Closing Bell - Manifest Space: IM-1 Aims for the Moon with Intuitive Machines CEO Steve Altemus 2/13/24

Episode Date: February 13, 2024

This Valentine’s Day, Intuitive Machines will become the latest to attempt to launch and land the first commercial lander on the moon. The company is contracted for the mission by NASA as part of its Commercial Lunar Payload Services (CLPS) program, following private held startup Astrobotic’s failed attempt under the same program last month. The SpaceX Falcon 9 will launch the Nova-C lunar lander into space the same day as the company’s one-year anniversary of its public debut. CEO Steve Altemus joins Morgan Brenna ahead of the mission to discuss what’s at stake with the IM-1 mission and outlook for the lunar economy.

The M1 mission will launch on a SpaceX Falcon 9 in the latest attempt to make history. Scheduled to lift off just before 1 a.m. Eastern on Valentine's Day, if all goes according to plan, Intuitive Machines' NovaSea lunar lander will begin its journey to the moon, where, on February 22nd, it will try to soft land. If successful, the lander, named Odysseus, would become the first commercial spacecraft to touch down on the lunar surface, and the first hailing from the U.S. since Apollo 17 in 1972. Intuitive Machines is contracted for the mission with NASA, transporting government and private payloads under the Commercial Lunar Payload Services Program, or CLPS.

It follows privately held startup Astrobotics failed attempt under the same program last month when Peregrine suffered a fuel leak that derailed that spacecraft's own planned trip. Intuitive Machines CEO and President Steve Altomus says years of development and testing went into this milestone moment. You know, the challenge for this first mission was to do a soft landing on the moon with NASA experiments and do it in about a four-year time frame, as much time as it takes to get an undergraduate education, and do it fixed price for about $100 million. And so right there is, if you can hit that target, there's a beginning of unit economics

that can work for a business. Intuitive Machines is publicly traded. It's a small cap stock with a market valuation of roughly half a billion dollars that went public a year ago via SPAC. Ticker LUNR, Lunar. The success rate of landing on the moon is low, less than 50%. And Intuitive Machines is the latest in a string of commercial players to attempt the historic feat.

On this episode, Ultimis discusses what's at stake with this M1 mission as Intuitive Machines aspires to become an infrastructure player in the emerging lunar economy. I'm Morgan Brennan, and this is Manifest Space. Steve Ultimis, Intuitive Machines CEO, It's so great to have you on the podcast. Thanks for being with me. Great to be here. Good to see you again, Morgan. All right. You've got this big mission coming up, Valentine's Day mission. It's the I Am One mission. Walk me through this moment and why it's such a milestone. Oh, it's a historic milestone. We're about to launch our lunar lander. We nicknamed it Odie. It's a Nova Sea lander. We're going to launch it to the

South Pole region of the moon on Valentine's Day. And we'll take about nine days to get to the moon and we'll stay on the surface for about seven days and this marks the first commercial mission um to be successful potentially on the south pole of the moon and the first mission ever to fly to the south pole of the moon so we're very excited about it the team is laser focused um and we're just uh doing the final checks with the interface between the lander and the Falcon 9 rocket to make sure it gets off the pad safely. And of course, this is part of NASA's commercial lunar payload services program. So you have payloads for NASA as the agency looks to return Americans to the moon in the surface of the moon in coming years.

And you also have commercial payloads. I guess walk me through what that mix looks like and what is at stake in terms of some of the experiments and some of the aspects of the mission that will take place assuming a soft landing. Well, I think that's the most important objective for all of us is to do a soft landing in the South Pole region of the moon, which like I said, has never been done before. We have six NASA payloads and six commercial payloads. Very exciting payloads. The ones that NASA has chartered us to fly to the moon are the ones that study essentially the environment and conditions at the moon that we can expect when humans get there. For example, we'll study the dust plume as the rocket motor interacts with the surface

of the moon and what that means for future landing pads and habitats and equipment on the moon. They want to know how that dust behaves. We'll study, we have a couple of navigation instruments, an RF navigation instrument that will power up on the way out to the moon that helps us with orbit determination and pinpoint accuracy for where we are en route to the moon, excuse me, and another one that does a laser doppler that actually tells us the speed across the surface of the moon as we're approaching to land very exciting The last one I would say

Mention is one that deploys these antennas from four sides of the vehicle And those antennas measure the radio frequencies that are just ambient around the moon and and that's never been studied before So that'll be an interesting piece of science. The commercials are just exciting we have our our sponsor and uh engineering payloads in colombia where we're testing their omni heat shield material on the side of the lander um that that's really a great partnership that we've celebrated with colombia uh and we have an art project uh jeff coon an art project Jeff Coons art project to do where we were taking up 125 of his figurines That he'll then sell That a copy that one copies on the moon and one copies on earth and you get the copy on earth. It's pretty exciting and then several other

Payloads commercial payload one in particular will take a picture from the South Pole region of the moon and take a picture of the center of the Milky Way galaxy, which is the only picture, the closest picture to the center of the Milky Way galaxy. So that should be transformational. And then my favorite payload of all is my alma mater, Embry-Riddle Aeronautical University. They built the payload to eject a camera as we approach the surface of the moon. And that camera will fall to the surface and take a picture, an actual dynamic picture, a series of pictures of us touching down on the surface of our lander. So that's the first selfie of a lander on a celestial body. So I'm really excited to see what that footage is going to look like.

I am too. So I want to go back to this idea of a soft landing because we know it's hard. We've seen it happen. We've seen it happen unsuccessfully and successfully. We know landing on the moon in a soft way is very challenging. Case in point, what we saw

with another commercial company recently as well, Astrobotic with their lander. So what's at stake in terms of being able to pull that off? And I guess, how do you plan for that? Well, what's at stake is, you know, I think, you know, ultimately, we have to knock that barrier back to where we as commercial businesses can actually achieve something like reliably landing on the surface of the moon. We've done it in a way that is pushing the boundaries of cost or access to space, pushing the price down. And hopefully we haven't pushed it too low to where we've taken undue risk. We've done an incredible amount of testing. We've fired the engine in our test stand. We fired the engine on the lander itself. We've done over 10,000 seconds of engine firings to

make sure that that engine's going to work for us. That's when we build in-house. We've done full functional testing on the vehicle to make sure every valve moves, every wire goes to every sensor is perfectly aligned, and every thruster fires. So you just had to do incredible amount of testing to make sure that the vehicle could withstand the harsh environment of space the hot and cold of uh pointing to the sun and then moving to the darkness of space that temperature swing could be as much as 500 degrees fahrenheit so it's very challenging on the hardware a very tough uh environment to fly into and so practicing on the ground and testing like you fly is the way to go do that. We've done as much as we can do. It's time to go fly. So assuming everything goes according to plan, how does that set you up for the rest of the year and for more potential lander opportunities? Oh yeah, we have this mission on Valentine's Day, and then we'll have another mission.

We're finalizing the launch date on that should be in the November timeframe. And that's another mission to the South Pole. And then a third mission that will go a year from this month in February. So we have our spacecraft in development here in Houston. We have one at the launch pad and three spacecraft here in Houston being constructed. So it's a busy time for us at Intuitive Machines. It's pretty incredible that we're starting to talk about an emerging lunar economy. And I just want to get your thoughts on what that looks like, how that grows, and what that addressable market could ultimately

look like. We know it's government-led right now, but the commercial piece of this, how that continues to evolve. Yeah, today NASA and the government represent about 80% of our business and 20% of the business is commercial. We expect that to move in the coming couple of years to about a 60% government business and 40% commercial and international business. So we're seeing that trend now as more and more attempts to fly to the moon are taken. More payloads are being developed by different companies and different sovereign governments and commercial international companies. So that's exciting to see the burgeoning economy. So we think that there is, once you land softly and break that barrier of

low-cost access to the moon, there'll be many many more landed missions that that take larger and larger payloads to the surface including heavier cargo so that we can start to pre-place uh cargo for the future human missions uh you know the artemis program uh has announced a slip out about a year for their next mission and that'll move uh to the we expect. And companies like ours will have to fill in to continue to land on the moon and do research at the moon and to establish the infrastructure like communications and navigation

and bring up the cargo that's gonna be needed before the humans step foot on the moon. And I think that's a great place to be as a business to be supplying equipment and infrastructure to the moon and offering I think that's a great place to be as a business to be supplying equipment and infrastructure to the moon and offering that as a service. So that's the kind of economy that we're looking for and looking to open up. I think the total addressable market, NASA itself is going to spend $85 billion returning to the moon over the next five years. And we see that market only growing as we get more international involvement, more commercial activity, and more Space Force-related space

traffic management interest in what's going on around the moon. So what does that mean in terms of how you're projecting cadence for your landers? You know, you just mentioned, you know, these three missions over here over the next year or so. But how much do you expect that to ramp? And what does that mean in terms of the type of hardware that's going to be needed that you need to develop? Yeah, very exciting times in terms of, you know, we started with an idea to have an annual cadence of missions to land softly on the moon. Quickly, that's grown to where our Nova C lander can take only so much payload, 130 kilograms to the surface.

We needed to scale that. So we have a Nova D lander in development that'll take anywhere from 750 kilograms to 2000 kilograms of payload to the surface. And that allows us to build infrastructure like a lunar rover for humans. The LTV program NASA had put out as a procurement, and we bid on that. And we would deliver what is essentially an F-150 Ford pickup truck-sized moon buggy to the surface of the moon. And so those heavier and heavier cargo missions are definitely in our thinking and in the works in our design space.

The fact that you're a publicly traded company, as you develop all of this, build out a revenue model, what does that mean? And what does that mean in terms of navigating investor interest and demands versus the fact that we're talking about long lead times when it comes to space and particularly something like a lunar economy? Well, we hope that those lead times get shorter and shorter. You know, the challenge for this first mission was to do a soft landing on the moon with NASA experiments and do it in about a four-year time frame, as much time as it takes to get an undergraduate education, and do it fixed price for about $100 million. And so right there is, if you can hit that target, there's a beginning of unit economics

that can work for a business. Being public as a company was a choice that we made to bring and highlight the work that we're doing to return the United States to the moon in a sustainable way to the general public, to the retail investor and institutional investors that can actually look and see and participate in this burgeoning economy. So it does provide us access to growth capital as a public company. There's many more opportunities for investors to take part in that for us. And we look for that growth capital to expand into the areas of the economy that will grow, like a lunar data network, like data relay satellites and navigation around the moon. And like I said, even power plants and rovers around the moon or on the moon.

So that's kind of where we're headed, and that's what it means to us. There is some overhead with being a public company, but we had gotten all that in order, and we're thriving in the public markets right now. It is fascinating to me, this idea that we're going to be monitoring this launch and then a landing on the lunar surface. And there's going to be essentially a stock chart up next to whatever coverage I do on CNBC in the process. It really, to me, it's very telling about this moment that we're in in terms of commercial space. It really is. It's exciting to be here. And what I look for most is this is a dangerous business. We're on the leading edge.

And I look for folks to be resilient. And should something happen, remember the amount of technology that we have developed as a result of this challenge to get to the moon in four years for less than $100 million forced us to innovate. And because of that, we've developed so many technologies that make that investment by the U.S. government worth every penny we spent. And we're going to continue to build on those investments that the government has trusted us with and continue to work on knocking back this barrier. So if we launch off the pad and we commission the engine and fire it in space, and we take the next step and make it all the way to lunar orbit, every step along the way is a wild success for us. And you know what? We have more missions in the queue ready to fly. And that's what I really want people to understand,

that we're in the arena doing something that's never been done before, and we're not going to stop until we get it right. We talk about frontier tech. This is like final frontier tech. Yeah. You and I, you and I've had this conversation before, but I had it, I had it recently with a venture capitalist who said, you know, listen, the space economy more broadly is really going to unlock when we can not only bring stuff to space in a more cost-efficient way, which we know a start is happening,

but when we can bring it back as well, we can bring things back from space. And I just want to get your thoughts on that and sort of what it will take to get to that point in the cycle. Well, I think it's inevitable that that's the value of space is always what you bring back. And whether that's in communications or observation data or navigation data, it's all what you need back here on earth. And so I think there is a future for using the materials on the moon and returning those to earth and using those precious materials for research

and science back on Earth. I think also, you know, if you look at the future of mining, there are rare Earth materials on the moon that may be eventually cost effective in returning those mined or harvested materials back to Earth. And so there's material like helium-3 that could be used for different applications, including quantum computing and medical research. If we can bring that back to Earth at the right price point is a real market. And once we establish that, the economy will just continue to, the lunar economy will just continue to blossom. Is that something that you're working on, developing those technologies for the future?

Always thinking about it. Anything else to keep in mind in terms of this upcoming mission or intuitive machines and the game plan here over 2024? Well, I think for this mission, it's a great offering to celebrate a successful launch on Valentine's Day and give that as a gift to our significant others. So that's something that is really neat. And by the way, this launch is a year to the day since we went public as a company. Wow. I didn't realize it. So it's a double milestone then.

It is. It is. Steve Ultimis of Intuitive Machines, thank you so much for joining me. Great to speak with you. Thank you, Morgan. That does it for this episode of Manifest Space. Make sure you never miss a launch by following us wherever you get your podcasts and by watching our coverage on Closing Bell Overtime. I'm Morgan Brennan.