is kind of the back end infrastructure on this on the flywheel of how these businesses kind of reinforce one another.

Speaker 0:  and the intelligence to run it

Speaker 1:  all with

Speaker 0:  the ai. you know?

Speaker 1:  is it really intelligence still with grok? sorry.

Speaker 0:  well, you can say that all you want, but they're building and building. you know? and how long ago were we talking about grok 4.5 just coming out? because grok 4.6 just came out, and i'm using it. and so far, it's great. again, i'm using it to code, so i haven't actually used it to, you know, talk to or come up with plans and crap. yeah.

Speaker 1:  you gotta check out hermes agent, by the way. we'll we'll talk about that another time. but

Speaker 0:  okay. that's a whole and i know all about that. you know, i run openclottio. i know all about the different harnesses, hermes paperclip. people just jump to the next one, jump to the next one. if you follow my buddy, ruve, he's had his ruve meta harness for a long time. so go check all that out. but let us know what you think about the spacex, revenue. do you think the investors are way off, because some are jumping in and some are jumping out? you know, because spacex delivered a genuinely extraordinary growth quarter, but the bigger story is that the company is placing an even larger bet on becoming a global ai infrastructure powerhouse. spacex spent twenty years lowering the cost of getting things into orbit. now musk is betting that things worth launching won't just be people or satellites. it'll eventually be computation. if you had that 15,800,000,000 to invest in spacex today, would you put it into starship, starlink, or ai compute? let us know your thoughts in the chat below.