SpaceX Joins Battle for Control of $26.5 Trillion AI Market

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**SPEAKER_2** (0:08)
This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec. On Bloomberg Radio.

**Carol Massar** (0:31)
I'm interested in the kind of read that we're getting on the software sector.

**Tim Stenovec** (0:35)
Yeah.

**Carol Massar** (0:35)
At least from the workday results, because now I cover private credit, Tim.

**Tim Stenovec** (0:40)
Oh yeah, and private credit, software is big for private credit.

**Carol Massar** (0:42)
Yeah, software, it's just been such a big trade in the market that investors, they want to sell software because they think it's going to be completely disrupted by AI. What these companies really need to do is show that they're integrating artificial intelligence instead of being disrupted by it.

**Tim Stenovec** (1:00)
Okay, the perfect segue to getting to Ed Ludlow, Bloomberg Tech co-host who joins us from our San Francisco Bureau. Ed, we want to talk NVIDIA and so much more. I mean, we're going to go like very lightning around here because we only have seven minutes, but we have a lot to talk about. NVIDIA is facing some investor skepticism. I know you were on the call last night. Jensen spoke repeatedly about entering the sort of agentic era of AI.
Explain what that means to people who don't have agents acting on their behalf right now.

**Ed Ludlow** (1:30)
Yeah. An agent is just an AI tool that can act on your behalf. It is genuinely autonomous. What we've become accustomed to is generative AI, a tool that can create text, images, video. It creates something where the input is your prompt in text format. With an agent, what you're talking about is a piece of software or tool where you can say, okay, you have availability to a piece of software or a system, and I authorize you to make an action, do transactions, financially speaking, or book me on a flight, and you don't have to run it past me.
Present day, where that's most commonplace is in software engineering, coding. The idea is if you are a software engineer and you need to write a very large body of new code, instead of just doing it yourself, you go to bed and you wake up the next morning and the agent has done it for you. Then it's incumbent on you to check that work. That's kind of what we're talking about in real terms.

**Tim Stenovec** (2:25)
So give us a gut check. Is it set to go mainstream?

**Ed Ludlow** (2:29)
So the problem is right now that NVIDIA's revenues are dominated by the hyperscalers. This body of activity is everything else, right? Yes, the hyperscalers have some involvement in what's happening in AI agents. And when we say AI agents, it's also the inference phase, right? You're not training a model anymore. You're running it. You're asking it to do something.
It's the bit beyond the hyperscalers. Other types of software company, types of technology company that are building their own data sensors on premises. And basically, the market just didn't really buy the longer term story. They looked well past the numbers in the quarter gone and in the projected quarter. And then they just said like, what is the story next?

**Carol Massar** (3:07)
Well, tell us about what is the story that SpaceX is marketing to potential investors.

**Tim Stenovec** (3:12)
I told you we're going everywhere.

**Carol Massar** (3:13)
We're going everywhere. And you have a piece out today with Bailey Lipschultz and Carmen Arroyo about just exactly how they're not just marketing themselves as a space company but an AI company.

**Ed Ludlow** (3:23)
Yeah, $26.5 trillion.
That's the total addressable market that SpaceX is telling investors that it's going after, largely in selling AI to enterprise companies. And they are super clear in this S1 filing that even though that's the big goal for them, like we focused a lot on Starlink, which is their constellation based internet and direct to sell service. They are telling us in this prospectus, that's capped at about $2 trillion, as well just $2 trillion. But you know what I mean, the rest of it, the $26.5 trillion is something that doesn't yet exist, but it is what we were talking about, this agentic era. It's them saying that will be the mainstay of our business.

**Tim Stenovec** (4:04)
I mean, it's so interesting to see that given that just a few years ago, Ed, we were talking about how Starlink was such a huge opportunity for SpaceX. And now with the integration of XAI, they're essentially saying, well, the biggest opportunity for us is deployment of the AI tech.