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Chapter 1: What acquisition is SpaceX making and why is it significant?
SpaceX is making another big acquisition, this time buying Cursor. Does that make sense long-term? Motley Fool Money starts now. Welcome to Motley Fool Money. I'm Travis Hoey. I'm joined today by Lou Whiteman and Rachel Warren. Guys, we got to start with what I think might be one of the biggest news items of the week, despite the fact that we're in the middle of earnings season.
SpaceX has made a deal to potentially buy Cursor. It's all a little bit confusing. They're either going to buy Cursor for $60 billion at some point in the future, or they're going to write him a $10 billion check for whatever they're doing together. Lou, this is another acquisition that SpaceX is making in the AI space.
Chapter 2: How does SpaceX's acquisition of Cursor impact its AI strategy?
Obviously, XAI, which includes X, formerly known as Twitter, and the AI efforts were acquired earlier this year, or maybe it was last year, but in the last year. This is another move in that direction, but it seems to be just a lot of spaghetti at the wall for a company that used to be so focused on space and now looking at a potentially $2 trillion IPO.
I don't know what this company is becoming at this point.
I'm not sure it does, either. But I can clear something up for me, I think, from my investment banking days. What's going on to reason the weird $10 billion, $60 billion? It is really, really awkward to do an acquisition right before an IPO. You have to refile all your paperwork, kind of go from scratch. It's going to delay things. They can't do the deal right now.
It's basically a, I promise to buy you after the IPO. Think of the $10 billion as a massive breakup fee, where you get something out of this either way, but that's why it's this convoluted weird thing. Yes, they want to buy it. I think what's going on with the strategy is, X is clearly behind Claude and the other models. They're trying to catch up, they're trying to add to their firepower.
Cursor likely helps XAI, but it also does add to the burden. One of the reasons Cursor was trying to find fundraising or do a deal is they need money for their own compute.
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Chapter 3: What challenges does SpaceX face with its AI ambitions?
They were kind of yesterday's news, too. I think this is both, you know, I think it all sort of makes sense, but at the same time, it is just a bunch of companies that maybe aren't front of mind in the XI race trying to join together to become front of mind again or to build something from here.
Yeah, Rachel, the odd thing is these may not be the leaders, either of these companies, but this is going to probably be one of the most valuable companies in the world. It's sort of a strange place to be.
Yeah, I mean, I think we're seeing a paradigm where SpaceX is trying to convince investors that it deserves that evaluation that's rumored to be up to $2 trillion when it goes public, very likely in June. But I think this is part of this core strategy to transform SpaceX from a simple rocket company into this massive tech engine that can really connect space hardware with AI.
And we've kind of seen this playing out, merging with XAI, obviously securing this major deal with Cursor. I think that they're trying to position themselves to solve what is still really the biggest problem facing AI today, which is really the massive amount of electricity and land needed for data centers.
We know that the long-term vision for Musk is to use Starship to launch giant orbital data centers that run on constant solar power, use the cold of space for cooling. That would move the heavy lifting of AI computing off the Earth's power grid and into orbit. This partnership with Cursor could act as a test run for that vision.
They're paying for the keys to one of the most advanced suites of AI coding tools that could really speed up their own engineering on various projects, including their mission to Mars. I think there's both a bull and a bear side here. On the bull side, SpaceX is building a space-based monopoly that no one else can touch. That's the idea here.
They're looking to combine the world's most powerful rockets with advanced AI. But there's also the bear case, right? I mean, this idea that that proposed valuation is dangerously high. There's the massive $1 billion monthly burn rate of the AI division.
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Chapter 4: How is Amazon entering the GLP-1 market and what does it mean for healthcare?
There's the very extreme technical difficulty of keeping sensitive computer chips from overheating in the vacuum of space. So I think there's still a lot we don't know here, but I do think that there is a strategy behind all of these updates we've seen recently.
Can we just put the data center in space thing to rest? It's Balderdash, and it's Balderdash for at least a decade.
But this is the interesting piece of this, because this has been a Musk strategy for two decades at this point. I remember, you know, I followed the solar industry very closely, and when... Tesla announced that they were acquiring SolarCity. Remember, that actually coincided with SolarCity announcing that they were going to make these solar shingles.
Solar shingles have been a concept and an idea for decades before that. The people that I talked to in the industry said,
Chapter 5: What logistics advantages does Amazon have in the pharmaceutical space?
Look, we've been trying to do exactly what they announced for a very long time, and it is either extremely costly or it just doesn't work. So either they've figured something out or this isn't real. And it turns out it wasn't really real. And so it seems like a playbook that we've seen before.
Now, you could make the argument that that actually worked out well for SolarCity shareholders because Tesla stock went up. But For SolarCity shareholders, sure. For SolarCity shareholders. But the operations never really turned out to be that vision that Musk was playing out. And this is a totally different case because we're not buying a $10 billion, $20 billion company.
This is potentially a $2 trillion IPO with promises that don't have... I think they've even said in their filings... potentially don't have commercial viability.
Right. And before we get letters, let's just spend a second and explain, because we will get letters, how dare you. And no, I'm not a rocket scientist, but I can tell you that, look, for one thing, we don't really have the materials that we need to protect a data center in space from the radiation. The International Space Station
would melt up if it didn't go behind the Earth and hide from the sun every 12 hours to cool down. The idea of 24-7 power, because this thing would just be sitting out exposed to the sun 24-7, we don't have the materials to do that. By the time you get the radiators needed to dissipate heat in a vacuum, It's the same problem that they've experienced with Starship.
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Chapter 6: How is Meta using AI to track employee performance?
When you try with a simple concept, why don't we do this, and then you realize you have to staple 3,000 different things onto it, and that's why other people weren't using that concept, because it's a lot more complicated than your one-page white paper. By the time you start adding
all of this, you have this massive, expensive contraction up there that I don't think we have the physics to do right now. Even if we did, it would be so massively expensive. It'd be cheaper, honestly. If you really want to talk about where we need to put data centers, put them on the bottom of the ocean. The fact that we haven't done that when it's so much easier should tell you about the tech.
But Elon Musk doesn't already have an ocean company. That's fair.
But seriously, you talk about the costs.
Chapter 7: What ethical concerns arise from Meta's AI tracking of employees?
I don't know what XAI runs, but I know what the other hyperscalers run per month. If you think about the massive cash needs there, they've spent $5 billion on Starship so far. How's that going? There's still more money to spend. You add on cursors, computer, whatever. I think the IPO is going to be a huge success. If anything, I think it could squeeze higher. I don't know. Why not?
$5 trillion valuation by the end of the summer?
Chapter 8: What future implications does AI tracking have for the workplace?
Why not? But I really wish that instead of getting this massive valuation, maybe they'd sell more shares except a lower valuation and build their cash pile because they're going to need it.
Yeah, it's going to be very interesting to see what happens in the secondary market, because that is potentially an option. Maybe they go public with a relatively short float, stock moves higher, and then you sell a whole bunch of shares and raise $50 billion, $100 billion. The numbers are getting wild as these stories get bigger and bigger.
But lots of questions about their operations as they head to public markets. When we come back, we're going to get to Amazon moving into the GLP-1 market. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. Amazon announced this week that it's getting into the GLP-1 game. The company is bringing GLP-1 pills and pens, as they're now known, to its platform.
This doesn't necessarily include the prescriptions. You can just get your access to GLP-1s. You can also go through the Amazon prescriptions. But Rachel, this is interesting because Amazon keeps moving more and more into the medical field. You can get more and more of your prescriptions there. who are they, what's the goal here, and who are they ultimately going after?
Yeah, this is a really interesting bit of news. I mean, it's a major shift. I think one of the things that Amazon is looking to solve here is to fix one of the messier parts of healthcare, which is getting the actual medication to consumers. And Amazon's really leaning into their strengths as a logistics and pharmacy powerhouse.
So under this new program, if you have an existing prescription for a GLP-1 medication, or you go and visit Amazon, A doctor through One Medical, either virtually or in person, can get a prescription for a GLP-1. And Amazon is going to help facilitate that process of getting it to you as the consumer.
You know, bringing GLP-1 pills and pens directly into the Amazon pharmacy ecosystem, they're really cutting out the middlemen. They're focusing on the supply chains. You can see how this could be more disruptive to your traditional pharmacy chains like CVS, per se, than necessarily the telehealth companies we think of, right, like HIMSS and Rho.
I think the strategy here is to really leverage the trust and speed that people expect from Amazon delivery, integrating these medications with existing One Medical Clinics and pharmacy hubs. There's going to be thousands of cities where Amazon is now going to be offering same-day delivery of JLP1. I read they have plans to expand that reach to up to 4,500 cities by the end of the year.
And I think the bottom line here is Amazon's betting that customers are going to choose reliability, fast shipping over maybe the niche branding of smaller telehealth startups. They have hundreds of millions of Prime members. They have a delivery network that no startup can really match. They offer lower prices.
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