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SpaceX’s Valuation Is Crazy. Maybe That's A Feature?
Investors are throwing money at long term promises that may never materialize. But if some do, maybe that's enough.
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When you dig into the numbers, SpaceX, in truth, is a connectivity company with an unprofitable rocket arm and an AI question mark. Elon Musk’s crown jewel IPO’d at a $1.77 trillion valuation today and rose to $2.1 trillion at close, a historic number that’s far greater than its books warrant.
The company lost nearly $5 billion last year after tossing money at AI infrastructure it still doesn’t completely know how to use. It’s been in business since 2002 and still isn’t making money on its rocket launch business. And yet, it just completed the biggest public offering of all time. By far.
Though some may reasonably argue the opposite, the level of support behind SpaceX may be a feature of our system, not a bug. Investors’ willingness to throw money at the seemingly impossible, or crazy, and wait patiently for results is the thing that allows the unthinkable to turn real. It enables investment in improbable initiatives like satellite internet and space data centers, and sometimes those bets pay off. Yes, there’s waste. But to expect perfect efficiency in the moonshot — or Marsshot — business is fantasy.
A similar dynamic is at play in the AI buildout. For all the debate over whether it’s a bubble or underbuild, it’s certain that at least some of today’s record-breaking capital expenditures will be written down, zeroed out, or sold off. We’re already seeing evidence of a coming price war among frontier models, major data center initiatives going sideways, and even SpaceX resorting to selling its compute to rivals (while building an unexpected AI cloud in the process). Despite the drawbacks, AI probably wouldn’t be advancing at its current rate without the financial overexuberance.
One must still pick their bets wisely. Everyday investors are increasingly assuming much of the potential downside if things go wrong. Retail investors accounted for somewhere in the low-20% range of the SpaceX IPO, much higher than the typical 5-10%. And they’ve already put in more than $100 billion of orders for the stock. That amounts to a lot of belief from people placing their hard-earned dollars in a company that didn’t have an AI play a year ago, and now says AI accounts for $26.5 trillion of its $28.5 trillion total addressable market.
SpaceX stock will also show up in a number of index funds, where even passive investors will own it. But actively putting your savings into SpaceX comes with a higher level of risk, perhaps more akin to venture capital than traditional public market investing.
That risk may be the point. It gives companies room to pursue low-probability breakthroughs, even if they may, at times, incinerate some cash on the way there. So SpaceX’s valuation may indeed be a bit out there, but perhaps not as irrational as the numbers alone suggest.
Mercari built their own JIT access system, then fossilized it and turned to Opal for what’s next (Sponsor)
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Maintaining their in-house tool got too expensive as dev tooling evolved, so they migrated to Opal: same zero-touch production posture, zero KTLO.
But the real reason it future-proofs them? AI agents are next.
Now every AI agent is governed like a human identity: least agency enforced, circuit breakers in place, rogue agents isolated.
One identity model for humans and agents.