The SpaceX IPO: a16z’s David George & Elon Musk’s $1T 6/12/26

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0:59This is Squawk Pod, and I'm CNBC producer Cameron Costa. On today's episode, the SpaceX IPO lifts off. If people had told me this was going to happen, I was like, man, you must be smoking some really good crack. Two, one, ignition. Engines full power and lift off of Falcon 9. Go SpaceX, go Starlink. To all SpaceXers new and old, let's see what's out there. Occupy Mars. Andreessen Horowitz general partner David George took a bet on SpaceX back in early 2021. And he is still betting on Musk. The way I think about SpaceX is this is the best entrepreneur of our generation in Elon. And he's going after two of the biggest markets of all time, space and AI.

1:46And what can we expect after the first trade? What it might mean for the mega IPOs still to come, like Anthropics and Open AIs. Tenacity Ventures, Ben Narison. If SpaceX doesn't fly, you're going to see a huge stall for everything else. And it could put a true chill on the market. If it pops, everybody is just popping champagne. So we're awaiting the first trade and we're awaiting the world's first trillionaire. CNBC's wealth reporter Robert Frank is crunching the numbers. It all depends on SpaceX shares staying above$140 a share, probably. It is Friday, June 12, 2026, and Squawk Pod begins right now.

2:31In three, two, one, cue it please. Good morning and welcome to Squawk Box here on CNBC. I'm Melissa Lee along with Joe Kernan and Andrew Ross-Dorkin. Becky's off today. Some context on the SpaceX IPO trading set to begin later today. We told you the company raised$75 billion in its offering, the most ever. Prior to that, 71 IPOs had already priced this year, and those altogether raised$36 billion, which is less than half of SpaceX's haul. If we get another mega IPO this year, like OpenAI or Anthropic, the total would likely, obviously, skyrocket again. Well, as he prepared for SpaceX's IPO, CEO Elon Musk took some time to focus on a critical cog in the semiconductor economy.

3:14Musk spoke to employees of Europe's ASML during the company's annual technology conference. ASML is the only company in the world that makes the machines needed for an advanced printing process in chip making. In addition to his other projects, Musk is currently working on a huge chip fabrication plant in Texas known as TerraFab. ASML's products will be critical to that effort. Earlier this week on X, Musk posted, ASML should be treasured and supported. It is arguably the greatest company in Europe. All right, for more on the SpaceX IPO, let's bring in somebody who loves rockets and airplanes and defense stocks, CNBC's own Morgan Brennan.

3:53We didn't have to beg you to come in here. I mean, you were ready to go because I saw you about 10 minutes ago. I'm ready for liftoff, Joe. That's good. All right. Yeah, huge moment. Ten years ago, I think a lot of folks on Wall Street and elsewhere were not necessarily taking any of this very seriously. and what a difference those years make. So I sat down exclusively with SpaceX President and COO Gwen Shotwell. Wide-ranging interview from the company's headquarters in Starbase, Texas. This was just ahead of the roadshow last week. The$75 billion that SpaceX is raising will go toward building out a vertically integrated full AI tech stack.

4:31It's going to stretch from Earth to space. And for a company that rarely did M &A in its first two decades plus, that really started to change last year. So first, you had that$17 billion to acquire EchoStar Spectrum to boost Starlink's device-to-device offering. And then you had the absorption of XAI for$250 billion in February. And recently, that deal with AI coding upstart Cursor, that includes an option to buy post-IPO for$60 billion in stock. So I asked Shotwell what Cursor enables for SpaceX. Cursor has their own models, I think, and we can learn from them. They're learning. They're looking at our models.

5:09were looking at their models. Their data set was, their training data was incredibly, it was excellent. And so that's good. And we have compute. So basically it ended up being kind of another model company that we could collaborate with closely. And that's fundamentally how I would characterize it right now. We're going to collaborate closely. We think this makes a huge amount of sense, but we'll make final decisions in a few months. In general, the approach to M &A, How should investors think about that, especially given that disclosure in the amended filing that the company, quote, may issue a significant amount of equity in connection with future transactions?

5:49You know, we weren't really an M &A company. SpaceX wasn't an M &A company for decades. And so it's kind of a new, exciting. It's a new, exciting world for us. I do think M &A is in the future, especially when you look at the AI world. I think you'll see more of that just generally. There's a lot of speculation that SpaceX could merge with its sister company, Tesla. This is just one example of some of the notes that are circulating right now. This is Dan Ives from Wedbush. Continue to believe that SpaceX and Tesla will eventually merge 80 % plus chance, in his view, into one company in 2027 and that the groundwork is already in place for both operations to become one organization.

6:30Your response? That might make Elon's life a little easier, actually. There's no question that there's synergies between Tesla and SpaceX and our futures. Definitely, there's a convergence of kind of what we're all trying to accomplish in the future. But right now, I'm focused on keeping the lights on here, keeping rockets in production, flying rockets, flying people, getting to the International Space Station, and critically providing broadband to folks that don't have access to that critical capability. So I'm really focused on that. I'm not focused on that part of the future. All right. So not a yes, not a no.

7:10Tesla owns a stake in SpaceX through XAI. The two have worked together often over the years, and they now have this TerraFab mega project together that they are partnering with Intel for to make those advanced chips, build out the compute. Tesla's CyberCab, RoboTaxis have been installing Starlink minis since you need that uninterrupted connectivity to fully realize autonomous driving. And then when you go to Starbase, the cyber trucks are everywhere. SpaceX accounted for, now this estimate is, according to Barron, it's based on the prospectus, up to 8 % of Tesla's U.S. cyber truck sales last year.

7:42Governance, guys, also plays a huge role in all of this, and we talked about that. So I will bring you some of that piece of the conversation from my exclusive sit-down with Shotwell a little bit later. In the meantime, for folks that want to dive into all of it in its entirety right now, we have the full interview on CNBC.com and other coverage as well rolling out in real time. Morgan, it's a big day for Gwen, obviously, and a lot of people involved with SpaceX. It was funny when we saw the list of, you know, billionaires that were going to be created, and a trillionaire in this case. that Gwynn was at one and three quarter billion or something.

8:26And we actually made the point we thought it would be more. And that maybe she, you know, she can't go absolutely crazy. I mean, she's still got to, you know, just watch, you know. I mean, it's a lot. But did you talk about that at all? Great day for everyone involved, obviously. Great day for everyone involved. And certainly one of the things we talked about, why the decision to go public now. And she was she was very plain spoken in saying this is about capital. but also that it is about giving more everyday Americans, and to use the term that she used, friends, the opportunity to invest in SpaceX as it continues to grow and build out this future that ultimately, according to Elon Musk's longstanding and, I would say, very consistent vision of making humankind multi-planetary, those are the two kind of key reasons that they're taking this company public now.

9:19But along the way, to your point, a lot of folks within the SpaceX workforce, which is 22 ,000 full time workers and counting right now. By the way, they're still hiring. We talk about AI taking jobs. They're hiring. They can't get enough workers that many of those folks do own SpaceX stock. And so you've seen the reports leading up to this about how many millionaires and in the case of Shotwell and others, billionaires that are going to be minted by all of this. The other thing, of course, from a stock specific standpoint to watch is going to be this tiered lockup structure. And while some folks are going to be able to start selling shares right away and others in tranches and over the course of many months, you know, senior leadership.

9:57And this starts with Elon Musk are going to be tied up for 366 days as well. But keep in mind with Musk specifically, he doesn't tend to sell stock in the companies that he is building. When we have seen that happen at times over the years, it's because of some bigger investment or projects like acquiring Twitter for and building out XAI a couple of years ago. So huge day for that workforce, including Shotwell and others. But I also think in many ways the start of something much bigger for a company that 24 years in the making is really just laying the groundwork for this massive future that they are laying out.

10:39Yeah, as big as space itself, which is... Unbound, vast and unbound. Right, exactly. All right. Thank you, Morgan.

10:53Our next guest is one of Elon Musk's backers, early backers. In fact, David George, general partner at Andreessen Horowitz. He leads A16Z's growth investing team. David, great to have you with us. First investment early 2021. So you saw the vision even back then. What do you think has changed in terms of the attitude towards space as a business, as an industry since then? And what triggered the change? Yeah, absolutely. Well, first, thanks for having me. It's great to be here. Exciting day. Yeah, when we first invested in SpaceX, Starlink was in its very earliest moment. They had just gotten satellites into space.

11:29But at the moment, we could see that it felt like all of the physics problems were solved in launching satellites to space and then providing the service down to space as a telco service. Today, there are some parallels with where we are with AI data centers and, you know, know, the position they're in, in terms of having kind of de-risked all of the physics components of it. And now what we see is sort of execution questions remaining. So when we invested, we felt like, OK, this is classic Elon. Elon can sort of take things that seem impossible, solve them technically, and then execute the cost down so that he is the low cost provider.

12:08And that's sort of where we are with Starlink today. So what are your thoughts on this idea of a total addressable market in the prospectus? I mean, it almost seems tongue in cheek. I mean, I know it's a real number and it's in there, but space is infinite. So can you wrap your head around twenty six and a half trillion dollars? Yeah, I can. Look, the way I think about SpaceX is this is the best entrepreneur of our generation in Elon. And he's going after two of the biggest markets of all time and two of the most important markets in technology for our society. So space and AI, if you look at space alone, the launch business is an extraordinary business.

12:43They have demonstrated things that no one else can do. They can send a starship, which is the size of a football field, effectively up to space, land it back on Earth with the chopsticks. No one else is close to being able to do that. In terms of the telco business, yes, the total addressable market of that is probably$2 trillion. And they have gotten to the point with their scale where they have a cost advantage going forward. So on the space side, yes, it's an enormous addressable market. and they are in an excellent competitive position. On the AI side, they've demonstrated a couple of different ways to win.

13:19So one of the things that we're super excited about is obviously Colossus. They are the only player that has gotten a one gigawatt plus data center live in the U.S. and the world. And that's an extraordinary technical achievement. Obviously, there are great business results that come from that. But technically, they're executing very, very well. Andrew has a question. Hey, David. Congratulations on the investment. I mean, it's a remarkable, remarkable thing. My question was going to be how quickly you plan to sell. Would you sell? Given what your firm does, you typically don't hold public equities for extraordinary amounts of time.

13:55But how do you think the public should think about that? Andrew, great to see you. You know, obviously, you know, we're long term investors. We're investors from the private markets predominantly. We're excited about the long term. You know, obviously, we're subject to a lockup. so I'm not going to talk much about exiting. But we're very bullish on the long term. I think there are many ways to win for SpaceX from here. The way I look at it is they have extraordinary competitive positions in space and in AI. And then there are many sort of elements of optionality, which I think are super exciting.

14:28So obviously we talked about Colossus and the data center opportunity. We could talk about AI directly. We could talk about AI coding. And then, you know, obviously, you know, big swing is going to be TerraFab. where they have probably the only opportunity to create a new chip company in the technology market, given they have a captive customer base with both SpaceX and Tesla. So we're very excited about their setup competitively and the long term setup for them. I don't know if I'm getting ahead of ourselves, but would you be an advocate of a transaction that would involve SpaceX using its share price to buy Tesla?

15:04You know, look, there are many different paths that SpaceX could take. I would say this about historical transactions and capital allocation. SpaceX has been an excellent steward of capital and great with shareholders. They have done acquisitions in the past that make business sense and strategic sense. So obviously, you know, we backed we backed Elon and his purchase of Twitter. We backed Elon, you know, in the first institutional round of XAI. And there's you know, those have come together with SpaceX because they make business sense and strategic sense. So over time, you know, it's impossible to say what's going to happen.

15:40But if there were something that made business sense, you know, we'd be supportive of the shareholders. We have seen a pipeline of space companies. Some have already gone public pre-SpaceX. And so they're rushing out there. And I'm wondering if this has sort of spurred sort of renewed interest in that in terms of investing early in space industry companies. Yeah, it has. Look, we've been very active investors through our American dynamism practice in space. I think it's an enormous opportunity. If you want to be a leading space company, you need to have access to get things to space. And that's part of what gets me so excited about SpaceX is they are the low cost leading provider of launch and getting things to space.

16:21My expectation is, you know, over the over the coming years, that cost of getting things to space will probably be reduced by a factor of 10x again. And the exciting element of that, which we've seen in all kinds of technology markets, is that will lead to massive growth of sending things up to space, both first party and third party. So it's like the railroad. Yes, exactly. Back when the railroad started. And look, the railroad enabled lots of different businesses to be built on top of it. And similarly, SpaceX will build a lot of those businesses themselves, like orbital data centers, but that will also enable third parties to build businesses on their own as well.

16:55But how should we think about the liquidity going to SpaceX and to space economy companies and what we've seen in Bitcoin and other areas of the public markets where we've seen liquidity get pulled out? Do you see that as sort of like a competition for hype capital, so to speak? I'm not sure about that. I think it's great for companies like SpaceX to be public. I'm most excited about the opportunity for broadening the shareholder base. I think this is probably going to be the largest retail offering in history. You know, the retail component of this alone will be among the biggest IPOs ever. And I think that's a great thing.

17:31David, great to speak with you. Thank you. Cheese will be next. Coming up on Squawk Pod, the biggest IPO ever. But we may have seen this movie before. At least venture capitalist Ben Harrison thinks so. This IPO basically rhymes with Facebook. You know, Facebook had a visionary leader that everybody wanted to bank who insisted on a price. That offering did not do well for quite a while. It did come back. The long and short-term view right after this.

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18:55Seriously, all of it. And we trust you to make smart decisions. After all, you listen to this show. See terms at discover.com slash credit card. Trading at Schwab is now powered by Ameritrade, bringing you an expanding library of education with even more ways to sharpen your trading skills. access new online courses insightful webcasts articles engaging videos and more all curated just for traders plus guided learning paths with content designed to fit your unique interests and no sifting to find exactly what you need so you can spend your time learning to trade brilliantly learn more at schwapp.com slash trading spacex isn't just going public it's testing investor appetite for the next generation of AI and tech giants.

19:42The market's reaction today could have a direct impact on how quickly companies like Anthropic and OpenAI move toward their own market debuts. Andrew Ross Sorkin spoke with Ben Narison, Tenacity Venture Capital founder, on this very issue. How important is how this all goes today in terms of what comes next? I think it's absolutely critical. If SpaceX doesn't fly, you're going to see a huge stall for everything else. And it could put a true chill on the market. If it pops, everybody is just popping champagne and running to push their stuff out. We'll see a tremendous amount of IPOs, not just OpenAI and Anthropic, but a lot of other great companies.

20:24Do you see a way in the short term for the company, for the stock not to pop? Absolutely. But the reason I ask is if you have these index funds, which in the next five days are going to be buying, rotating out of whatever they have to to get cash to actually buy this, walk through the permutations of how you see that. So those are the two best reasons you won't see downward pressure are, one, the early listing in the major indexes and people's need to place those in their ETFs, etc. The other is the sort of fanboy, fangirl effect, and that includes people that I think are phenomenally intelligent like Ron Barron, and obviously Blackstone announced today they're putting a$5 billion check in.

21:07But there is so much. This IPO basically rhymes with Facebook's. You know, Facebook had a visionary leader that everybody wanted to bank who insisted on a price. At that point, it was$100 billion. Elon's done the same thing. They did it without price discovery. The opening was delayed pretty significantly, and I suspect this one will be as well. as market makers tried to match. That offering did not do well for quite a while. It did come back. Look, I am a long-term buyer of SpaceX. I think it's gonna be a phenomenal company. But there are so many systematic issues right now that I think are gonna put pressure on this stock.

21:43I have no idea how many people that wanted allocations want them for a flip. You know, every banker tells you they're gonna get you long-term holders. Our bankers told us the same thing. But then people are out there selling from the opening bell. So I think there's a lot that reminds me of what happened before. And I think there's a pretty good chance. I'd say at best, it's a coin flip. It's not what the polymarkers of the world are saying, but I think it's a coin flip whether this ends up up or down. Well, you just said you'd want to be a long-term holder. Does that mean that you plan to wait because you think there's going to be another opportunity to get it at a better price?

22:12Absolutely. I mean, look, even if it holds today or pops, the lockup expiry, I know they have a staggered lockup and lots of different pieces to that. But in six months when everybody gets released, oof, I don't see that being a great day. So that could be a great buying opportunity. Look, the people that are going to make really good money here are the long-term holders, the Buffett-style mindsets, the Ron Barons of the world, where they're going to buy and they're going to hold and they're not going to worry about the vicissitudes of the market. But the problem is I have no idea how the Robinhood bros of the world are going to handle this if it doesn't go well.

22:44If it trades down, it's going to turn into a pretty aggressive downward spiral, I would assume. And do you think that's something that takes down not just IPOs more broadly, meaning the anthropics and open AIs, but the broader market? Well, I think it puts a pause on the IPOs that people are so excited about. You know, we've talked about this before. Bankers are motivated by greed and fear. Now, here greed equaled, as we just heard, half a billion dollars of fees. Not too shabby. The fear is that if your clients lose money too many times, they don't buy your offerings anymore. And so if clients take a bath on this one, I'm not sure how quickly bankers are going to be willing to push out the next one.

23:23Whether the broader market takes a hit, I don't know. I mean, people, quote unquote, rotated out of tech to be able to have money to buy into SpaceX, or that was the theory. So maybe they move right back into it. There's no better category to invest in. I mean, it's not like you're going to say, oh, what's as good as tech? I don't know, oil and gas? No. Tech's where the future is and where all the great growth is. These companies are phenomenal. When you think about some of the incentives, alignments and misalignments in terms of how IPOs like this go today, You look at the retail piece of it, the 20 percent instead of 30 percent.

23:53You had a lot of we talked about BlackRock, you know, taking a big piece to this. I imagine, you know, when you take a big piece on one end, you're also hoping to get something on the other end. You added JPM and Morgan Stanley and Goldman Sachs. How should we try to understand sort of the behind the scenes of all this? Well, another thing that gives me a lot of pause is the significant amount of retail exposure. Not just that it was made available to retail. I like that. I think it is very fair to give people the opportunity to participate in IPOs. In the old days, people would literally open multiple accounts with multiple.

24:25They would go to Goldman or whichever firm they could go to and they'd open like 12 accounts and they'd ask all of them for an allocation in an IPO because the IPO would pop and they'd sell immediately. But I do like the idea of giving retailers, retail buyers, the opportunity to buy in. What I find disheartening was when one of the major banks announced that they would drop the minimum threshold of assets from half a million dollars down to$2 ,000. dollars. So all of a sudden you're basically saying, you know, as long as you've got two sticks you can rub together long enough to build a fire and then sell hot dogs for a week, you can be in the SpaceX IPO.