The Rundown - The SpaceX IPO is Coming. Here's Why Elon Musk Can No Longer Resist (ft. Eric Berger)

Episode Date: December 14, 2025

Eric Berger, senior space editor at Ars Technica and author of Liftoff, joins to break down why SpaceX may finally be preparing to go public, and why this could become the biggest IPO in history. Berger unpacks Elon Musk’s long resistance to public markets, how Starlink transformed SpaceX from a launch company into a revenue machine, and why the AI arms race is pulling SpaceX into an entirely new business: data centers in space.

All right, Eric Berger, welcome to the rundown. Hey, it's my pleasure. Glad to be here. I'm super excited for today's conversation. We both have some stuff in common, like I was saying before the show started. Eric is a fellow Houstonian, also at UT Austin alum, if you're watching the video version, that's what we both have in common. But Eric, what we don't have in common is your expertise of SpaceX. You've written a book on them. You've also a fantastic piece this week about why SpaceX is looking to IPO soon or why they'd want to

IPO soon. Before we really dig into the piece that you wrote, Elon Musk replied to that article on X, saying that as usual, Eric is accurate. When you got that notification on X, what was going through your mind when you saw that? I mean, you know, Elon talks to me on X every now and then, so I wasn't super surprised, but I will say that, you know, coming from him, that's pretty high praise. He has a difficult relationship with journalists, I would say. but but he prizes accuracy above above all out so when he said that I thought well the article must have hit pretty close to the mark yeah that's what I think that's what everyone's takeaway was like if Elon is saying good stuff here this must have really been accurate so let's talk about the

piece that you wrote on Ars Technica fantastic piece I highly like when everyone read the whole thing one of the things that you talked about is why Elon Musk has resisted going public with SpaceX for so long. So can you first talk about why, you know, the company's what, 20 plus years old? Why has he waited so long to go to go public? Yes. I think, you know, one of the main reasons is that SpaceX has never really been profitable. The company's existed since 2002 and for the first 10 years, they lost money. And then the second 10 years, I think they broke even, some years lost money. But basically, you know, all the money that they've raised from government contracts to launch satellites to Dragon spacecraft contracts to commercial launch contracts was reinvested into the company. It was like there was no profit taking.

And the decisions he was making were not intended for, you know, short-term gain. These were long-term visions. I mean, the ultimate goal of the company is to settle Mars. So that is what he's pushing toward. And that is not a winning formula, I think, for investors who are looking to put some money into SpaceX stock and get money back. So I think, you know, he was always really concerned that the vision for SpaceX was not consistent with what shareholders would want out of a company. But, I mean, there still seems to be demand. Even in the private markets for SpaceX, there was reporting that SpaceX is now valued at $800 billion, based on.

on some secondary sales that they've done for their stock. You know, I think the other thing sort of, and I take your point, like there's been a huge market for private investment in SpaceX, and there's been a clamor from public investors. But the other thing, too, that he's taken away from his experience at Tesla now for more than a decade of being a public company is that there's a lot of scrutiny of what the company does. And I think a lot of that has rankles him, having to sort of open his books that much to the public.

And so I think there's also been sort of that, he just doesn't want that extra headache of being a public company and all of the regulatory oversight that comes with that, but also like the public scrutiny. I think he likes to sort of just, he likes to make decisions without having to consult other people. And that's more difficult with a public company. Well, he famously tried to take Tesla private all those years ago. And then obviously X is now private. So that makes sense, which is why the news of a potential IPO was so surprising. So what do you think change? Why do you think right now is a good time for the IPO jump?

Is it the success of Starlink that it's going so fast? Is the company on the track to be profitable soon? What do you think changed? So there's multiple reasons, and I'm happy to talk about them, but I think the primary change is really the acceleration of artificial intelligence over the last few years. Musk has decided that it's existential for him and his businesses and perhaps humanity, that sort of his vision of AI wins the future. Some of it also is probably personal animus with Sam Altman.

He wants to kick Sam's butt. I wouldn't actually discount that as being a reason. But, you know, he views AI is super important. And there's this convergence of robotics at Tesla, XAI, his AI company, and like now data centers in space, which is like absolutely right. SpaceX could not be more poised to be successful in that industry because it has the only reusable, rapidly reusable launch vehicle in the world

is building a much bigger one, and it has lots of experience building capable satellites with Starlink. It's put almost 8,000 them into space. So like they are perfectly poised to capitalize on data centers. And so I think he saw that if he was going to win that battle, that now was the time to raise. a bunch of capital and just go for it. So going public, I mean, people, even in your article, you talked about how this might

be the biggest IPO of all time. There's speculation that it might be valued at $1.5 trillion, right, the biggest IPO ever. He's going to raise a bunch of money. So I want to talk about this whole data centers in space, right? There's a lot of hype around it. Sam Altman invested in some company to try to bring data centers into space. Jeff Bays, this is Blue Origins is doing that. What does that mean data centers in space?

Like, I feel like we're having a hard enough time building data spenders on Earth. It's super expensive to do that here. What does data centers in space even mean? Right. It's really interesting when you look at it. And Sam Altman did look at Stoke Space. I don't think they actually ended up making an investment. But, you know, Eric Schmidt, former CEO of Google, bought Relativity Space almost a year ago.

And the intent there was to basically use their medium slash heavy lift rocket that they're developing to do data centers in space. So it's like there's this huge amount of interest. And so the idea is basically that you would take sort of the, storage processing and transfer of data and move it from data centers off earth and put them in space. And well, why would you do that? It's space is difficult. It's a difficult environment. It's hard to get to.

And the answer is that, you know, if you're going to use solar energy, you get about six times the amount of solar energy in space than you do on Earth because it's 24 hours on. There's no clouds. You know, you're not losing any light coming through the atmosphere. So it's basically 24 hours continuous power. it is difficult to dissipate heat in space, believe it or not. Yes, space is cold, but it's a vacuum, so it's actually difficult to dissipate heat from your, from your satellites. But that can be managed. The problem is about the same as this is on Earth.

I mean, cooling in data centers is obviously a huge issue here on Earth. You know, there's a lot of technical challenges in terms of getting the data to space, communicating between satellites and getting the data back. But SpaceX has already solved some of these issues with its massive Starlink constellation, which has these laser data links that really, like I said, they sort of have the core technologies for this already ready to go in a mass manufacturing line built in. So the idea is basically like you get free energy in space and you don't have to deal with all of the terrestrial hangups. Like I think we're going to see a growing backlash to data centers here on Earth.

People aren't going to want them in their backyard. They're driving up energy prices. They're environmentally, you know, not good for water and other things like that. So I think there will be an environmental backlash of data centers in space. And it's a lot easier to get a permit for 30,000 satellites than it is to get a permit for 3,000 data centers across the country. Okay. So it's not when people say data centers in space, it's not necessarily like you're building them on the moon. It's like kind of like a floating satellite that then you're using.

the solar energy? It would be probably something between 600 and 1,000 kilometers above Earth, yeah. So presumably it's in low Earth orbit. You could put them elsewhere and eventually you could do data centers on the moon. Actually, you know, if you wanted to solve the heat dissipation problem,

you could put them in permanently shattered regions on the moon, which are extremely cold. But initially, yeah, we're talking about satellites in low Earth orbit. Gotcha. So you know, Elon obviously, he makes a lot of promises. He likes He likes to talk a big game.

I feel like the timelines don't always match up, though, when it comes to, like, delivering on stuff. He eventually gets to it, but what does it look like when you're saying data centers in space? Is that like a this decade kind of thing, or is that like 10, 20 years down the line? That's like a this, you know, 24 to 36 months thing for SpaceX, I think. Really? Okay, very interesting. They're going to move pretty aggressively into this. And like I said, they're kind of set up to do it.

they already have a Starlink version 3 satellite. And I think they're going to modify that. And I don't know this for a fact, but I suspect they've already done a lot of that engineering work. And so they can move into production pretty quickly. And I would not be surprised to see some test satellites launch within the next 12 to 24 months. And how quickly you scale up to actually full-scale data centers in space, you know, we'll have to see. But this is, you know, I am not an engineer. But, you know, and I talk to smart people who think that data centers in space aren't practical.

Like, they're just like, why wouldn't you just build them in the desert or, you know, somewhere here on Earth where there's lots of solar energy? But, you know, when Elon, Jeff Bezos, Eric Schmidt and a whole host of other people are really going for this idea, you think, well, there might well be something to it. To me, so I always think that it's like, just sounds cool. It's like, oh, space is cool, data centers is cool, data centers in space, boom, let's make it happen. So I think that there's also a cool element to it. And then it's also like a narrative element to it too. You can sell that to investors. We're like, hey, you want to invest in our company because we're doing this cool thing.

We got prototypes. We're 36 months away. And then you build the narrative to, you know, kind of feed into like the hype. Local news is in decline across Canada. And this is bad news for all of us. With less local news, noise, rumors, and news. misinformation fill the void, and it gets harder to separate truth from fiction. That's why CBC News is putting more journalists in more places across Canada, reporting on the ground from

where you live, telling the stories that matter to all of us, because local news is big news. Choose news, not noise. CBC News. Okay, when I sell my business, I want the best tax and investment advice. I want to help my kids, and I want to give back to the community. Ooh, then it's the vacation of a lifetime. I wonder if my out of office has a forever setting. An IG Private Wealth Advisor creates the clarity you need with plans that harmonize your business, your family, and your dreams. Get financial advice that puts you at the center. Find your advisor at IGPrivatewealth.com.

I mean, if you look at where all the investment is going, I mean, hundreds of billions of dollars are being spent, on data centers at this point around the world. And if you can build them for that amount or less in space at scale, then you've got a huge product where even five years ago, this didn't exist in space. I mean, it's interesting. You know, we've had about 20 years where you've had SpaceX, but other companies starting to build a really great launch capability,

but it hasn't been entirely clear what we'd need all these rockets for. but if you take like you know so we have Starlink we have Amazon's constellation Amazon Leo you have one web and some of the constellations but like data centers would be like almost a factor of 10 on top of that in terms of needed for launch capacity and so what I'm saying is we have the tools to like to do this in space it's not the thing we had five years or 10 years ago but we have them now and even more so in the near future with Starship and Blue Origins and New Glen Rocket So it's not crazy to think this is going to happen. Do you think that kind of zooming out a little bit talking about SpaceX as a whole?

Do you think that SpaceX is Elon's favorite company? Yeah, I do because I think the thing that he's been most passionate about for three decades is like human settlement beyond planet Earth. Like he talks about making humans multi-planetary. he worries a lot about like the long-term viability of the human species. He thinks a lot about like what future evolution would look like, convergent with AI. And so he's convinced that like for humanity to survive long-term, it needs to spread to other planets and eventually other stars.

And so he's trying to do what he can to push us out there. And, you know, this comes back to another reason why I think that they're doing the IPO now is, you know, he's been really, really active as an entrepreneur for the last three decades. So he started, you know, in his 20s. He's not 54, right? And he doesn't have the healthiest lifestyle, you know. I mean, you look at Jeff Bezos, and that guy works out and he's clearly really taking care of his body. And Elon, you know, he spends a lot of time working and is less focused on, I think, his health.

and I just saw an interview yesterday we said where his favorite food was cheeseburgers which I can't disagree with him but I mean you know that's not the healthiest thing in the world so I think he realizes that you know he's 54 he's been talking about Mars for 25 years and this is this is the time to go for it like SpaceX has grown to this huge company right it's valued hundreds of billions of dollars

got like 14,000 employees but like he's thinking if we're really going to do get a human settlement on Mars in my lifetime we need to get even bigger And so I think he's rolling the dice and going for it. Do you think the SpaceX is a monopoly? Because I feel like, you know, they own what 90% of the market when it comes to commercialize launches. There's a lot of people trying to compete with them. Obviously, they have Jeff Bezos with Deepockets.

There's all these space companies that have IPOed recently. There's new ones popping up all the time. I feel like no one's really close to getting to the level that SpaceX is at. And the fact that they have such scale already makes them even more attractive. makes it even more attractive when it comes to as a potential investment, you know, when you see it as a potential investor. So they are monopoly in some senses, and I'll explain what I mean by that. But I think that also that will not last. So they are like right now, Russia's human launch site is offline.

So there's only two ways in the world to get people into space. It's China and it's SpaceX Dragon. They have a monopoly on Western human launch. they will launch 90% of the mass to low Earth orbit this year. They're going to launch 160 or 170 rockets this year. The next closest U.S. competitor is like six rockets. Crazy. They operate almost 90% of the satellites in orbit,

the Starlink constellation. And so, yeah, they have like a functional monopoly. But, I mean, it's interesting. if you look at what the telecoms are doing, because Starlink is by far the best technology, right, for Internet broadband and for connectivity and increasingly for direct-to-device. But some of these companies, like AT&T,

are investing in a company called AST Space, which is way behind SpaceX and the technology. But they're not, they don't want Elon to have a total monopoly, right, on this. They want to have competition. Otherwise, they'll become beholden to SpaceX. And in launch, the government, you know, is trying to get other competitors to step forward. You mentioned Blue Origin, but there's other launch companies such as Rocket Lab and Stoke Space as well that are really kind of on the rise. And it's so interesting for me to watch because if you go back 15 years or 10, 10 years even,

SpaceX was trying to break the monopoly United Launch Alliance had on launch contracts in United States. And they've completely, like, turned the tables. But it's not, it's not really because, like, it's government favoritism. It's just because, like, they've out-executed all of their competitors. And so it's not like the government's really handing out favors. They're just, like, doing stuff better and faster and cheaper than everyone else. I think that's the key point right there. They literally, like, what, they went step by step, figured out how to reuse stuff.

I mean, they totally changed the game. And you wrote, again, a great book about it, too, kind of breaking that now. Yeah, and you know, there it goes back to, you know, we talked about, well, why wouldn't they have been a good public company? Because like they were just taking all of their funding and pouring it into research and development on their next line of products. Like they would get one launch vehicle completed and then they'd immediately start working on the next one rather than sort of trying to take profits out of that vehicle. Do you think the success of Starlink? I think Starlink is just, I mean, incredible, right? I'm thinking about getting it as a backup for my internet service whenever the,

the power goes down in Houston because that happens all the time, surprisingly. And then it's coming to airlines and stuff. United Airlines is going to roll it out. Do you think the commercial success of Starlink is playing a huge role here? Because, I mean, that's growing revenue. They're growing like crazy. And it's a big brand. I mean, I think there was talks to even potentially spinning it out into a separate company.

Now I think that's not the case anymore. Can you talk more about the Starlink kind of being really the main kind of piece of the pie here? It is because if you look at like, so SpaceX for the first 15 years of its existence was really a transportation company. It was launch and at a lesser extent spacecraft, cargo spacecraft, and then crew. Launch, if you look at sort of the spectrum of space industry is really a tiny piece of like revenue. So expanding to, you know, Starlink to do communications opened up a much bigger slice of revenue. So we've seen SpaceX's, you know, revenue each year grow, grow, grow, grow, grow because of Starlink. And this year, or excuse me, next year it's estimated to be $22 to $24 billion.

Wow. Which is a lot of revenue, especially for a space company, because, you know, NASA's annual budget is about $25 billion. So SpaceX now has an annual budget on par with NASA. So when Elon says that, you know, we're not relying on NASA anymore and haven't been for quite a while, he's exactly right. Like they're providing services to NASA, but it's not like SpaceX's existence. does not owe its existence to NASA anymore. Yeah, that's true. And I think that's going to be important to watch to see the growth of that business.

And it's going to be interesting to see how SpaceX is as a public company, how the market reacts to it. Is it going to have the up and down nature of the Tesla as a Tesla? What role does the Elon factor play? Because that plays a factor when it comes to the valuation. of his companies. Yeah, and I mean, you know, SpaceX historically, and I haven't covered Tesla much, I's focused entirely on space almost, but has been far less volatile.

And SpaceX had a rough year in 2015. They had a rough year in 2016. And then from 2016 to this year, they had this phenomenal rise. They just had success after success after success and just really grew phenomenally in launch, in crew transportation and in Starlink, the Starlink system. This past year's been a little difficult because they've had three starship failures, and so there's questions about the long-term viability of that program. And Starship is important because to get the really big Starlink satellites that SpaceX wants to have up there,

they've got to get Starship working. So this year might have been interesting if it were a public company, because it would have been skyrocketing, I think, for a decade, and then maybe leveled off a little bit to this year. year. But you're absolutely right. Like, the long-term value of SpaceX is not the launch business. It is what it's doing in space. And that's why I think data centers are such an interesting element, because even like a year or two ago, that whole piece of revenue didn't exist. But, like, you know, if you figure, like, launch is, potential revenues one, Starlink is like a factor of

10 over that. And then data centers are potentially a factor of 10 over that. So it's like 100 to 1 over what the launch business was. And so that's why I think they could have a chance to get that much an IPO just because there is this huge potential for business if AI is not a bubble and if they can get data centers to work, then there's zero question of my mind that SpaceX will be the leading data center company in the world. How vulnerable do you think that SpaceX is to a potential AI bubble? If there is a significant reduction in CAPEX by these hyperscalers, do you think that impacts SpaceX dramatically or do you think that their other business kind of buffers that from happening?

Well, right now, right now they have zero vulnerability. But if they go public with data centers as a major core of their business, and they invest like tens of billions of dollars and putting these things in space and they're not being used. And yeah, that's a huge problem. I will say, you know, Elon loves to vertically integrate his companies. And it's been really the key to success at SpaceX. He's going to be vertically integrating the hell out of his businesses

because he's got an AI company, XAI. and imagine the synergy of, because no other AI company can do this. Like, no other AI company has a rocket, let alone the best rocket in the world. No other AI company can build satellites, let alone the best satellites in the world and most efficient manufacturing.

And so he has the potential to build the data centers and get them into space and then provide them at like a tenth of the cost to what he might sell that to other competitors. I mean, it's just that vertical integration is a killer. And like, if I were another AI company, I'd be very concerned about that because if data centers are like,

I don't know what percentage of the cost of an AI company, but data centers are probably a lot, like if it's at least 50% of your costs, if he can do that for half or a quarter of what you're doing, I mean, that's like, they'll kill him. So, I mean, he'll kill the competitors. And I guess that might explain why Sam Altman was considering talking, you know, kind of exploring the same thing,

investing in the space company to kind of but you know it's just they're all super far behind like he was talking to stoke space

which is a phenomenal company it's based in Washington they're trying to build a fully reusable rocket that has a lift capacity of about four tons to orbit well that's a nice rocket

but it's about one fifth the payload capacity of a falcon nine and one 50th at the capacity of a starship and it's probably not even going to launch for the first time until late next year, 2027, then there'll be a period

to scale it up. So like any other company is at least a decade behind SpaceX's ability to build stuff and get it into space. And so, like, it's not, I don't think it's unrealistic to say SpaceX has a decade lead in other companies and trying to do data centers in space. Yeah, that's, that's what makes them different than others. I'll end with this. You know, you cover the space, space industry closely.

What are some other emerging companies or trends that investors or people in general should keep on their radar as we enter into 2026 and beyond? Yeah, you know, I don't invest in the space industry. I don't give financial advice because I cover it. But, you know, there's lots of exciting space companies. You know, it was interesting, there was a period in like 2020, 2021 when companies were going SPAC and there were all these private companies doing that in space. And I was like, man, thinking to myself, I would never invest in that company. And who are these people that are driving these crazy valuations? But now with, I mean, I would be looking for the companies that can serve data centers in space.

I'd be looking for the companies that can do orbital refueling. I would be looking at the companies that can land on the moon. And I would be, I would be looking at the companies that can help the government with Golden Dome because that's a huge project as well where there's going to be lots of money on offer for companies that can execute. But the key, the key man is companies that actually have real hardware and not just PowerPoints because there's lots of power points out there.

So rapid fire, do you think that we get to the moon before 2040? back on the moon before 2040. Before 2040? Absolutely. Absolutely. The question is whether we get there before 20, 30. I feel like I've been hearing this my entire life.

I remember as a kid under the Bush administration. Oh, we're going to get back to the moon. Get back to the moon. I'm 35 years old. We're going to fly astronauts around the moon in three or four months. So like that's happening. And then the lunar landers are coming along. And I mean, China's going to land there within five years.

So we'd better get off our butts as well. But yeah, we're going to be back on the moon within five. five years. Amazing. And then Mars. I mean, you know, end of the century. How about that? I'll give you that.

End of the century. I mean, I would put that number at like 2045. Really? Wow. Wow. Okay, I just, that's amazing. I mean, I always think the Mars thing is like, is like the North Star that you never actually reach, but it's like, it always has been.

It always has been. But like, the cool thing about Starship is that for the first time in our lifetimes, for the first time ever, there's been a human-built transportation. system that could get people there. So like, it's coming. The National Academies of Science just put out a report this week saying Mars is inevitable. Here's the science we ought to be doing with people on the Red Planet.

So I think it's coming. It's still going to be a while. It's not going to be 10 years. It'll be a little bit longer. Well, I'm looking forward to the moon landing because, I mean, obviously that's moon landing in 4K live on YouTube. I mean, that's going to be. That's going to be pretty awesome.

I can't wait for that. Eric, you're amazing. You know, love reading all your stuff, especially the space city weather. Again, big fan. So thank you so much for your time today. Thank you. Rosen lasagna, medium power, 15 minutes. Sounds like Ojo time.

Let's play. Feel the fun with Play-Ojo. The online casino with all the latest slot and live casino games. What you win is yours to keep with no wagering requirements, instant payouts, and no minimum withdraws. Hey, I just won. Woo-hoo. Feel the fun. Play-O-Joe.

Honey, forget about the lasagna. Let's see. Celebrate. 19 plus Ontario only. Please play responsibly. Concern about your gambling or that of someone close to you. Call 1866-531-2600 or visitconexontera. Or visit connexonterio.ca.