THIS WEEK IN AI: SpaceX IPO TODAY, AI 1 Satellite, Claude Fable 5

**Josh** (0:00)
The question on everyone's minds, should you buy the SpaceX IPO? By the time you are hearing this, chances are SpaceX is about to go public, or they have just gone public at what is going to be the largest IPO in history, and it's not even close. I think we have very strong takes and opinions on where SpaceX goes. I find the question that everyone is asking me is, should I buy, is this overvalued? It's going to be trading, I mean, right now, close to $2.1 trillion beforehand. That's an outrageous valuation. And I feel very confident if some pretty good takes that are going to point in the direction of, actually, yeah, not only is it a good buy, in fact, it's undervalued. And a lot of the news that we got this week from the S1, from the new SpaceX releases backs that up. So there's a lot of really strong prevailing winds pushing SpaceX forward. And we are going to now address the question, should you buy SpaceX shares? Should you get invested in the IPO? And more importantly, why?

**Ejaaz** (0:54)
Yes, the answer is yes.
But before we get into it, let's talk about the numbers of the IPO very quickly. So they're raising $75 billion, which is three times larger than the largest IPO that has happened so far. That was from Saudi Aramco back in 2019, and they raised just under $30 billion. This is roughly around 3X that, but the demand for the $75 billion raise is already 4X. As you're seeing on the screen, there's over $250 billion worth of demand with one institution or a couple of multiple institutions offering up $10 billion chunks just to get involved here. Now, if you're looking at the price per share roughly, SpaceX's S1 prospectus has put it at around $135 a share. Now, what's interesting about this is typically with an IPO prospectus, you provide a range. You provide a range and you try and find where the match is. SpaceX just went right to the high end of that range and said, it's $135 per share, which values it at $1.75 trillion. But recent reports from Financial Times and Bloomberg says that this number is actually now close to $162 per share, which gives them a crazy $2.1 billion valuation. Now, the demand for this thing, Josh, is absolutely insane. They reserved, I think it was around 30% of the share allocation that they're IPO-ing with for the retail, for the regular average person. And that was distributed to the likes of financial institutions, like Charles Schwab, as well as brokers such as Robin Hood. And the demand initially required you to have something crazy, like half a million dollars in your bank account, in some cases, to get access to this thing. But they reduced that kind of limit. But it is the most in-demand thing. SpaceX is the most in-demand company in general, whether it's just to buy the IPO or whether it's just to work there. It is a crazy scene that we haven't seen before. Largest IPO raise ever.

**Josh** (2:46)
Yes, and it is also by far the most accessible IPO ever. We mentioned this in a previous episode, 30% of the entire share float is being made available for the public, for retail, as a part of this IPO. This is three to five times more than the average, and that means that a lot of people are able to participate. So there's a chance if you're watching this, you've actually been allocated IPO shares of SpaceX at the listing price. You don't have to pay that premium. We're gonna see the market making happen today as you're watching this to see what it's actually gonna launch at, but I suspect a lot of people watching this episode are actually already shareholders and owners of SpaceX, and that's such a cool thing that everyone is able to participate. Now, in terms of the valuations of SpaceX, why we believe this is undervalued, why we believe SpaceX is going to be such a remarkable company, there's a few pillars. The first is Starlink. It is internet in space from the sky.
The second is manufacturing, their ability to manufacture Starship and get payload to orbit at a very low cost per kilogram. And the third, which is one that I really wanna talk about right now, is AI data centers in space. We've talked about this a lot. What does this look like? How does it work? Well, earlier this week, we finally got an answer, and it comes in the form of a satellite named AI-1.
AI-1 is the satellite that SpaceX is going to park on Starship, send into orbit, and actually put these things into space. And they're going to be training data centers, they're gonna be beaming data back down to Earth, and now we finally have a rendering, and we have some specs on what it's gonna look like. In terms of power, there is a 150 kilowatt peak with 120 kilowatt average on each one of these satellites. For reference, that's about 100 American homes worth of power per satellite.