Elon Musk repeatedly one-upped his execs on SpaceX’s first earnings call
Elon Musk spent SpaceX’s first earnings call making some out-of-this-world claims about the company’s business and future prospects, while his fellow executives kept trying to
Elon Musk spent SpaceX’s first earnings call making some out-of-this-world claims about the company’s business and future prospects, while his fellow executives kept trying to bring his ideas closer to Earth — providing a hint of what’s to come now that his rocket-launching, compute-leasing, satellite-based telecom is public. The conference call, held Tuesday, was the latest in a years-long succession of Musk making outrageous promises that his executives then have to make more digestible for the investing public — like at Tesla, where a recent analysis by TechCrunch showed that the world’s richest man is increasingly focused on futuristic topics while his colleagues spend their time talking about the actual business of selling cars. Let’s start with one of the biggest ideas Musk floated on the call: that he expects SpaceX’s Starlink service to “deliver a majority of the world’s internet” in “less than 10 years.” Musk made the comment in the context of SpaceX preparing to launch the first “V3” versions of its Starlink satellites, which have much higher bandwidth than previous versions. Here’s what he said It’s kind of hard for people to wrap their minds around this, but like, it’s not out of the question that at some point, Starlink will deliver a majority of the world’s internet, at least in countries where we’re allowed to operate, which is the vast majority of countries. So this is, you know, important to bear in mind, and it’s not in like the infinity future. It’s, you know, less than 10 years. Contrast that with what chief operating officer Gwynne Shotwell said just a few minutes later, emphasis mine The significant amount of capacity we’re able to add to the Starlink constellation from the V3 satellites will enable us to continue providing even better service — and it’s pretty great already — but to do so while serving more and more customers over the world.
In fact, in the years ahead, we expect Starlink will represent a significant portion of global internet traffic, which Elon also talked about. It’s a far more lawyered-up claim to make, even though it’s still obviously ambitious. But that was not the only instance where Musk optimistically diverged. At one point, SpaceX chief financial officer Bret Johnsen offered investors one of the few new financial targets discussed on the call. Johnsen was highlighting SpaceX’s relatively new business of renting out compute power to other AI players, which has helped the company generate billions in fresh, fast cash. I’ll once again emphasize the big promise Johnsen made during his prepared remarks, and note how carefully he phrased it. It’s a very hedged and quite specific claim that he’s making. It’s clearly meant to excite investors while also leaving room for the company to avoid legal exposure if it misses the projection Looking ahead, we continue to see robust demand in all three of our business segments, but in particular in our cloud services arrangements. We see increasingly favorable economics with each agreement we sign, and as Elon mentioned, we expect the supply-demand imbalance in the compute market to continue. The current economics have translated into a less than one-year payback on our new capital deployments for compute. For example, in the first few weeks of the third quarter, we’ve already contracted an additional $6.7 billion of cloud services revenue over a si month period that begins ramping starting in October of this year. We believe this puts us on a trajectory, including contribution from Cursor, to reach $100 billion of ARR, or annualized revenue run rate by the end of this year, based on our expected revenue in the month of December of this year.
The BriefWire