Elon Musk at the IPO opening.

While most news reports have focused trivially on Elon Musk’s status as the first trillionaire resulting from SpaceX’s successful initial public offering (IPO) last week, the real story of that IPO has to do with SpaceX itself and how that company’s extremely bright future is going to change human history.

Let me run some numbers.

The day’s earnings

First, the IPO was designed to raise capital for SpaceX by selling about 555 million shares of stock, with an opening price of $135. Once IPO opened however that price immediately jumped to $150, rising as high as $176 during the day, and by closing time settled at $160.95.

If we pick a conservative average sale price of $155 per share, this means SpaceX raised more than $86 billion in investment capital on this one day. The actual number will be less, because the brokerage houses that ran the IPO get a cut, but I would guess SpaceX will walk away with at least $75 billion once all accounts are settled.

To give this some context, NASA’s annual budget for the past two decades has been around $24 billion. NASA however cannot use that cash very efficiently, because it is required by Congress to have a huge unneeded labor force in many centers scattered around the country, to create jobs in specific congressional districts and states.

SpaceX doesn’t have that problem. For the company, this is real money. It can focus its use very precisely and efficiently for what needs to be done, and thus get a lot more bang out of the buck.

Annual earnings

SpaceX however is not limited to just the capital raised in the IPO.

The landing of two Falcon Heavy side boosters
on its first launch in 2018

It presently earns about $12 billion per year from Starlink (a number that is guaranteed to rise in the coming years), and is now earning about $15 billion per year from a contract with the AI company Anthropic, in which SpaceX provides that company with computing hardware.

In addition, SpaceX’s rockets and capsules produce even more revenue per year. According to the company’s IPO prospectus, its space division earns about $4 billion per year. Those earnings include revenues from the 150-plus launches it does per year, plus its earnings from NASA contracts for flying manned and unmanned Dragons to ISS, as well as the independent private Dragon tourist flights.

Of course, not all SpaceX operations are in the black. According to its IPO prospectus it loses a small amount of money annually from that launch/spacecraft component, mostly because it is pumping about $2 billion per year into the research and development of Starship/Superheavy. It is also losing about $3 billion per year in its AI sector.

There’s more to this, but these numbers suggest that — ignoring expenses and research — SpaceX likely brings in about $31 billion in revenue each year from its various products.

Once again, compare that with NASA’s annual budget of $24 billion for the past two decades.

Superheavy caught in 2024 by the tower chopsticks
on the very first attempt

To put it bluntly, SpaceX not only has an annual budget that exceeds NASA, it also has a nest egg of cash equaling at minimum $75 billion. Even if it doubles its Starship/Superheavy development budget to $4 billion per year, it will have enough money to run that program for at least a decade hence. It is certain therefore that this development will accelerate and reach fruition. SpaceX will not only build the Starships NASA needs to land on the Moon, it has the resources to do anything else it chooses to do, from building data center facilities on the Moon as well as sending dozens if not hundreds of Starships to Mars.

Along the way, the company (and Musk) is focused on generating even more profits. For example, it is modeling the launch of its proposed million satellite computing/AI constellation after its Starlink constellation: Begin launching early versions of the satellites as soon as possible, thus garnering market share and revenues as soon as possible, and follow up with upgraded satellites as they are developed. It hopes to begin launching from 30 to 50 of its AI-1 satellites on Starship by early 2027.

And SpaceX can do this because unlike all the other proposed computer/data constellations, SpaceX has the rockets, the satellite factory, the computer technology, and the manufacturing capability to do it all in-house. No one else has that vertical integrated capability.

A new generation of wealth

Even more significant is the new generation of talent that SpaceX has fostered across the entire aerospace sector. The press has made much of the fact that this IPO created millionaires of more than 4,000 SpaceX employees. Previous news reports have shown something more important: A large number of former SpaceX employees have created their own startups, raised capital, and are revolutionizing not just the space sector but innumerable other hi-tech industries. The IPO now simply gives them additional financial resources for achieving their goals.

As predicted by Adam Smith in 1776 in The Wealth
of Nations. Image taken from 1880 Muir portrait.
Click for original.

SpaceX’s IPO also brings wealth and growth to countless adjacent companies, those that provide ordinary services — such as housing, real estate, schooling, contracting, transportation, groceries, etc — for the company and its employees. The prosperity SpaceX has brought to the south Texas region has been gigantic, taking what had been a depressed economy there for decades and turning it into a thriving economic engine. That wealth will begin to show up in other places, and in other industries, as SpaceX begins ramping up its space objectives.

What it all means for the future

It is very simple: SpaceX is the world’s leading space program. No one even comes close. NASA for example now builds very little. Under the administration of Jared Isaacman, it is laying out an ambitious lunar base program, but it is hiring the private sector to build practically everything. This is as it should be, but it also illustrates how ephemeral NASA is in the long term. Once the private sector develops the spaceships, rockets, and infrastructure requested by NASA, it will be in a position to make money on its own, from other customers — just as SpaceX is doing. In the long run this new energized private sector will leave NASA in the dust. And as I said, that is as it should be.

As for other countries, China’s space program is equally as ambitious and in many ways the most successful globally at this moment. It however still lacks the capabilities of SpaceX. It is working hard to develop reusable rockets, but none have yet flown successfully, and it will be at least two years before any can begin to launch reusable rockets on a regular basis, and even then none will be even close to the capability of Starship. It is building its own gigantic constellations for communications, internet, and computing, but all are as far behind SpaceX as its western commercial competitors like Amazon’s Leo.

Other countries such as India, Russia, and Europe are working to develop their own space effort, and though they all are likely to achieve good things in space, all of their proposed projects are modest when compared to what SpaceX is likely to do in the next two decades. For one, none now have the financial resources that can compare to SpaceX’s.

What is SpaceX going to do with those resources? First, it is making sure it will earn more profits, by expanding its Starlink constelallation while building its AI constellation. Next, it is going to develop its Starship lunar lander to NASA so that the agency can proceed with its planned Artemis program. Along the way it will help the agency build that lunar base, while possibly building its own facility for its own reasons.

“Proclaim liberty throughout all the land unto all
the inhabitants thereof.” Photo credit: William Zhang

And finally, it is going to create a Mars version of Starship and begin launching them to Mars, laying out the initial infrastructure for the first Mars colony. That colony will be an American one, owned by private American citizens and run privately. The government will likely be one of its customers and residents, but the colony will be made up of many, all free and working under the laws of the United States, regardless of what the Outer Space Treaty says.

All this because of the wild dreams of one man, an immigrant to America who embraced its fundamental belief that each person has the right to life, liberty, and the pursuit of happiness, following the American ideals of private property, capitalism, and earning profits. Elon Musk did this whole-heartedly, and the result is an engine of prosperity for millions, with no limit in sight.