SpaceX wants $1.75 trillion and a Mars colony, and honestly I've seen this movie before

The filing also includes something I haven't seen before in my decades of reading these things: executive compensation tied to establishing a Mars colony. Not revenue targets. Not user growth. A colony on another planet. Call me old-fashioned, but I remember when vesting schedules were tied to things you could verify without a telescope.

The AI pivot nobody's talking about

Here's what's interesting, and what most coverage is missing. SpaceX isn't really going public as a space company. It's going public as an AI company that happens to operate in space. Bloomberg's market structure head Larry Tabb noted the company is positioning itself to compete directly with the AI darlings whose valuations have already soared, which is a polite way of saying they want Nvidia money without building chips.

The logic, such as it is, goes something like this: Starlink generates data. Lots of data. Data from everywhere on Earth, plus eventually from orbit, plus eventually from Mars. That data feeds AI models. Those AI models are worth, apparently, $28 trillion. Or $26.5 trillion. Again, nobody's being precise here.

I've seen this movie before! It's the self-driving car hype cycle all over again, where the technology is real and impressive but the market sizing assumes everything goes perfectly for the next thirty years. Remember when autonomous vehicles were supposed to be a $7 trillion market by 2025? We're in 2026 now. How's that going?

What the risk factors actually say

Nobody reads risk factors, which is a shame, because they're where the lawyers force the company to tell the truth. Thirty-six pages of them! I didn't read all 36 pages (I have a life, sort of), but I skimmed enough to notice some themes.

There's the obvious stuff: rocket launches are dangerous, regulatory approval is uncertain, competition is increasing. Fine. Expected. But buried in there are admissions that the Mars timeline is, shall we say, aspirational. The company acknowledges it cannot guarantee when or whether a permanent human presence on Mars will be established. Which is corporate-speak for "we have no idea but we're putting it in the compensation package anyway."

There's also significant discussion of key-man risk, and we all know who the key man is. The filing essentially admits that Elon Musk's involvement is both the company's greatest asset and its greatest liability, a level of self-awareness I actually respect.

So what does this mean

Look, I'm not here to tell you whether to buy SpaceX stock when it starts trading. That's not my job and frankly I'm the wrong person to ask (my investment strategy is index funds and not looking at them). But I can tell you what this filing represents, which is a fundamental shift in how we value companies.

We've moved from valuing companies based on current earnings, to valuing them based on future earnings, to valuing them based on total addressable market, to valuing them based on markets that don't exist yet on planets we haven't colonized. Each step made sense at the time. Each step also made the math a little more faith-based.

The young founders I talk to these days, and I talk to a lot of them, they see nothing unusual about this. To them, a $28 trillion TAM for a space company is just how you pitch. You aim for the moon (or Mars, I guess) and see where you land. But what do I know, I still think a company should be worth roughly what it earns.

The SpaceX IPO will probably be massively oversubscribed. The stock will probably pop on opening day. Musk will probably become even richer. And in ten years we'll either look back at this as the moment private space exploration became real, or as another chapter in the long history of financial manias. I genuinely don't know which, and anyone who tells you they do is selling something.

One thing I do know: I've never seen a prospectus with a Mars colony in the executive compensation section. Whatever else you want to say about Musk, the man does not think small. Whether that's visionary or delusional depends entirely on whether it works, which is true of most things in life, I suppose.

If you want to argue about this, my email's on the about page. I check it daily, unlike certain messaging platforms I could name.

James Chen · 4 days ago · 2 min