The SpaceX IPO, Fable 5, AI Capex Update & Market Check w/ Gavin Baker, Andrew Fox & Clark Tang
Episode publishedPodcast: BG2Pod with Brad Gerstner and...BG2Pod with Brad Gerstner and Bill Gurley
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I think we're all pretty AI pilled and if you're AI pilled that means we got to build a lot more compute than the world thinks and that these models are going to be a lot more valuable than people think. You combine that with their core business, I don't know another entrepreneur or another business that's a better bet on the future than SpaceX. And so I think for most institutional investors it's a must buy, a must own is set it and forget it in order to have a real bet on both the space and the AI future. All right, here we go. Early morning, Silicon Valley. BG two is back. We're chopping it
Sure. So great to be here. Thank you for having me. I thought we were gonna call it BGGB, but we can stick with BG2. I'm in
your house. Hey. Hey. That's revision. That's okay.
That's okay. So I think there's two big levers or variables that I think people should focus on. And, you know, I'm not going to comment on where I think those variables go. But one is, you guys have this chart. Did you post this on X?
I did before, and then we also included a new addition with XAI's new deals as well.
Yeah. Yeah. So Clark, who I've known for many years, did a great analysis here, and he shows that xAI's deal with Google for cloud computing generates more operating profit per gigawatt than Anthropic, than Meta, than Google, than OpenAI. Their deal actually with Anthropic also generates probably more operating profit than anyone but Anthropic. And so your colleague at Altimeter Freida, she calculated a 55% IRR on Colossus I. If you can borrow money at 6%, 78% and invest in something with a 55% IRR, I'm not the most sophisticated thinker, but that math maths. And so I think the most important
I think one of the interesting things is, the way you answer the question, we didn't talk about launch. We didn't talk about Starlink or communications. Those, up until really six months ago, were the business. And, you know, and then we merged in X dot AI, and we merged in Cursor, and then we announced these deals where it was very clear he was kind of building AWS right under our nose, you know, in in terms of this. But what I wanna do is go go to Fox. Give us the breakdown. Three big lines of business, right? We've got the communication Starlink launch business. We've got the, you know, AI
Yeah. Sure. So look, I think the thing that's foundational to everything is the launch business.
Right.
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