Editor’s Note: This article uses SpaceX as a starting point to explore a grand vision of the era of space industrialization. It examines how a company can break down an extremely uncertain long-term mission into an executable industrial system through organizational capability, technological pathways, and capital narratives.
What sets SpaceX apart is that it integrates rocket reusability, satellite internet, AI computing power, robotics, semiconductor manufacturing, and lunar industrialization into a single roadmap, creating a cross-industry, cross-cycle infrastructure strategy.
The author's key judgment is that SpaceX's long-term value depends on its ability to continuously reduce the marginal cost of accessing space and to expand space into new industrial domains such as energy, computing power, and manufacturing, beyond just scientific and defense applications.
The article opens by describing Musk’s extreme compensation plan at SpaceX: he only receives meaningful rewards if the company reaches a $7.5 trillion valuation and establishes a permanent city of one million people on Mars, or operates data centers in space consuming 100 terawatts of power. This structure itself reveals SpaceX’s ultimate narrative: launching satellites more cheaply is merely the starting point; the true goal is to extend energy, computing power, manufacturing, and human habitation beyond Earth.
Currently, AI infrastructure is facing bottlenecks in power, land, permitting, and supply chains, and the marginal costs of traditional terrestrial expansion are rising. If computational expansion begins seeking energy and deployment space beyond Earth, the boundaries between aerospace companies, cloud providers, energy firms, and semiconductor manufacturers will be redrawn.
Viewed within this framework, the key question about SpaceX may no longer be how many rockets it launches today, but whether it can transform "access to space" into an industrial platform for energy, computing power, manufacturing, and the expansion of civilization.
Of course, this narrative heavily relies on Musk’s judgment regarding technological progress, cost curves, and organizational execution, and reflects a clear investor perspective. Readers are better served by viewing it as a speculation on future industrial structure: its value lies in placing space, AI, and energy—three previously separate topics—within the same cost curve, while also prompting us to consider where the next generation of industrial platforms may emerge.
The following is the original text:
Elon Musk’s compensation package at SpaceX is designed around two goals. The first bonus will be unlocked when the company reaches a valuation of $7.5 trillion and establishes a permanent human colony of at least one million people on Mars. The second bonus will be unlocked when SpaceX operates data centers in space that consume at least 100 terawatts of power—more than 1,000 times the total electricity consumption of all data centers on Earth. If neither goal is achieved, Musk will receive nothing beyond his annual salary of $54,080 since 2019.
Board members who signed this compensation plan have spent the past two decades witnessing Musk make one seemingly impossible prediction after another about SpaceX—only to see each one come true. He said SpaceX would send humans into orbit, something no private company had ever done before; today, SpaceX routinely transports NASA astronauts. He said SpaceX would land and reuse orbital-class rockets, while the entire industry viewed boosters as disposable; since then, SpaceX has accomplished hundreds of such recoveries. He said that, even when satellite internet was a graveyard for failing companies, it could be worth tens of billions of dollars; today, Starlink’s revenue has grown from zero to $11.4 billion in just a few years. These predictions were often aggressive in timing, but almost never wrong in direction. And that original direction was enshrined in the company’s mission as early as 2002: to make humanity a multiplanetary species. Therefore, the board has tied his compensation directly to this mission itself.
If this mission sounds like science fiction, it’s perhaps because it really is.
Iain M. Banks spent twenty-five years crafting a civilization called "the Culture." By almost any reasonable standard, it may be the best utopian society ever imagined. In this society, humans coexist with superintelligent AIs known as "Minds," which manage vast orbital habitats as large as small worlds. The relationship between humans and AIs is neither one of enslavement nor competition, but of partnership. No one is required to work. No one goes hungry. The Minds bear the immense computational burden of running space cities, while humans simply focus on being human—a task that, as it turns out, is a full-time job in itself.
SpaceX’s three autonomous drone ships—floating platforms used for landing Falcon 9 boosters at sea—are named after sentient starships from Iain M. Banks’ novels: “Of Course I Still Love You,” “Just Read the Instructions,” and “A Shortfall of Gravitas.” During an interview at the 2023 UK AI Safety Summit, Musk was asked what a good AI future would look like. He replied: “Banks’ Culture series is by far the best imagining of an AI future. Nothing else comes close to giving you a sense of a utopian, or at least a gradualist utopian, AI future.” In fact, he has been subtly revealing what he aims to build all along through the names on his landing ship hulls.
"Civilization" is not a frictionless paradise. Banks’s novels are filled with war, conspiracy, and moral complexity. They are utopian because this civilization has resolved the prerequisites for survival to a sufficient degree, allowing trillions of humans to freely devote themselves to what Banks calls "the truly important things in life—such as sports, games, love, studying dead languages, savage societies, and impossible problems, and climbing mountains without a safety net."
This future rests on four prerequisites. First, the ability to harness a significant portion of a star’s energy output—orders of magnitude greater than the total energy produced by today’s human civilization. Second, large-scale physical intelligence: machines capable of building, mining, smelting, and repairing anything, anywhere, without human intervention. Third, affordable digital intelligence that surpasses biological intelligence. Fourth, a reliable, low-cost, high-frequency method of transporting mass off Earth, since none of the above can be scaled exclusively on Earth.
Work backward from the future
Most analyses of SpaceX look forward from the present: rockets, satellites, contracts, revenue. But to truly understand what’s happening, it’s more useful to start from the destination and work backward.
Mars City. The goal is to establish a self-sufficient city of one million people on Mars within the lifetime of people alive today. The challenge lies in “self-sufficiency.” This means that even if Earth stops sending spacecraft to Mars, the city must still be able to survive—it must produce everything on its own: food, water, air, energy, medicine, machinery, and ultimately, the ability to reproduce more humans. According to SpaceX’s own estimates, transporting one million people and millions of tons of cargo there within a few decades will require thousands of Starship flights, with more than ten launches per day during each transfer window. Due to the orbital mechanics of Earth and Mars, these windows last only a few weeks and occur only once every 26 months.
Lunar city. This is a closer and more achievable rehearsal ground. The presence of ice in permanently shadowed craters at the lunar south pole, combined with ridges that receive continuous sunlight, makes it naturally suited as a base location. But Musk isn’t just talking about a scientific outposts—he’s envisioning something much grander. He imagines factories on the Moon producing AI satellites and launching them one by one into space using mass drivers. Mass drivers are another concept Musk borrowed from science fiction: essentially electromagnetic launch systems that leverage the Moon’s one-sixth Earth gravity and lack of atmosphere to launch solar satellites into deep space at an industrial scale. Building these satellites locally on the Moon also provides the raw materials: lunar regolith contains approximately 20% silicon and 10% aluminum by weight—the two primary ingredients for solar cells and satellite structures. Musk explains, “If you want to scale beyond one terawatt per year, you have to go to the Moon.”
Orbital data centers. Musk bets that, in a few years, space will become the most economically attractive place to deploy AI data centers. The bottleneck for AI is energy. Outside of China, energy supply has seen almost no growth, while demand for AI computing power is growing exponentially. Solar panels in orbit can generate four to ten times more electricity than equivalent panels on Earth, depending on ground-based sunlight conditions, because space has no atmosphere, no day-night cycle, no clouds, and no seasonal changes. NASA calculated this decades ago, and now rockets have finally become cheap enough to make it feasible. Musk expects that within five years, the amount of AI computing power launched into orbit by SpaceX each year will exceed the total cumulative AI computing power installed on Earth. This is why SpaceX merged with xAI in February. Rockets and intelligence are becoming one and the same problem.
Starship is the vehicle that enables all upstream activities. Starship V3 completed its maiden flight this year, becoming the largest and most powerful rocket ever built by humans—taller than a 40-story building and generating more than twice the thrust of the Saturn V that carried astronauts to the Moon. According to NASA, the cost of reaching orbit was previously around $18,500 per kilogram. In 2010, the first Falcon 9 reduced this cost by approximately 85%, bringing it down to about $2,700 per kilogram. In 2018, Falcon Heavy further lowered it to around $1,400 per kilogram. Starship is designed to be the world’s first fully and rapidly reusable spacecraft, aiming to reduce costs even further to between $100 and $500 per kilogram. What once cost billions of dollars per launch now costs only tens of millions.
Starlink is the cash flywheel that funds everything else. According to SpaceX’s IPO filings, the connectivity business unit—nearly entirely comprised of Starlink—generated $11.4 billion in revenue in 2025, a year-over-year increase of approximately 50%, with an adjusted EBITDA margin exceeding 60%. As of March 2026, Starlink serves 10.3 million subscribers across 164 countries, operating via more than 9,600 satellites. Originally conceived as a side project to utilize the company’s own launch capacity, Starlink is now emerging as one of the greatest consumer businesses in history. When a16z conducted due diligence on SpaceX in 2019, multiple people told us the business model could never work: the technology required for user terminals had previously only been used on F-22 fighter jets and Navy destroyers, never mass-produced for consumers. SpaceX’s earliest terminals cost around $3,000 to manufacture but were sold for $499. Yet they found ways to slash manufacturing costs—and proved the skeptics wrong.
Falcon 9 is the workhorse that buys time for everything else. It is the only orbital-class booster in the world to achieve large-scale reusability, typically completing over twenty missions before retirement. In 2025, SpaceX launched 83% of the total mass placed into orbit globally. Despite competitors having a half-century head start, SpaceX now delivers more total payload to orbit than all other countries and companies combined.
This is the entire stack, from top to bottom. After generations, “civilization” sits at the top. Falcon 9 and Starlink reside at the bottom, paying the bills for everything today. Each layer enables the one below it.
SpaceX CFO Bret Johnsen described what all of this looks like from inside the company:
Musk created a culture: you start by setting goals that seem almost insane at first, and then, step by step, you realize you’re moving toward something entirely achievable—like going to Mars. When I joined the company in 2011, people would roll their eyes whenever someone mentioned Mars and making humanity a multiplanetary species. Today, when we say that, the reaction has truly become: “What year?”… I think one of the things Elon has done exceptionally well is set these goals and built an outstanding business model around every key technological asset needed to achieve the ultimate objective.
Fool Index and "Algorithms"
Musk did not originally intend to found a rocket company. In 2001, the 30-year-old Musk was contemplating what he wanted to do after PayPal. He had long been interested in space, but when he searched for NASA’s plans to send humans to Mars, he was surprised to discover there were none. So he conceived a plan: send a small greenhouse to Mars and transmit images back to Earth. His idea was that seeing a green sprout on the lifeless red planet might reignite public interest in space and renew political will to fund genuine Mars missions. All he needed was a rocket to deliver the greenhouse.
Later that year, he traveled to Moscow in an attempt to purchase a refurbished intercontinental ballistic missile. This was his first of two trips to Russia. The meetings were said to be filled with vodka and plenty of bluster. “We would all walk into a small room, and each person would have a whole bottle of alcohol in front of them,” recalled Adeo Ressi, Musk’s best friend from his University of Pennsylvania days, who accompanied him on the trip, in a 2012 interview with Esquire. The Russians did not take Musk seriously; at one point, a chief designer even spat on Musk and his team in contempt. His second trip occurred in February, when Musk asked how much a missile would cost. They replied, $8 million each. When Musk countered by offering $8 million for two, Musk’s aerospace advisor Jim Cantrell remembered the response was something along the lines of, “Kid, no way,” implying Musk had no money. Musk concluded they weren’t serious about doing business and walked away.
Cantrell thought the trip was over. On the return flight, he and Mike Griffin ordered drinks and toasted to finally leaving Moscow. Griffin, who later became NASA administrator, was serving as an advisor on the second trip to Russia. Musk sat in the row in front of them, hunched over his laptop. Then he turned around. “Hey guys,” he said, “I think we can build this rocket ourselves.” He showed them a spreadsheet listing the raw materials needed for the rocket—aluminum, titanium, copper, carbon fiber—and the cost of each. The cost of raw materials amounted to just 2% of the quoted price. As Musk later said, “Clearly, you just need to figure out a smart way to assemble these materials into the shape of a rocket.”
Within months, Musk risked $100 million to found a rocket company—more than half of the approximately $180 million he had earned from selling PayPal. He then established SpaceX in a warehouse in El Segundo, California. He extended founding team invitations to five people; three declined, including Cantrell and Griffin. The two who accepted were Tom Mueller and Chris Thompson. Mueller later became Vice President of Propulsion and the company’s first employee; Thompson was the second employee, responsible for operations and production.
Years later, Musk referred to the principles behind his spreadsheet diagnostic tool as the "idiot index." If the price of a component is much higher than the cost of its raw materials, either you’re an idiot, or you’re working with one. It sounds like a joke, but it’s the foundation of SpaceX’s strategy.
Every component procured by SpaceX is accompanied by a "fool factor" calculation. In the company’s early days, there was a legendary story involving Steve Davis. Fresh out of Stanford, he joined SpaceX as employee #14, tasked with sourcing an actuator for the Falcon 1 rocket’s upper stage to enable steering. When he reported that a traditional aerospace supplier quoted $120,000 for the part, Musk laughed and said the component’s complexity was no greater than that of a garage door opener. Musk gave Davis a $5,000 budget and told him to build it from scratch. As biographer Ashlee Vance recounted, Davis spent nine months refining the design and ultimately created a functional actuator costing just $3,900. When Davis sent Musk a detailed breakdown of this technical achievement, Musk replied with a characteristically brief email: “Ok.”
To drive the fool's index toward its theoretical lower bound, you must vertically integrate and exert end-to-end control over the entire process. However, vertical integration incurs fixed costs that are only economical at high volumes; in the rocket industry, high volume means breaking away from the industry’s traditional ways of operating.
Traditional launch providers like ULA and Arianespace treat each mission as a custom project. Customers specify the orbit, payload, and integration requirements, and the launch provider designs a tailored mission around that satellite. This model assumes only a few launches per year, resulting in extremely high per-mission costs and making mass production impossible.
SpaceX flipped the script. They released a Falcon user guide that clearly specified the rocket’s exact parameters and told customers: “Design your satellite to these specifications.” At the time, this was seen as an extremely aggressive approach and caused SpaceX to lose some early business. But it unlocked the ability to manufacture wheels.
Standardization and reusability reinforce each other. Because every Falcon 9 is identical, a recovered booster can be re-certified and prepared for another flight. The first Falcon 9 booster to fly twice achieved this milestone in 2017. By 2020, a single booster had flown five times; by 2021, ten times. Today, the record holder has completed 35 missions. This reusability has transformed the economics of spaceflight, making it difficult to see how competitors could catch up. In 2021, Musk estimated that the marginal launch cost of a Falcon 9, under optimal conditions, delivering 15 metric tons to orbit—excluding overhead allocation—was approximately $15 million. He stated this was “about half to one-third the cost of other options.” Today, SpaceX launches a rocket every two to three days using reused boosters, while competitors manage only a few custom launches per year.
But SpaceX's advantages are not just about economies of scale, vertical integration, and better strategy—they also come from speed and culture.
Traditional aerospace companies use analysis to eliminate uncertainty. In NASA’s polite wording, Boeing’s commercial crew program “employs a mature systems engineering approach, investing in engineering research and analysis prior to construction and testing to mature the system design.” Measure twice, cut once. SpaceX does the opposite. The company builds numerous low-cost prototypes, pushes them to failure, learns from those failures, and iterates. Starship’s testing program has produced the most spectacular series of explosions in aerospace history—but each failure is a data point, showing the team where reality diverges from the model.
Anyone who has worked in both worlds can see this contrast. Garrett Reisman, a former NASA astronaut who flew on two space shuttle missions, left NASA in 2011 to join SpaceX as a senior engineer. He once described the prevailing attitude at NASA toward SpaceX: “They’re a bunch of cowboys; they’re dangerous; they’re going to get people killed.” What changed his mind was seeing firsthand how SpaceX operated. “They were building in a month what might have taken NASA a year. We were stunned.”
The clearest example is the Falcon 1 project. Between 2006 and 2008, SpaceX launched four Falcon 1 rockets from a small atoll called Kwajalein in the Pacific Ocean. The first three failed, but each failure was different and offered valuable lessons. The first was a fuel leak. The second was abnormal propellant sloshing. The third was a collision during stage separation caused by residual engine thrust. By September 2008, the company had funds for only one more launch. And SpaceX was not the only company on the brink of collapse. Musk’s electric vehicle company, Tesla, was also just weeks away from bankruptcy. He had to decide whether to concentrate his remaining PayPal cash into one company or split it between the two.
“That was truly an incredibly difficult decision. In the end, I decided to split the remaining money I had and try to keep both companies alive—but it could have been a disastrous decision that led to both companies failing,” Musk recalled. “I never thought I would reach a breaking point, but I was genuinely close to it.” He couldn’t choose between them because, in his worldview, both missions were essential: Tesla to accelerate the world’s transition to sustainable energy, and SpaceX to make humanity a multiplanetary species. “All available resources had to go into these companies,” Musk’s then-fiancée, Talulah Riley, said in the BBC documentary series “The Elon Musk Show.” “He gave me the option to walk away. He said, ‘The hardest part is coming, and you don’t have to stay through this with me.’”
The fourth launch succeeded. That December, just weeks before SpaceX was about to run out of funds, NASA awarded it a $1.6 billion cargo contract. When NASA called Musk to deliver the news, he was overcome with relief and blurted out, “I love you.”
This pattern, forged through rapid failure and quick correction, later became the culture of every project within the company. It is this same pattern that enables SpaceX today to iterate Starship between flights, whereas traditional aerospace projects often take years to redesign a vehicle after a single flight anomaly.
This approach is superior to alternatives because, when faced with problems you don’t yet fully understand, you cannot arrive at a perfect solution through thought alone. Reality is the only sufficiently effective validator; the key is to reduce the cost of consulting reality enough to make it possible to ask frequently.
The above is the SpaceX iteration cycle told as a story, but there is also a formal version. Over the past two decades, Musk has codified SpaceX’s approach into a five-step operational process the company calls “the Algorithm.” Tim Berry, who worked at SpaceX for ten years leading the Falcon 9 and Falcon Heavy upper stage production teams, said this method has been “drilled into our heads.” Walter Isaacson published the standard version of this approach in his biography of Musk:
First, question every requirement. Each requirement should be accompanied by the name of the person who made it. You must never accept a requirement simply because it comes from a department, such as legal or security. You need to know the exact individual who proposed it, and regardless of how intelligent that person is, you should still question the requirement. The most dangerous requirements come from smart people, because others are less likely to challenge them. Then, make these requirements less absurd.
Second, remove all removable parts or processes. You may then have to add some of them back. In fact, if you don’t end up adding back at least 10% of what you removed, you didn’t remove enough.
Third, simplify and optimize. This step should occur after the second step. A common mistake is attempting to simplify and optimize a component or process that shouldn’t exist in the first place.
Fourth, accelerate cycle times. Every process can be sped up, but this should only be done after completing the first three steps. Musk once said that in Tesla’s factory, he made a mistake: he spent a lot of time speeding up processes that he later realized should have been eliminated.
Fifth, automation. Automation should come last. Tesla’s mistake at its Nevada and Fremont factories was attempting automation from the start, rather than first questioning requirements, eliminating unnecessary parts and processes, and clearing out inefficiencies.
Most engineering organizations skip directly to step five, automating a process that shouldn’t exist in the first place. SpaceX, however, follows these steps in order, every time and across every part of the company. Once this “algorithm” runs enough times on a piece of hardware, it begins to resemble nothing else in the industry.
Raptor 3 is the result of a team iterating on the same engine design for a decade. It delivers 22% more thrust than Raptor 2, is 40% lighter, and no longer requires a thermal shield, as the external piping and wiring have been integrated into the engine’s metal structure through 3D printing. Musk said: “The effort required to simplify the Raptor engine, embed secondary flow paths, and add regenerative cooling to exposed components has been enormous. We are nearing the known limits of physics.”
No known engine program in aerospace history has iterated at this pace. The Space Shuttle Main Engine flew with essentially the same design for its final three decades. The RD-180, which powers the Atlas V, is a derivative of an engine designed in the 1970s. In contrast, SpaceX has already completed a third entirely new design of the Raptor in less than a decade, with each generation making significant improvements over the last.
The same philosophy applies to people. By mid-2018, the reusability of the Falcon 9 had settled into a reliable rhythm, and Musk turned his attention to a satellite internet constellation—the project that would later fund everything upstream. The Starlink team was based in Redmond, Washington, and many senior engineers came from Microsoft, where the development pace was slower than Musk wanted. In June, he flew to Redmond and fired the senior leadership team. He then brought in young star engineers from the rocket division and gave them one year to launch the first operational satellites. This style of company management was extremely harsh. Media reports at the time suggested the department was imploding. But 11 months later, in May 2019, the first satellites launched. Musk removed the bottleneck and moved on to the next problem.
This is how he managed everything. In 2018, when Tesla was in the midst of “production hell,” struggling to scale up Model 3 production and burning cash at a life-or-death pace, Musk actually moved into the factory. Years later, in an interview, he recalled: “I lived in the Fremont and Nevada factories for three straight years. I slept on the floor under my desk so that during shift changes, the entire team could see me. It was important because if the team felt their leader was happily elsewhere, sipping mai tais on a tropical island, it would crush morale. Since they could see me sleeping on the floor during shift changes, they knew I was there. It made a huge difference—they gave it their all.” Later, he turned this into a company-wide rule: the higher your position, the more visible your presence must be.
To find someone whose operational style as CEO can be compared to Musk’s, one must go back to the era of industrialists in the late 19th and early 20th centuries: Henry Ford, Andrew Carnegie, Thomas Watson, Andrew Mellon, and Cornelius Vanderbilt. What makes Musk’s operational style unique is his direct involvement in the day-to-day work. It is said that he shows up at each of his companies every week, identifies the biggest problem, and solves it. He does this consistently for 52 weeks a year, allowing each company to address its 52 most critical issues annually.
An engineer who joined SpaceX from another aerospace company described their experience this way: “It’s like being parachuted into a zone of astonishing capability—everyone around you is absolutely competent in their role.”
Constellation
SpaceX appears to be a single company, but a more useful way to understand it is as the central node of a constellation of companies. All these companies are operated by the same individual, building toward the same long-term mission, and are nearly impossible to separate. For the past two decades, Musk has been assembling a set of companies, each addressing a bottleneck that would otherwise limit the others. Now, they are beginning to compound upon one another.
The merger with xAI in February is a microcosm of what SpaceX is becoming. If computational power ultimately goes into orbit—as Musk bets—it is SpaceX that holds the most credible path to deploy it at the scale required by AI. Launching mass into orbit and scaling intelligence production may become the two most decisive capabilities of the coming decades, and now they are reinforcing each other under one roof.
xAI has introduced Grok, a cutting-edge model that holds a unique position in real-time information due to its access to X’s real-time data stream. xAI has also brought together the engineers who built the Colossus 1 and Colossus 2 supercomputers at a speed many thought impossible.
The construction of Colossus is worth pausing to examine. xAI took over an old factory in Memphis and deployed 100,000 GPUs for training in just 122 days. Once the racks began arriving, they had the cluster operational in only 19 days. Nvidia CEO Jensen Huang, commenting on Musk, said: “Starting from a concept, building a large facility, implementing liquid cooling, powering it up, obtaining permits, and completing it all in that timeframe—it’s superhuman. As far as I know, there is only one person in the world who could do this. What they achieved is unprecedented. No one has ever done this before. A cluster of 100,000 GPUs is easily the fastest supercomputer on Earth at the time. Typically, such a supercomputer requires three years of planning, followed by equipment delivery and another year to get everything running.”
A project that would take other companies in the industry at least four years, Musk and the xAI team completed in four months.
In May, Anthropic agreed to pay SpaceX $1.25 billion per month for exclusive access to Colossus 1’s computing power. Weeks later, in an amended filing for its IPO, SpaceX disclosed that Google will pay $920 million per month for access to 110,000 GPUs—roughly half the computing capacity allocated to Anthropic. Together, these two deals generate approximately $26 billion in annual revenue from just two customers, despite the business not existing until earlier this year, before SpaceX absorbed xAI. With chips, power, and land all in short supply, SpaceX is becoming one of the few companies with sufficient AI infrastructure to both rent out computing power and pursue its own ambition of building leading-edge models.
From SpaceX, xAI has obtained a more sustainable solution to power constraints. Musk believes that, in the coming years, electricity will become the bottleneck for AI. Generating sufficient power to meet the computational demands he anticipates would require grid expansion, new power plants, and multi-year regulatory approvals that the industry simply cannot afford. In his view, orbital solar power is the answer, as it is virtually limitless. And SpaceX is the only company with the launch capability to scale computing power into space. Whether he is right is one of the most important open questions in technology. But SpaceX’s IPO filings reveal that the company takes this bet extremely seriously: it expects AI to become by far the largest market in the company’s history. Compared to these ambitions, the space business that originally founded the company appears almost negligible.
Tesla is another crucial piece in this constellation, and the integration between the two runs even deeper in another way. Tesla and SpaceX share the same founder, the same talent pool, the same operational culture, and a set of increasingly overlapping technology roadmaps.
Tesla provides three things for the SpaceX-xAI side of the constellation. First, chips: AI5, AI6, and Dojo3, all internally designed by Tesla. Musk has clearly stated that these chips are not just for automobiles, but are building blocks of a larger compute stack for the constellation. AI5 handles autonomous driving inference, AI6 is designed for Optimus and AI data centers, and Dojo3 is intended to pair with the planned AI7 for orbital computing. Second, robots. Tesla’s bet is that Optimus will serve as the physical AI layer in factories, warehouses, and homes, enabling these environments to operate without human labor and ultimately supporting Musk’s vision of lunar and Martian cities. Third, solar energy. Musk has said that Tesla and SpaceX are each building toward an annual solar cell production capacity of 100 gigawatts to support AI infrastructure on Earth and in orbit.
Next is TeraFab. In April, Tesla disclosed that it had begun ordering equipment for a research semiconductor factory at the Giga Texas campus. Musk told investors on Tesla’s Q1 2026 earnings call: “We expect this to be a project of approximately $3 billion, potentially producing thousands of wafers per month.” SpaceX, meanwhile, is separately funding the construction of a much larger facility, as no existing fab can scale up at the speed Musk envisions. Once fully operational, this facility is designed for a capacity of about one million wafers per month. But Musk’s vision is measured in gigawatts. “This isn’t a promise of what we’ll do,” Musk said last week. “This is what we’re going to attempt—and believe we can likely achieve: reaching an annualized rate of about 1 gigawatt in space AI computing power by the end of next year. Ideally, we’d then scale up by an order of magnitude each year—reaching 10 gigawatts annualized in two and a half years, and perhaps 100 gigawatts in three and a half years. Then, depending on global chip manufacturing progress and TeraFab’s development, we could further expand to 1 terawatt annually—that’s 1,000 gigawatts—double the United States’ total electricity consumption.”
Comparing Musk to the Gilded Age does touch on some truths, but it also highlights key differences. Carnegie built a steel empire; Vanderbilt built a railroad empire. Each dominated a sector of that era’s industrial foundation. Musk, however, is attempting to advance multiple fields simultaneously—space, energy, artificial intelligence, robotics, tunnels, brain-computer interfaces, autonomous vehicles—and bend them all toward a single goal that most consider fantastical. Whether it will all succeed remains unknown; many of these efforts may fail. But the attempt itself has no historical precedent and could become a training ground for a different century.
The world opened by SpaceX
Before the space shuttle was retired in 2011, the cost to send one kilogram of cargo into orbit was approximately $54,500. Once Starship becomes operational, Musk expects this cost to drop to $100 per kilogram. When the cost of reaching space decreases by more than 500 times, all industries theoretically possible in space will begin to become economically viable. There are many such industries.
The closest historical analogy might be the transcontinental railroad. Before 1869, traveling from New York to San Francisco by stagecoach took six months, cost roughly a year’s wages, and carried a very real risk of death. After 1869, the journey took just one week. The railroad itself was an extraordinary engineering achievement, but the real story was what it enabled: giants like Sears Roebuck, Swift and Armour, Standard Oil, and ultimately U.S. Steel, which consolidated the industrial empires born during the railroad boom.
If the Falcon 9 is equivalent to the transcontinental railroad of the space age, then Starship could be the upgraded counterpart to the airplane. The railroad opened up an entire continent; the jet age opened up the entire planet; Starship will open up the solar system.
Industrialized Moon
Since humans first looked up at the Moon, it has held scientific significance. Today, it is beginning to hold economic importance, as it is an entire world composed of industrial raw materials.
Let’s start with how to transport goods off the Moon. As mentioned earlier, the Moon has only one-sixth of Earth’s gravity and no atmosphere, making mass drivers—rather than rockets—the natural choice for launching cargo from the lunar surface. This would fundamentally transform the economics of transportation. Once the orbital system is in place, the marginal cost of shipping finished goods will be determined primarily by electricity rather than fuel; and on the Moon, electricity means sunlight. A package is launched from the lunar surface, reenters Earth’s atmosphere with a heat shield, deploys a parachute, and lands at a recovery site. When throughput reaches sufficient scale, the marginal cost begins to resemble that of freight shipping rather than traditional spaceflight.
Then there’s what can be manufactured there. The same lunar regolith that provides the silicon and aluminum needed for solar panels and satellites is the raw material for the entire industrial base. The space revolution of the 2030s and 2040s could see autonomous mining vehicles processing lunar soil around the clock, smelters producing aluminum and silicon, and factories assembling satellites, solar panels, and the chips that power them. Most industries on Earth have a lunar counterpart waiting to be built—and SpaceX cannot possibly build all of them alone. Those who establish the “Lunar Alcoa,” “Lunar Caterpillar,” and “Lunar Union Pacific” will become the titans of the 21st century.
Computing power in the sky
By 2030, the bottleneck for artificial intelligence is likely to be electricity, not chips. The obvious response—building more solar power in Texas or Nevada—will hit limits faster than most realize. Generating 1 terawatt of continuous solar power requires roughly 1% of U.S. land area, and new utility interconnection approvals take a year or longer. xAI’s construction of Colossus in Memphis required deploying an entire temporary fleet of gas turbines, navigating state permitting approvals, and establishing an independent power hub across the state line in Mississippi just to bring online 1 gigawatt of power. Scaling this to the hundreds of gigawatts needed for AI infrastructure is simply not feasible. Even the internal vanes and blades for gas turbines used to back up solar power are already booked through 2030 and beyond.
The solution is to move computing power to places where sunlight is already abundant. This will become easier once Starship achieves daily flights and orbital deployment becomes routine. As the cost curves for rocket launches, solar panels, and chips continue to decline, economic viability will further improve. SpaceX CFO Bret Johnsen explained: “We’re scaling up factory production and benefiting from falling silicon costs, so our costs will decrease over the coming years. If you look at ground-based solutions, the trend is going in the opposite direction—everything is becoming more expensive: cooling methods, electricity rates won’t drop, and land and regulatory challenges are increasing.”
A common objection comes from those who imagine launching a Colossus-sized building into orbit when they hear “space data center,” but that’s not the case. “It’s roughly the size of a Blackwell rack, with solar wings extending about 500 feet on each side. You place it in a sun-synchronous orbit so the solar panels are always in sunlight,” said Gavin Baker, an early investor in SpaceX. “Over the years, I’ve spent a lot of time at Starbase and spoken with many SpaceX engineers. I truly believe they are the most talented group of engineers on Earth, and they are very confident they’ve solved this problem.”
In fact, Musk believes the AI Sat Mini will be easier to build than Starlink satellites. “You still need some laser links, but you don’t need the extremely complex antennas on Starlink satellites,” Musk explained. “Compared to the two, AI satellites are easier to design... AI satellites don’t require any magic. Much of the technology we’ve already developed for Starlink V3 satellites. Compared to what we’re already doing, we don’t consider this a particularly difficult problem.”
He expects that within five years, the AI computing power launched into orbit by SpaceX annually will exceed the total cumulative computing power ever installed on Earth. Roughly, this amounts to 10,000 Starship launches per year—that’s more than one launch per hour, around the clock. By the late 2030s, with lunar mass drivers online, the petawatt threshold will come into view: equivalent to 1,000 times the computing power deployed in 2030, with satellites launched into deep space at a rate of one every few minutes.
Mars
The Mars mission was originally slated to begin this year. In September 2024, Musk announced that SpaceX would launch five uncrewed Starships during the November 2026 transfer window, carrying Optimus robots to test landing systems, locate ice, and begin building infrastructure for future crewed missions. In May 2025, he said the probability of meeting this timeline was 50/50, but earlier this year, the situation changed.
In a post on X on February 8, Musk announced that SpaceX would delay its Mars timeline and shift its short-term focus to building a self-sufficient city on the Moon. The reason is that Mars launch windows occur only every 26 months and require a six-month flight; in contrast, the Moon offers an accessible window every ten days with a two-day flight time. “This means we can iterate and complete a lunar city much faster than a Mars city,” he wrote. “That said, SpaceX will still work toward building a Mars city and begin doing so in about five to seven years, but the highest priority is securing the future of civilization, and the Moon is faster.”
On the surface, this looks like a shift, but it’s actually the moment when the path to a million-person city on Mars becomes clear.
The topic of orbital data centers became clearer toward the end of 2025 and into early 2026, assigning the Moon a new role. Achieving petawatt-level orbital computing requires mining, smelting, and manufacturing solar panels, radiators, and satellite structures on the Moon, then launching them into orbit using mass drivers powered by lunar surface energy. Such an industrial base demands a permanent population, and a permanent population requires a city. This city could be fully funded by the orbital computing industry while serving as a rehearsal for Mars. Every challenge SpaceX must solve to build a self-sufficient Martian city—radiation shielding, life support, in-situ resource utilization, governance of extraterrestrial permanent populations, and supply chains across gravity wells—is also a challenge that must be solved first to build a lunar city. Building a lunar city will enable SpaceX to learn how to build a Martian city through much faster iteration cycles.
According to Musk’s timeline, the first uncrewed lunar landing demonstration is targeted for as early as 2027, with a lunar city to follow within less than a decade. Mass drivers, lunar industrial construction, and lunar manufacturing for orbital computing infrastructure will advance in parallel. Then comes Mars.
But the hardest part won’t be transporting people—it will be building the infrastructure on Mars capable of supporting them. A lunar rehearsal will help. Optimus will also help. Musk repeatedly emphasized during his Mars speech at Starbase in May 2025 that early uncrewed Starships will carry Optimus robots to prospect for resources and begin constructing infrastructure in preparation for human arrival. The company is building a production line in Fremont with an annual capacity of one million units, and another in Giga Texas with an annual capacity of ten million units. These robots are still in early production stages and have not yet performed meaningful practical work in Tesla factories, but the production capacity coming online over the next two to three years will be critical to establishing the first Martian base.
Conscious Sun
Since absorbing xAI in February, SpaceX's mission statement has been: to scale up and create a conscious sun, to understand the universe and extend the light of consciousness to the stars.
Depending on how you interpret it, this is either the most absurd statement ever placed on a mission page by a serious company—or the most honest one. We believe it’s the latter.
If you only glance at its organizational structure, SpaceX appears to be a launch services provider with an internet subsidiary and a recently acquired AI lab. But if you examine its technical roadmap closely, it is the only company on Earth currently assembling the complete prerequisite stack needed for a post-scarcity transition. And if you seriously consider its mission statement, it represents a serious effort by one of the most execution-driven founders of our time to push humanity through that bottleneck: on the other side of which lies either our emergence as an interplanetary species, sharing the universe with the intelligent machines we’ve created—or our reduction to a footnote on a rocky planet, having failed to make that leap.
By the time the first child born on Mars asks her parents why their family is there, Starship will have been flying daily for thirty years. The factory down the block will be operated by Optimus robots running descendants of Grok’s models, which have been self-improving for two decades. The computing power sustaining her city comes from data centers in space—built by other robots using lunar regolith and launched into orbit by a mass driver. For nearly a generation, that mass driver has been launching satellites into deep space at a rate of one every few minutes. Her parents traveled to Mars aboard a vessel named after a starship from Iain M. Banks’s novels, because at some point in the early 21st century, a teenager who had read those books decided to spend his life making them real.
Banks understands those who choose to go to Mars. Civilization is paradise, but his most fascinating characters are those who leave paradise. This civilization has solved scarcity, and what remains is humanity’s longing for a difficult journey. Even when paradise is next door, the frontier is where meaning lies.
Musk once said that the recruitment pitch for early Mars colonists would be an “Shackleton-style recruitment,” inspired by the famous 1914 advertisement for the trans-Antarctic expedition: “Men wanted for hazardous journey. Low wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honor and recognition in case of success.” This advertisement was almost certainly not real, but it has been retold for a century because it captures something true about those who volunteer to embark.
Why would anyone find this appealing?
Musk said: “Life cannot be just one painful problem after another. There must be something in the world that inspires you and makes you happy to be human when you wake up in the morning. Earth is the cradle of humanity, but you cannot remain in the cradle forever. It is time to set out, to become a civilization that navigates among the stars, to venture into the stars and expand the scope and scale of human consciousness. I find this incredibly exciting. It makes me happy to be alive. I hope you feel the same way.”
