SpaceX
SpaceX job posts hint at building satellite constellations for US military
Published within the last week, unusual SpaceX job postings have begun to combine a range of topics unusual for the company, indicating some level of internal interest in entering into an entirely new industry and mode of operations.
Judging from the job descriptions, SpaceX is looking to hire engineers familiar with integrating third-party payloads onto in-house satellite buses, and they are primarily interested in engineers with Top Secret security clearances.
https://twitter.com/collinkrum/status/1002425606401736704
Given the subtlety of the relevant job postings and the apparent need for high-level security clearances to become involved, it’s extremely difficult to figure out what exactly SpaceX’s goals are. Still, they contain just enough detail to point in the direction of several obvious explanations. These revolve around one industry in particular: satellite operations and sales to or for third parties.
To some extent, these job listings are to be expected: SpaceX has extensive experience building spacecraft (Falcon 9 upper stages and Dragon) explicitly intended for internal use and operations only. Instead, what is surprising about these job listings is the presence of repeated references to “customer payload[s]” in the context of “satellite mission design”, “SpaceX-developed satellite constellations and payload missions”, the “simulation of remote sensing payloads and constellations”, and a need for “on-orbit commissioning” or “activation”.
Put simply, there is no obvious explanation for why SpaceX would need any of those things, at least in the context of the company’s publicly-known activities and business interests. Taken individually, they might be explained by – as described in the same listings – “[SpaceX’s expanding] classified mission manifest”, as it’s well-known that SpaceX is in the process of certifying Falcon 9 and Falcon Heavy to launch all practicable Air Force (USAF) and National Reconnaissance Office (NRO) payloads. Those payloads often need to be placed in high-energy orbits that rely on extended upper stage coasts between orbit-raising maneuvers, essentially requiring modifications to Falcon 9’s upper stage such that it becomes a sort of ad-hoc, short-lived satellite.
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- SpaceX’s first Falcon Heavy launch also happened to be a strategic and successful test of Falcon upper stage coast capabilities. (SpaceX)
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- SpaceX’s first two Starlink prototype satellites are pictured here before their inaugural launch, showing off a thoroughly utilitarian bus and several advanced components. (SpaceX)
Starlink spinoffs
However, in all (conceivable) cases where SpaceX might launch a highly-classified payload for a government customer, the dynamic is still precisely that – launch provider (SpaceX) and customer (NRO/USAF/etc). Just like FedEx or UPS have no ownership of or relationship with the goods they transport, satellite launch providers are simply delivering a (very expensive, fragile, and irreplaceable) payload from Point A (the ground) to Point B (orbit). When UPS ships a new smartphone from the manufacturer to the customer, they most certainly do not perform an “in-house commissioning” – if the customer needs help setting up their new phone, they go to the manufacturer or service provider (cell carrier).
In the same way, satellite commissioning is a generally necessary process where the satellite manufacturer – rarely the actual operator or service provider – raises or fine-tunes the expensive spacecraft’s orbit and verifies that all systems and payloads are functioning as intended – only after that process is complete does the manufacturer finally ‘hand off’ the satellite to the customer that paid for it. In some cases, the manufacturer continues to maintain or at least monitor the satellite in the background as the owner serves its own customers, much like how military airplane manufacturers are typically contracted to maintain or support those planes even after final delivery.
Judging from the need for top-secret security clearance in nearly all of these new job postings, SpaceX clearly has a very particular sort of customer in mind. Be it DARPA, NRO, the USAF, or some totally unknown government actor, one or several of the above entities have expressed explicit interest in coopting SpaceX’s newfound status as a prospective dirt-cheap-satellite manufacturer. If that were not the case, SpaceX would not be keen to publish 5+ engineering job postings with top-secret clearance as an explicit prerequisite.
Project Blackjack
Ultimately, it’s undeniable that the prospect of a completed vertically-integrated launch and satellite service provider could be so alluring that entities like the NRO, USAF, or DARPA simply could not pass up the opportunity to at least give it a try. From a purely speculative perspective, the services and processes SpaceX seems to be in the middle of developing are an almost perfect fit with DARPA’s (Defense Advanced Research Projects Agency) brand new Blackjack program. Perfectly summarized in September by Space News reporter Sandra Erwin,
“[DARPA] wants to buy small satellites from commercial vendors, equip them with military sensor payloads and deploy a small constellation in low-Earth orbit to see how they perform in real military operations.”
DARPA awarded a $1.5M contract to smallsat manufacturer and operator Blue Canyon on in October 2018, small relative to the program’s roughly $118M budget. DARPA has made clear that it plans to finalize multiple contracts with different prospective satellite designers and operators in order to ensure a competitive environment, fuel growth in a fairly new industry, and pave the way for the final procurement of an experimental constellation of 20 satellites by 2021. If successful, it could completely change the way the entire US government procures national security-related satellites, offering a far faster, cheaper, and more flexible route to set up unique capabilities.
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Wedbush Securities is initiating stock coverage on SpaceX (NASDAQ: SPCX), marking the first comments on the company since it went public several weeks ago. Wedbush and its analyst handling coverage, Dan Ives, are widely bullish on fellow Musk company Tesla (NASDAQ: TSLA).
Ives wrote his first note initiating coverage of SpaceX shares on Wednesday with a $190 price target and an ‘Outperform’ rating. The firm believes the company is well positioned off of its IPO because of its wide array of projects, including AI compute power and infrastructure, connectivity projects, and launches.
“We view SpaceX as one of the most differentiated assets within the tech market with a strong footprint across its three core markets, with Starlink driving success with connectivity,” Ives wrote, “Starship launches leading to a demand flywheel and increasing deal flow for its Colossus clusters.”
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Wedbush leans heavily on Starlink, which they say is the “profitability driver given the strength of its recurring revenue base of ~12 million subscribers as of June 5th.” Ives believes Starlink is still in the “early innings” of penetrating the global telecommunications and broadband market, as it only holds less than a 1 percent share. However, this number is sure to increase over time.
It also highlights the importance of Starship, which it says is an “essential layer” of SpaceX’s overall success. SpaceX developing and displaying the ability to reuse rockets is a major cost and reliability advantage “as it reduces the necessary hardware launch costs while generating a feedback loop for future flights to improve their launch flight rate without accelerating capex spend.”
Finally, SpaceX’s recent AI/Compute projects are also very elementary, Ives writes. It is worth mentioning Wedbush said its $190 price target is derived from a valuation forecast that sees the company yielding roughly $2.48 trillion of implied enterprise value.
There are also some factors that Wedbush did not take into account with its initial coverage. The firm wrote in the note:
“We note that there is optional value coming from Starship’s accelerating scale towards sub-$200/kg unit economics, orbital data centers, and enterprise AI monetization as these factors could drive meaningful upside but these face major hurdles, so we do not take that into account with our valuation.”
SpaceX shares are down just over 2 percent today, trading at around $167 at the time of publication.
For years, there have been images and videos across social media platforms that have reminded me of when I was a 15-year-old kid teased by “Xbox 720” videos on YouTube. These videos are of the supposed “Tesla Phone” that Elon Musk was secretly developing in between leading Tesla with its electric cars and SpaceX with its reusable rockets.
Would you buy a Tesla phone ? pic.twitter.com/aaTwvvIJit
— Tesla Owners Silicon Valley (@teslaownersSV) October 6, 2023
Although Musk has put those rumors to bed several times, it was never completely out of the realm that he could get involved in cell phones in some capacity. Think outside the box and more macro-level, though. Instead of reinventing the computer, Musk reinvented connectivity by developing Starlink with SpaceX.
It could be something similar, TD Cowen analyst Gregory Williams said in a note last week, where he hinted SpaceX could be gathering some steam to acquire T-Mobile.
Williams said it would be the “clear choice” for SpaceX if it decided to go through with a network acquisition. He also suggested AT&T.
The move would be possible through selling more of its own stock, which would help SpaceX raise the money to purchase T-Mobile, which would cost roughly $300 billion. It could be one of the moves SpaceX makes post-IPO in terms of an acquisition: it already acquired Cursor AI for $60 billion.
Other analysts, like Dan Ives of Wedbush, believe SpaceX and Tesla will eventually merge into one anyway, and that conglomeration could come as soon as this year, some have said.
The implications of SpaceX purchasing T-Mobile are massive. A combined entity would create a truly ubiquitous network: T-Mobile’s terrestrial 5G towers and Starlink’s growing constellation of Direct-to-Cell satellites. This would essentially eliminate dead zones across the U.S. and potentially globally.
SpaceX would instantly become a full-scale facilities-based carrier with satellite differentiation; a huge advantage. This would pressure AT&T and Verizon heavily.
There are also concerns like a potential reduction in long-term competition, and of course, a deal of that size would face intense scrutiny from government agencies.
The strategic fit is compelling due to the existing Starlink–T-Mobile partnership and complementary technologies (space + terrestrial). It could create a dominant integrated communications player. However, the regulatory, financial, and execution hurdles are enormous — this remains highly speculative with no indication SpaceX is actively pursuing it right now.
Elon Musk
SpaceX’s newest Starmind will make earth data centers obsolete
Elon Musk confirmed Starmind as SpaceX’s AI satellite constellation name, targeting one million orbital compute nodes.
Elon Musk confirmed that Starmind will be the official name of SpaceX’s planned AI satellite constellation, following a trademark filing by xAI that surfaced earlier this week. Starmind is what’s being described to the FCC as a constellation of up to one million AI satellites
It’s worth noting that SpaceX’s Starlink communication satellite and Starmind are built on the same orbital infrastructure concept but serve entirely different purposes. Starlink is a connectivity network, with satellites receiving and relaying data between points on Earth, and functioning as a high-speed internet backbone in space. The satellites themselves do not process or think, and move information from one place to another, the same function a fiber cable performs underground.
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Starmind, on the other hand, is something completely different, and tather than moving data, its satellites would compute data through artificial intelligence and directly in orbit using onboard processors powered by large solar arrays. Where a Starlink satellite is essentially a very fast pipe, a Starmind satellite is a server. The practical implication is that Starmind would allow AI models to run inference, process queries, and generate outputs from space, then beam results down to users anywhere on Earth within milliseconds, and without the data ever needing to travel to a terrestrial data center.
Starship will be able to carry 30 to 50 AI1 satellites per launch, delivering the equivalent of dozens of server racks per flight, with no land acquisition, no power grid approval, and no cooling infrastructure required on the ground.
SpaceX is pursuing this new technology as terrestrial data centers are running into hard limits such as lack of physical space, community opposition, and power and water consumption at a scale that is increasingly difficult to permit. Space has unlimited solar power, natural vacuum cooling, and no zoning boards. Musk said in a June 8 video presentation that he expects space to become the lowest-cost location to deploy AI compute within two to three years. Two AI1 prototypes are scheduled to launch in early 2027, with volume production targeted for the end of that year at a new facility called Gigasat.
The real world applications Starmind enables extend well beyond powering Grok. A constellation of orbiting AI processors could run inference workloads for any paying customer, anywhere on Earth, with latency measured in milliseconds rather than the seconds associated with ground-based cloud routing across continents. Starmind, if it scales as described, would make SpaceX the landlord of AI compute the same way Starlink made it the landlord of satellite internet.
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