Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the main topic discussed in this episode?
Gavin Baker, welcome to the show. How are you doing? Yeah, fantastically, right? SpaceX IPO, it seems like everything went just flawlessly to a T, like to the point where it wasn't even dramatic.
Let's give a round of applause for the bankers.
The bankers, like 20% perfect. 20% pop almost to a T. Yeah, what I mean by that is like, it would have been more dramatic if it had like popped up 70% and then went down 30 and then went up 50 and it was drama, but it was just like perfect execution from start to finish.
Chapter 2: What are the highlights of the SpaceX IPO?
Was that how you interpreted it?
I thought Goldman Sachs and Morgan Stanley did a very good job.
What do you think the market is looking for SpaceX next? Is it all eyes on the first earnings report? Where do we go from here? Because there's so much of the SpaceX story pre-IPO that was a decade out, five years out, two years out. But is the market going to be processing quarter by quarter plays like many other companies?
Well, I think the market is always, you know, quarters matter. You know, the runners on X, you know, it's like they're these reply people on X for any topic or experts. But somebody once told me a marathon is 26 one-mile runs. And so, you know, and then all the runners were like, no, that's not true at all. You know, obviously running a mile is different than running a marathon.
But, you know, every quarter matters. But at the same time, I do think if you look at how, The market has looked at Tesla over the last five, six years, Amazon during the days when they were building out AWS, and then their retail distribution infrastructure when they'd go through these investment cycles. I do think the public market has a much greater tolerance
for investment and a much longer time horizon than a lot of people in the venture ecosystem give it credit for. By the way, this is Foxy in the back. He's one of the analysts here at Atreides.
I was just listening to him on the Brad Gerstner podcast. I think he chimed in on that, right? You brought him with? There we go.
Yes, he did. But he did the work on SpaceX, so I thought you guys might want to talk about that. But I do think... I'm not sure the story is as far out as you made it seem to be. I think there are two variables that are going to matter a lot over the next year. The first is just how quickly can they bring on terrestrial compute?
It does seem like they monetize gigawatts at a higher rate than anyone else. And we know from Jensen that they bring on data centers faster than anyone else, per Jensen's words. And everyone in the ecosystem is really incented to get land power in the hands of people who can energize it because everybody starts making more money when the GPUs are energized.
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Chapter 3: What does Gavin Baker see as the future for SpaceX post-IPO?
So, you know, if they can, what was the altimeter figure for what they were monetizing gigawatts at, Foxy, do you remember? For which deal?
well i think it was like two to three wasn't it like at least two times higher than like average neocloud pricing and that's partly due to scale and customer quality and things like that but it was meaningful yeah so they're doing 50 billion a gigawatt on the google deal so how quickly they can add gigawatts really matters yeah right if you can energize two three four gigawatts yep
in the next year, that's a lot of revenue. Now, you know, prices may go up, they may go down, but that's really going to matter.
So all eyes on Colossus 3, 4, 5, 6, 7, 8, 9, 10, et cetera, at least in the short term.
Yeah, or macro hard, macro harder, macro... Hardest. To that, yeah, macro hardest. Yeah. And then I think cursor is another big variable. You know, we talked about it with Brad about how Composer 2.5, after three weeks of, you know, RL and supervised fine tuning Colossus 2, is kind of Pareto dominant. So what's going to happen when it's applied to a bigger, better base model?
I do think Cursor being in, you know, half the Fortune 500 is interesting. So I think those two things, you know, while I mean, I'm super excited for going to Mars and asteroid mining and, you know, a city and mass drivers on the moon, like all that stuff is awesome. And I think there's a decent chance it happens in my lifetime.
just think there is there's much more tangible near-term drivers here yeah how do you think about the tension of the cloud business versus their own application and and model business uh i think a lot of people were surprised when the initial anthropic deal happened purely because uh knowing michael true he would have been very excited that's my compute yeah yeah get access it's like hey you gotta share
It's not an only child around here. And it feels like you can imagine SpaceX bringing on a lot more compute very quickly. But at the same time, every lab has had to go through this tension of how much compute do we allocate to training versus inference. A way to interpret that is that maybe the team at SpaceX is pretty confident in their ability to bring gigawatts online. Yeah.
And the Altimeter figure that they've ordered 20% of the Rubens, and the Ruben is an epic chip. Like Blackwell, it was really hard to get it online. Ruben is kind of a more drop-in replacement. It's a really, really good chip. You'll have the Grok LPUs integrated at some point in the next six, nine months. Yeah.
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Chapter 4: How is AI infrastructure reshaping capital markets?
I wanted to ask how... On the meta thing, I think there is one point that's important. What ultimately drives behavior for all these big cap companies? Getting to AI, I think that does feel existential for all of them. But the stock price also really matters. Because if the stock goes down, you gave people a grant at this price, stock goes down, your engineers are unhappy and it's tougher to get.
to where you want to go if you don't have, you know, these, you know, now forget the 10X engineer, people are talking about the 10,000X engineer. You know, you're not going to get there if you don't keep those 10,000X engineers. So just, I think, like, we'll see with Meta. Yeah. How did this IPO update your general kind of framework for the role that retail is playing in capital markets?
It was very funny last week to see people say like, oh, the IPO is only 2x oversubscribed by retail. All these other $3 billion IPOs were 10x oversubscribed. It's like, no, we're talking about a very order of magnitude difference here. $100 million of demand.
But it still feels like retail is going to play a very, very important role over the next 12 months, maybe more so than ever, given that the hyperscalers are now running cash flow negative. You have the conflict in the Middle East, right? There's rebuilding efforts that needs to happen. And so I feel like retail, this is kind of retail's moment now, maybe more than ever.
Yeah, well, so a few things. One, people say retail in a pejorative way, and I would just say stupid is as stupid does. And like, you know, we track, you know, there's all these indices of retail favorites. And man, they're up a lot. And they're up a lot in 25, and they're up a lot in 24. You know, so kind of stupid is as stupid does. So I'm not, you know...
I think retail is probably outperforming the overwhelming majority of professional money managers, whether they're private equity managers, venture, public equity managers, whatever. So retail, I don't think it's a majority. I do actually think in the case of... SpaceX, I'm not sure, you know, you process so much information, I'm not sure where this comes from.
But I actually think after the IPO, you know, for whatever reason, some of that retail stock may have gotten allocated to people who were flipping it, because my understanding is there was more institutional buying. I don't know where this, after the IPO, there was retail buying. Now, I'm sure, you know, retail is very sensitive to momentum, so maybe what's happening today changes that.
But I think another really underappreciated thing about the SpaceX IPO is that over 10,000 SpaceX employees bought on the IPO. And that's just, you know, everybody does all these lockup analyses and, oh, how much stock is going to come
come to market and you know for sure there's all these triple-layer SPVs or whatever you know maybe there are there are people speculate there are uh... and i'm sure some of that will get unwound but the reality is is that SpaceX employees own a lot of this and if you're an employee or even if you're an investor who has an SPV or you're directly on the cap table you've had a chance to sell every six months for the last ten years
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