Elon Musk Eyes Record IPO for SpaceX as Lesser-Heralded Players Emerge

0:00They told us to expect change. They warned us about the transition. But honestly, they forgot the best part. This is the chapter where we finally focus on us. LifeMD delivers expert menopause and midlife care right from your home. From hormone health to holistic wellness, LifeMD helps you feel your best for the best years of your life. LifeMD, it's just getting good. Visit LifeMD.com slash goodlife. The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across HR, IT, and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work.

0:50Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business, IBM. If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention.

1:31Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions. Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati Insurance companies. Let them make your bad day better. Find an independent agent at c-i-n-f-i-n dot com. Everyone has been there. Your team's feedback is scattered across emails, chats, and sticky notes. It's a mess. But PDF Spaces and Adobe Acrobat gives you one collaborative workspace to streamline every file and comment.

2:15So, if you need six departments to finally agree on a proposal, Do that with Acrobat. Need to turn a mountain of feedback into one plan of action? Do that with Acrobat. Want to stop searching for files and finally get everyone on the same page? Do that. Do that. Do that with Acrobat. Learn more at adobe.com slash do that with Acrobat. Bloomberg Audio Studios. Podcasts. Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. We've talked a lot about long-awaited return of IPO activity this year. A story on the Bloomberg noted that it minted 21 new billionaires, although many insiders have seen the value of these holdings plunge.

3:02Let's talk about the Renaissance IPO ETF. It tracks a basket of newly public companies. It's set to end 2025 with a single-digit gain shy of 7%. percent. 2026, though, presents new opportunities for IPO investors with SpaceX potentially going public. Joining us with more on this is Bloomberg Tech co-host Ed Ludlow. Also with us, Greg Pendy, Director of Equity Research at Clear Street. He covers companies that play in space, including intuitive machines and Planet Labs. Ed, I want to start with you and just get the latest on SpaceX's IPO because you and the team reporting to the company earlier this month had told employees it's entering a quiet period.

3:39What can you tell us about the latest size, the scope, the timing of the IPO? Yeah, SpaceX and the leadership team are pretty far ahead at this point in their plans for an IPO. Mid-2026, maybe June, what we've reported is that it's actually an interesting kind of change in approach from Elon Musk in particular. They want to raise$30 to$40 billion, dollars maybe even more and you'd have to do the math the valuation will come out in the wash right depending on how much the company offer but 1.5 trillion dollars on the dollar raise 30 billion to 40 billion dollars would be the biggest IPO of all time right beyond what Aramco did in 2019 the bigger question is why why do they need to raise all that money you know Musk always downplays the idea that SpaceX needs cash and he certainly doesn't like the scrutiny of the public markets But my understanding is they need the cash to buy GPUs and put those GPUs into a design for a space based data center.

4:39Wait, don't they have enough GPUs over at XAI that they can just use? You know, I don't want to punt this one to Greg necessarily, but it's the idea that in a world where we shift from training AI models to running inference, running the models, all kinds of models of different sizes, and data center capacity on Earth becomes constrained, that is the thesis, that this is an energy efficient way of doing it because they're powered by solar and it gives you the capacity. But again, based on my reporting. Hold on, hold on. I'm so confused here because you're you're in Silicon Valley right now, right?

5:16Yep. There are a couple of data centers that are completely built out there that we've written about here at Bloomberg News that are not online yet as a result of not being hooked up to the power grid at this point. So it seems like the constraint, you know, here on Earth exists before we even have to go up to space. And it's not necessarily about having the power. I mean, it certainly is. But it's funny that we're talking about solar-powered data centers in space. But we're not really talking about that much here in the US. Usual disclaimers and caveats apply when we're talking about a must-led company.

5:50But the big picture thesis, right? If you accept SpaceX's stated goal of making humankind an interplanetary species that get to Mars, then at face value with an IPO whose rationale is backed by space-based data center, you accept the bigger picture thesis, right? That SpaceX and Elon Musk see a world where there just will be insufficient compute capacity here on Earth. And a good technical solution is to do it in space. And like slightly different from a Starlink satellite, even though it's constellation-based, we're talking about ginormous scale. And we don't know anything about it. Like we have no idea how fast SpaceX is along on this.

6:29All we've reported is they need a lot of wedge to get there. You know, in a non-Elon world, I would be like, this is crazy. But, you know, Elon has shown that things can be done in a new way. I want to bring Greg into the conversation. Greg Pandy, Director of Equity Research at Clear Street. He does cover companies that play in space. And we talked about it. Tim mentioned it, Intuitive Machines and Planet Labs. I know you don't cover SpaceX. Yet, yet. But curious, do you plan to cover it when it goes public? Will it fall? Will it be something that you've got to keep tabs on? Oh, I can't really comment on future coverage.

7:04Right now, what we're focused on is really low-Earth orbit satellite companies, which are currently public, that we do cover. And as you were mentioning about data centers in space, I would just highlight Planet Labs is the name that we have a buy rating on that we really like. Now, their primary business is Earth observation. So they have cameras in their satellites, and they're mapping the entire Earth. We're talking terabytes of data daily. So the real catalyst for the stock thus far has been AI, unlocking this massive database and being able to give real insights. However, what we learned on their most recent earnings call is they're working with Google on Project Suncatcher, which is working data center capabilities off their satellites in space.

7:53And where we see the advantages, you've mentioned the solar power is a big advantage. But also keep in mind coolings, another big thing that happens here on Earth. We use a lot of water to cool data centers. obviously space, it's much colder out there. So there are unique advantages that with Planet Labs specifically that we like. How far along are they on this or what are you hearing? So the catalyst for Planet Labs, Suncatcher is a 2027 story, I believe, as of right now. Is it an Elon 2027 that could go to 2028? You know, they've thus far, Planet Labs has really executed on their expectations and hitting their targets.

8:33The big one for 2026 will be the OWL. So these Dove satellites that they have, they have 200 of them. We're talking low Earth orbit, the size of a laptop computer. They map the entire Earth every day. They've done this for eight years. So it's a massive archive. It follows kind of Moore's law. We've gone from Doves to super Doves, better resolution, but the OWL will be down to one meter resolution. And when you pair that with AI, what that really means is the images are much crisper, sharper, and you're picking up on more objects. So the AI just becomes even more powerful. Yeah, I mean, it's incredible.

9:09We've had some Business Week stories in recent years about the way Planet Labs and people just using Planet Labs data have been able to make discoveries. And the implications for defense and national security are really impressive. Stock's up close to 400 % so far this year. It's revenue opportunity, notwithstanding the data centers in space, but the imaging that they're doing right now, who are the huge customers? Yeah. So right now, obviously, you mentioned the government, but commercial use cases are still being discovered because now that people can use AI, it's more democratizing that type of satellite data.

9:47So companies like Axa Insurance and Swiss 3 are really using it. We're talking about the ability to use their planet data to price drought insurance or just to follow patterns after a natural disaster to be able to assess that damage and do automatic payouts. So the insurance industry is one we can all identify with. We've seen it creep into the finance industry. Oil traders are now able to actually track tankers in maritime and be able to predict better supply and demand patterns. You know, other areas, rainforest deforestation, climate change patterns, all very big use cases for PlanetScope data.

10:27So Greg, I'm super interested in your areas of coverage. You know, Planet Labs, super interesting as well. Farming comes up quite a lot, you know, in that space-based data center. The thing that I'm curious to needle you on is Planet Labs relies on SpaceX, right? They need that regular cadence of capacity to get into orbit. And one thing we talk about here on the West Coast is the ripple effect, the alumni ecosystem, the wake that SpaceX has left for the rest of the commercial industry. How do you model that into your coverage of the company Planet Labs? Well, I guess if you're talking about launch specifically, there are multiple launch operators.

11:04You know, we don't cover Rocket Labs, but that's another launch operator. So you are correct that, you know, the majority of the satellite operators are using a third party for launch. So securing launch windows is very important. It's something that often comes up, you know, within the companies to make sure. And we were worried during the government shutdown, just overall, a lot of launches were delayed. That looks to have been cleared up. like many americans these days greg i spend a lot of my time thinking about the moon uh you cover intuitive machines you know i recently had the first interview with jared isaacman literally after he was sworn in clearly it's a big focus why is the moon an opportunity for that company in particular sure so there's for them specifically they've already won the nasa nsn contract that's near space network contract.

12:02So their third moon mission, which is expected to take place mid-2026, it's an important one for intuitive machines because they'll actually be carrying their own satellite. It's one of five satellites that they won with this contract that will orbit the moon. So if you're going to build this permanent presence on the moon, which is the goal by 2030, you're going to need communications. You're going to need GPS. You're going to need to be able to send data. We think it's very important for intuitive machines because it's the start of a recurring revenue. You think intuitive machines can pull this off because they had a pretty tough year with Athena failing.

12:42Has the company recovered from that? Yeah. Did they have lessons from that? Are they going to be able to figure this out moving forward? Yeah, yeah, for sure. I do think that they've learned a lot. Obviously, space is very humbling. We always hear about, you know, a rocket blowing up. And what Intuitive Machines was trying to do on that particular launch, I would just note, is they were trying to go to a polar region on the moon. They were not trying to, you know, land on an easy area of the moon. It's a very, very challenging area. Think of it, you know, the difference between JFK and landing in the North Pole on an iceberg here.

13:16So very big challenge. It's never been done before. That mission, obviously, it did tilt over and land on its side. They were able to get multiple tests done, but they did not pick an easy landing spot because they wanted to be the first to accomplish that, but also because we believe there's water there. Ed Lula, I want to bring you back. You mentioned talking about Jared Isaacman, and I'm just curious, in terms of government initiatives, what more might be coming in 2026 that's going to impact, whether it's SpaceX or some of the other companies that we've just been hearing about from Greg? Yeah, so SpaceX is going to do whatever SpaceX is going to do.

13:50But the kind of mainstay of the president's strategy, other than appointing Isaacman, was basically to shuffle where responsibility lays. So NASA is kind of very focused on science and research, nascent technologies and development. What the president's executive order earliest month did that's really critical is it kind of transferred power to OSTP, the Office for Science and Technology. And what you see, you know, and we've been talking about this all day with regards to AI policy, is it's kind of putting the goals of this country, United States, both in terms of national security and what's strategically important in space, into an office and a team of advisors that the president really, really trusts.

14:36So it'll be interesting to see if that kind of allows things to move a little bit more quickly, because like historically, NASA has just been like given a budget and hands out contracts, you know, assigning funds. But actually moving things at a faster pace, this seems to be the president's strategy, put the power in the hands of a different group. Hey, Greg, before we let you go, you cover a lot of companies, not just, you know, the ones we've been talking about right now. Which one are you most bullish on for 2026 and why? Yeah, I mean, I think the high risk reward, high opportunity is intuitive machines.

15:15Lanteris was an acquisition that got them into the satellite manufacturing. We expect that to close by the second quarter of 2026. But we think it's highly accretive and it pulls forward their profitability. And then we see several catalysts. And very briefly, AST Space Mobile, you cover that company to competitor. How much of a competitor is it to Starlink? Well, they have a different approach on how they're working. So AST Space Mobile is partnering with Verizon, Vodafone, AT &T. So they're working in a partnership capacity. And, you know, I think they have much different approach. Good stuff.

15:56Love, love, love. Greg Pente, thank you so much. Happy New Year. Director of Equity Research at Clear Street. And of course, our thanks to our own Bloomberg Tech co-host, Ed Ludlow out there, Tim on the West Coast.