Michael Burry Questions SpaceX's Valuation Despite AI Contracts
Michael Burry, known for his role in the housing crisis and "The Big Short," has questioned whether SpaceX is worth its $1.8 trillion valuation at IPO or even a more modest $1 trillion today. He argues that none of SpaceX’s current businesses—space exploration, telecom, social media, and AI compute—justify such a high price tag. However, recent developments in the company's AI division may challenge Burry's skepticism. SpaceX has secured major contracts with Anthropic ($1.25 billion/month), Google ($920 million/month), Reflection AI (another $150 million/month), and an unnamed customer ($1.11 billion/month). These agreements could generate up to $40.8 billion annually, positioning the division as a serious player in cloud computing. Despite these gains, Burry's concerns remain relevant: SpaceX spent $15.8 billion on AI infrastructure alone in Q2 and still operates at a loss. The contracts also include short termination clauses (90 days), which could allow customers to exit quickly if alternatives arise or demand drops. Additionally, the long-term profitability of AI compute may be limited as the technology becomes commoditized. To justify its $2 trillion valuation, SpaceX must not only grow revenue but achieve significant profit from both its AI and space businesses.
Tickers: $SPCX
Topics: AI computing contracts Michael Burry SpaceX valuation analysis