Hedge fund manager Gavin Baker: Textbook IPO execution, SpaceX aims to become the "East India Company of the Solar System" and achieve "the greatest in history."

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SpaceX made its debut on the public market with a nearly flawless IPO, rising over 30% in two days without any significant volatility throughout.

Renowned hedge fund manager Gavin Baker believes that this company not only has accessible near-term commercial drivers but is also likely to become "the most important enterprise in human history"—he likens its ultimate form to the "British East India Company" of the Solar System era.

Baker highly praised the underwriting team from Goldman Sachs and Morgan Stanley, describing this IPO as "textbook perfect"—the pricing was precise, with no excessive value left on the table, nor was there any dramatic surge-and-collapse scenario. He also pointed out that over 10,000 SpaceX employees subscribed to their own company's stock during the IPO, and foundational market data shows that the main force behind post-IPO buying comes from institutional investors, contrary to some media depictions of retail investors taking over. The overall supply-demand structure is much more solid than generally expected.

In terms of recent commercial developments, Baker focuses on two key variables: First, the rapid monetization of data center computational power—according to Altimeter's disclosed data, SpaceX’s collaboration with Google yields approximately $50 billion in revenue per gigawatt (GW) of compute power, with monetization efficiency about 2–3 times that of typical new cloud firms; second, the AI code editor Cursor has already penetrated more than half of the Fortune 500, demonstrating significant commercial traction. Baker stated: “SpaceX’s commercial story is not as far-fetched as outsiders imagine.”

From a longer-term perspective, Baker believes that once Starship achieves full reusability, the comprehensive orbital compute deployment costs will be only half those of ground data centers, fundamentally rewriting the economic logic of computational infrastructure. Combined with the vision for multicolony civilization on the Moon and Mars, he admits SpaceX is the “most unique experience” of his career, and asserts it is “most likely to become the most important enterprise in human history.”

Textbook Underwriting: Precise Pricing, Nearly 20% First-Day Surge

Baker described the execution of SpaceX’s IPO as exemplary. The nearly 20% first-day surge came with no significant volatility, with neither conservatively low pricing leaving excess upside on the table nor an imbalanced supply-demand resulting in a wild spike followed by a sharp drop. Baker said the underwriting work of Goldman Sachs and Morgan Stanley was of extremely high quality; the stable price discovery process itself is the highest affirmation of professional execution.

Regarding the public market’s future assessment of SpaceX, Baker admits quarterly results cannot be avoided but emphasizes that the public market’s tolerance for the capital investment cycle is often higher than expected.

He cited Tesla and Amazon’s experience when building AWS: Both companies, during their large-scale infrastructure investment phases, saw the public market show considerable patience, with a long-term perspective far exceeding that of many in the venture capital ecosystem. In his view, this historical trend applies equally to SpaceX.

Near-Term Catalysts: Gigawatt Compute Monetization and Cursor's Enterprise Penetration

Baker concentrates near-term commercial drivers to be tracked in the coming 12 months onto two main lines.

The first main line is the rapid launch and monetization of data center compute power.

NVIDIA CEO Jensen Huang has clearly pointed out that SpaceX builds data centers faster than any other player in the industry.

According to Altimeter, SpaceX has reserved about 20% of orders for NVIDIA's next-generation Rubin chips, which, compared to the previous Blackwell generation, have stronger plug-and-play characteristics that effectively shorten data center build cycles. Baker also expects that Groq’s LPU (Language Processing Unit) will be integrated into some compute deployments within the next six to nine months, further optimizing inference-end latency. He notes that if 2 to 4 GW of compute power can be brought online within a year, this will directly generate revenues on a massive scale.

The second main line is the enterprise-scale penetration of Cursor.

This AI-native code editor has already entered over half the Fortune 500 companies. Baker notes that Composer 2.5, trained on Colossus 2 clusters and refined through reinforcement learning (RL) and supervised fine tuning (SFT), has demonstrated Pareto Dominant comprehensive advantages across multiple evaluation metrics. He believes that once migrated to stronger base models, its commercial value will be further unleashed.

On the tension between internal and external allocation of compute resources, Baker remains optimistic. He believes SpaceX’s ability to simultaneously supply compute power to external clients like Anthropic and Google stems from their high confidence in quickly ramping up their own compute capacity. He also notes some external contracts have exit clauses, giving SpaceX flexibility to reclaim compute resources for its own model training in the future.

Orbital Compute: Disrupting Ground Data Center Cost Logic

Baker presents a clear mathematical framework for the economics of orbital compute, which is one of his most persuasive arguments for SpaceX's long-term value.

He points out, the comprehensive cost of deploying 1 GW of compute power on the ground is about $60 billion, with $25 billion for power and cooling infrastructure, and $35 billion for IT core equipment like GPUs, CPUs, switches, and high-bandwidth memory.

In orbital space, there is no need to bear the expensive power access and cooling costs of Earth, only IT equipment costs and launch expenses. Baker estimates that once Starship is fully reusable, bulk launches of equivalent compute scale to orbit would cost about $5 billion, bringing total deployment cost down to about $30 billion—half that of ground deployment.

He further notes that ground data centers' power and cooling costs continue to rise with inflation, while orbital deployment is not constrained by this, meaning the cost gap will widen over time. Baker believes ordinary land is not on the core value chain for compute, with only direct access to nuclear power stations in special real estate being an exception—but such assets are extremely rare.

Solid Supply-Demand Structure: 10,000 Employees Hold Shares, Institutions Lead Position-Building

Baker believes market concerns about SpaceX’s post-listing lockup selling pressure are overstated, and the supply-demand structure is actually much more solid than it seems.

He notes that over 10,000 SpaceX employees subscribed to their own company’s stock in the IPO, with very strong holding willingness. More importantly, SpaceX has offered employees and early investors official buyback and liquidity opportunities in the primary market every six months. Anyone wanting to exit could have sold in previous rounds of employee stock tenders. Remaining shareholders are predominantly long-term holders, not short-term arbitrage funds waiting for lockup expiry.

Baker also notes that his core data shows the main post-IPO buying force is from institutional investors, not just retail buyers as rumor suggests. He generally endorses retail investors, saying they’ve outperformed most professional fund managers over the past three and a half years, and the term “retail investor” should not carry a derogatory tone.

Ultimate Bet: “East India Company of the Solar System Era”

Baker makes no secret of his deep holding and strong faith in SpaceX, viewing it on the axis of his most important career investment experiences.

He previously held 15% of NVIDIA shares for his fund when its market cap was under $2 billion, and 10% of Tesla when it was also under $2 billion. However, he says SpaceX is “the most special experience”— “I think it’s likely to become the most important, iconic company in human history, bar none, perhaps even removing the ‘bar none’ qualifier.”

His ultimate argument rests on several yet-to-be-fulfilled but increasingly clear milestones: Starlink is connecting schools and hospitals in low-income countries to the internet at extremely low cost; once Starship is fully reusable, orbital compute will be far more economical than ground deployment; and if SpaceX ultimately builds human cities on the Moon and Mars, achieving multi-planet living, it will evolve into a Solar System-level ‘British East India Company.'

Baker admits there remain “a massive number of tough engineering and physics hurdles” to overcome before reaching this endgame, but he sees a fairly high probability of seeing much of this happen in his lifetime. He especially suggests investors bring children to Boca Chica, Texas, or Vandenberg, California, to watch heavy rocket launches live—“the sound and roaring heat are so much more direct and awe-inspiring than watching through a screen, making you feel the miracle that humans as a species can accomplish this.”

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