Latest / AST SpaceMobile Podcast / Anpanman - Why the SpaceX-xAI Merger Changes Everything

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Anpanman - Why the SpaceX-xAI Merger Changes Everything · AST SpaceMobile Podcast

• 0:06
  This is the AST Space Mobile podcast.
• 0:11
  Just basically turn your phone and be seamless, regardless of
• 0:14
  where you are. We don't want the user even to
• 0:16
  know that it's connected by satellite.
• 0:21
  Listen, the opportunity that we have is very, very, very large.
• 0:29
  Everyone, thanks for joining. Sorry for yesterday.
• 0:34
  I was notably absent for part of the day because I was busy doing
• 0:38
  some family stuff. And then in the evening I was
• 0:43
  thrown a curveball. Our, our basement flooded
• 0:47
  because we have neighbors who are somewhat negligent and I
• 0:53
  guess incapable. And they, they had like a pipe
• 0:55
  burst and, and in New York City, that's a bad thing.
• 0:59
  And so I had to deal with that until 2:00 AM, but but it
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  required me to be heavily involved and help, you know, I
• 1:07
  ended up helping a few other neighbors as well.
• 1:09
  So I'm now coming out of that whole mess and quite tired.
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  But I didn't want to talk about AST Space Mobile because even in
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  the depths of that crisis, I was still thinking about the SpaceX
• 1:23
  XAI merger. And so, yeah, I wanted to share
• 1:26
  a few thoughts this morning, which, you know, I'm not looking
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  at the stock price reactions yesterday.
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  I think the market just totally doesn't get it.
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  And so unlike those who have followed the sector closely,
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  this announcement is incredibly bullish.
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  And the only negative I could see potentially is that the IPO
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  that Elan is targeting for June, like maybe that slips a little
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  bit, but I think people may perhaps they don't understand
• 1:56
  mergers quite well. I mean, typically when you have
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  a public company, you know, public to public merger, you're
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  probably looking at a, you know, at at the short end if it's a
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  tender process, a 45 day type of, you know, transaction if the
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  regulatory review is very quick. But typically you're looking at
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  like, well, my cat's jumping up on me.
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  But typically you're looking at a pretty long process, probably
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  4 to 8 months. But here in a private
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  transaction where you have a buyer and a seller that know
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  each other, obviously it's A1 and shareholders know each
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  other. It's not very complicated.
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  They can, they can close the deal pretty much in a few weeks
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  and there's not going to be any HSR, which is antitrust, you
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  know, issues because obviously the companies don't compete and
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  they don't really overlap. And so the deal will close very
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  quickly. And the bankers that they
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  selected, I'm sure they've already started drafting an S1
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  for the IPO. And they will of course have to
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  work especially hard because they're going to have to
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  incorporate XAI business overview risks, things like
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  that. You know, the pro forma
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  financials, that'll be interesting to see.
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  But yeah, for all intents purposes, I think they can still
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  pull off if they work their asses off.
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  They can. And the SEC is, is, is amenable
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  and and cooperative, they can probably still pull off of June,
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  perhaps July IPO. So I think the stocks in the
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  space sector sold off potentially on an idea that an
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  IPO would take, we get delayed by 12345 months.
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  But in reality, because this is a private to private transaction
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  with basically the buyer and seller the same person and
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  parties, the deal is going to close very quickly.
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  Like I, I wouldn't be surprised if we see the transaction close
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  in a handful of weeks here at most.
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  And so during the pendency of that deal, the bankers and
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  attorneys are going to drop the S1 in parallel.
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  So that's not going to slow anything down.
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  And and why this is bullish, I think Red Rum, thankfully, we
• 4:13
  have such a, a wealth of, of knowledge with space mob.
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  I think both Rebron summarized it quite well this morning where
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  he, he did this post on discussing how SpaceX and XAI
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  are working together. And so that leaves open AI,
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  Google, Enthropic, who are the key AI players.
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  But then also there's other folks consider like Microsoft,
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  Amazon, Apple, who's obviously pretty far behind, you know, and
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  then you've got international companies as well, you know,
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  Samsung, other big tech giants that are doing their own thing.
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  But this basically lights a fire under everyone's ass, right?
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  So if you were Google or open AI or Anthropic and you weren't
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  really thinking about space yesterday completely flipped
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  that on Ted, right? And so we know Google has been
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  thinking about space because they're, they're doing some
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  initial work with Planet Labs. Obviously they they've got an
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  investment with Planet Labs also with ASD Space Mobile and a
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  strategic partnership as well. But for all these companies, if
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  space was kind of a novelty, it's now front and center
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  because now if you project out into five years, 10 years, the
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  ability to have data centers in space becomes a huge competitive
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  advantage for Elon Musk and he's vertically integrated.
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  And so for these companies that thrive on compute power and
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  trying to do that efficiently in a cost effective way, they've
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  all got to figure this out. Like it's probably something
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  that they were thinking about in the background, but now it's
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  front and center because now that's where the puck is going.
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  And so with all these companies, they've got to figure out who
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  are they going to partner with, you know, who's who's doing
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  stuff, who's capable. And that's where companies like
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  ASD Space Mobile, which is focused on directed advice and
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  other military applications, but has the ability, already has a
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  building blocks to build data centers in space, becomes a
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  natural partner and partner, meaning someone that can help
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  you develop that technology. Also, maybe they become
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  strategic. You make an investment, you do
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  joint ventures. I mean, there's a whole host of
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  things, but then, you know, I guess on the outside the
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  potential is that maybe it becomes important enough where
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  one of these companies decides to acquire AST space mobile,
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  which I don't think it's a high probability.
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  I think the company has way more value as an independent player.
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  That's that's applying, you know, wholesale data services
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  and and obviously other other services as well on their own.
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  But then if you could, if there were a few there, yeah, there
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  could be a few entities out there that would make sense that
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  would still keep that neutrality.
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  Google would be one, for example.
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  But yeah, I mean, I think this, this rush to space is going to
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  put a lot of pressure on anyone who's competing with any part
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  of, you know, Elon Musk's vertically integrated empire,
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  right? And so you can just assume that
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  Tesla has lots right in there, too.
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  And so any companies that are looking to compete, they'll have
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  to find a partner in space that has, you know, expertise and
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  capability, right? And so these companies AST
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  Rocket Lab, Voyager, you know, red wire, intuitive machines,
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  Carmen, any number of them, they're, they all become very
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  strategically important because they have the expertise and know
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  how to deliver systems in space. And, you know, each of these
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  players have different aspects. Obviously Rocket Lab has, you
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  know, a small launch right now. They're they're looking to get
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  into medium launch and they they build space systems.
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  And so there's a lot of expertise there that somebody
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  would be interested in working with, right?
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  And so that's where, for example, the stories of open AI,
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  I think it was last summer where they had looked at potentially
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  investing in Rocket Lab or potentially merging, something
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  like that. That's where a lot of this stuff
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  over the next few months, these there's probably going to be
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  real concrete moves to build some alternatives to what SpaceX
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  is doing right. And so I mean that that being
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  said there these companies are going to be, they are going to
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  work together. I mean, it's like coopetition
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  you, you cooperate, but you also compete.
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  SpaceX obviously has Falcon 9 and they'll be sending payloads
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  up in space and they, they launched competitors stuff and
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  that's not going to change. And if anything, you know, I
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  caught up very briefly with Kook last night after I was done with
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  my ordeal. If anything, this puts a
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  tremendous amount of pressure on SpaceX to make money because XAI
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  does not make money. And they, it's almost like it's
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  a big furnace, right? You got to keep throwing money
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  at the problem to get better. And so for SpaceX, this idea of,
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  of not optimizing, you know, commercial launch or just doing
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  your own stuff versus taking on commercial dollars outside that,
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  that's going to go away. Not that that was ever an issue,
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  but if people had this idea that maybe SpaceX is just focused on
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  launching their own satellites, they actually need to make
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  external money because XAI is going to need a lot of money and
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  investment on an ongoing basis. Also the the beast to feed,
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  which is going to be this pursuit of data centers in
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  space, that's going to that's going to require a lot of money
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  too. And so running the core
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  business, which is Starlink and obviously you know that Starlink
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  on its own is a big cash cow, generates a ton of revenue and
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  free cash flow that that's OK. But then on the launch side,
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  they're going to have to really be aggressive in, in bringing on
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  additional commercial customers. And, and funny enough, like the
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  fact that they are making this push into data centers in space
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  that is going to create a tremendous amount of demand for
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  launch, right. Even though you've got a ton of
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  launch capacity coming online in 2027, all of a sudden now we've
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  got a new and market that's going to drive demand for that
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  launch. And so for all the launch
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  providers, that's a good thing, right?
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  Because now you've got demand for what's going to be tons and
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  tons of cargoes that that need to go out into space.
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  And so for SpaceX, it's a win win.
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  And for companies like AST space mobile, as I mentioned before,
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  there's, you've got all these players now that will be
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  scrambling to find a, a partner and it's not.
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  And I think maybe perhaps the market will look at some of
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  these space players and, and think, well, you know, this
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  company's like, you know, focused on communications and,
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  and some military applications. But in reality, you've got to
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  look beyond that, right? Like for if a company like
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  Rocket Lab has some pretty interesting technology around
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  solar, hardened gallium arsenide solar arrays, like that's going
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  to be in demand. And you know, thinking more
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  broadly for, I don't want to like keep pushing or call the
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  top on memory guys, but memory and storage, all those companies
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  that were, you know, SanDisk, Micron, Western Digital that are
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  supplying terrestrial data centers, like there's some
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  limitation to the demand of that stuff, right?
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  But then if you think about space, and this is where it gets
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  like kind of kooky, where people say, well, you know, space is
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  unlimited to Amazon Unlimited. That's kind of true actually.
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  Because once you start putting data centers up in space, like
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  just imagine the demand for memory chips, processors, hard
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  drives, those things aren't going to be made in space.
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  They're actually going to be made down here, but there's
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  going to be a huge push to build out capacity for a lot of this
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  hardware that eventually is going to go out in space.
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  And so if you had any limitations of things down here
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  on Earth, then just imagine sending tons and tons of
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  hardware up in space. And so I think all those
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  companies are going to benefit, you know, solar companies are
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  going to benefit a whole host. And, and right now, like, I
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  think obviously the market is digesting this news and people
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  are kind of figuring out what does this mean?
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  What are the implications are are there ways to play this?
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  And as I mentioned before, I think yesterday, a number of
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  space companies like sold off because of the idea that perhaps
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  the IPO for SpaceX is going to be delayed.
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  But I don't think that's the case.
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  And I think as people digest this more and understand the
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  implications, there's, there's a very small group of companies,
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  private or public, that can do this stuff.
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  And so there's going to be this huge demand to partner, to
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  invest, to do business with those companies.
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  And yeah, I mean, literally this is like the phrase actually is
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  true. The Sky's limit.
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  Like it's actually the limit is not Skype space and, and space
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  is big, right? And so I think once people
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  digest this, and maybe it's all side analysts, I don't, I don't
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  know if they'll eventually get there.
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  Maybe in a few weeks or so, I'll be like, oh, you know, this,
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  this news is important because now there's this new data center
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  raced to space, right? And, and there's only a few
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  companies that have expertise that can do this stuff and that
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  can get us there. And that's where you want to
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  invest. And so actually, I've got a hop
• 14:39
  because there's a service provider that's come to help
• 14:43
  pump my basement. I know that sounds funny, but I
• 14:46
  need a dry basement. So I'm going to hopefully
• 14:49
  reconnect with everyone later. But yeah, just take a step back
• 14:53
  and think about what this means and the fact that you're holding
• 14:57
  some of these space companies that are like their precious
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  gems, right? And, and they're needed to make
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  this this push to space A reality.
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  And, and Elon, he has all his stuff kind of lined up and ready
• 15:09
  to go, but everyone else is like, what do I, well, what do I
• 15:12
  do? Who do I, who do I play?
• 15:13
  Who do I work with? Like who, who understands the
• 15:15
  stuff? Yeah, those are the companies we
• 15:18
  own. So, and, and it's not just the
• 15:21
  tech players, but it's also all those data center guys here on
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  Earth. They got to figure their shit
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  out immediately because, yeah, things look good for the next
• 15:30
  few years, but they're going to need a space strategy and and
• 15:34
  some of their expertise down on here is going to translate into
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  space. So it makes sense to partner and
• 15:39
  to invest. So I'll leave it there.
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  And yeah, what? We'll catch up again later.
• 15:44
  Hopefully I'll have good news about my basement.
• 15:46
  But anyway, take care. Numbers are too good to be true.
• 16:09
  Will it work? We don't have a clue, Lily.
• 16:18
  Always. We will be there soon, swinging
• 16:21
  for the stars, the earth and moon, the whisper through the
• 16:27
  static heads. We love the risk.
• 16:35
  Yeah, we love the risk. We love the ribs, We love the
• 16:56
  ribs. Blue but sore.
• 16:59
  Connect the world, Watch zooms rise and see some birds.
• 17:05
  We hold the line through the fear and bliss 'cause we're the
• 17:11
  marble space. We love the race.
• 17:25
  Tears of joy from our first call.
• 17:33
  Reaching light, connecting all hills and seas, where no towers
• 17:43
  stand, Connecting boys. Fear and bliss cause where the
• 18:19
  marble stays we we love the rich right spectrum, chase the beam.
• 18:40
  Never foolish in the whole whole whole event time.
• 18:51
  We have the rich, we we, we have the rich blue.
• 19:02
  But so connect the world. Fox shoes rise and sea jumpers.
• 19:09
  We hold the line through the fear and bliss 'cause we the
• 19:16
  marble Space wait. We love the rich aspects of
• 19:24
  chase being never foolish, you know, hold, hold it in that
• 19:35
  time. We love the rich
• 19:52
  where?