Space X investor: This year's IPO will be "the biggest wealth-creating event in history," Musk is still undervalued, and excess rocket capacity is driving the emergence of space data centers.

Space X investor: This year's IPO will be "the biggest wealth-creating event in history," Musk is still undervalued, and excess rocket capacity is driving the emergence of space data centers.

Shaun Maguire, partner at Sequoia Capital, believes the upcoming SpaceX IPO will be "the healthiest wealth-creation event in history," as the company he calls "the greatest ever" has seen its valuation soar from $36 billion in 2019 to $800 billion.

This top investor, who also has stakes in five Musk-led companies, recently stated that the market still severely undervalues Musk, and SpaceX's surplus rocket capacity could give birth to space data centers—potentially "one of the largest market opportunities in history."

Highlights from the interview video:

The logic victory of contrarian investing: In 2019, the market only saw SpaceX as a rocket launch company with limited growth. Thanks to his physics background, Maguire predicted Starlink’s technical feasibility and invested heavily when the market gave it a “zero valuation,” turning insight into gains from $36 billion to $800 billion.“Potential-to-momentum” management philosophy: Unlike typical CEOs eager to cash out, Musk tends to accumulate infrastructure while having zero revenue (e.g., Gigafactory and Starship). Once technology crosses the critical threshold, he releases stunning momentum via million-per-year production rates or by redefining the industry model.Laser links reshape global communications: Starlink’s vacuum laser network of over 9,000 satellites achieves faster intercontinental data transfer than undersea fiber optics, evolving it from simple access to a core digital infrastructure for global long-distance data.D2D rewrites the telecom industry: By acquiring spectrum and optimizing V3 satellites, SpaceX’s satellite-direct-to-phone tech (D2D) is on the verge of explosion, expected to achieve mass adoption by 2028, and may overtake fixed consumer networks as its main revenue source in the next five years.Starship kickstarts space data centers: With Starship entering reliable mass production by 2026, SpaceX will face surplus rocket capacity, prompting it to use low launch costs to solve power and land bottlenecks for terrestrial AI data centers, creating a trillion-scale space computing market.The “atomic” edge in the AI race: Maguire emphasizes that AI’s endgame will be limited by physical resources (atoms) like electricity and hardware, and through xAI, Tesla Energy, and SpaceX’s space infrastructure, Musk possesses foundational support rival software-only AI giants cannot match.The healthiest wealth-creation event ever: The upcoming SpaceX IPO is deemed “the largest wealth boom in history.” The company’s mission-driven staff, forged through hardship, will channel this massive wealth more constructively, and because of grand ambitions like Mars, the core team isn’t expected to leave as a result.

Maguire revealed on the podcast "Sourcery with Molly O'Shea" that Sequoia Capital has invested about $1.2 billion in SpaceX since 2019, which is now worth roughly $12 billion, realizing a tenfold return. He says the decision then was seen as "crazy" in the industry, since, based on the global launch market’s size, SpaceX had almost no room for valuation growth, and the market gave zero value to Starlink, Starship, and other business lines.

Maguire points out that SpaceX’s soaring valuation is mostly driven by four waves of Starlink’s evolution: the consumer network has reached 9.2 million subscribers; the enterprise market covers major airlines; the government/defense business launched the Starshield product line; and Direct-to-Cell phone-to-satellite service already has 6 million users by the end of 2024. He predicts 2028 will be pivotal for Direct-to-Cell, with its scale possibly surpassing the consumer network.

The more disruptive move is the space data center plan. Maguire says once Starship is reliably operational in 2026, SpaceX will face surplus launch capacity, while AI data centers on Earth struggle with power, land, and regulatory limits. He has completed the relevant economic models, and believes this will be “one of the largest market opportunities ever,” with the public set to see the complete analysis in SpaceX’s IPO documents.

Contrarian Bet in 2019

Maguire’s investment decision was extremely unusual at the time. In 2019, SpaceX completed only 13 launches all year, with a global launch market of $5–6 billion. Even with 100% market share and a 40% EBITDA margin, net profit after capex would only be about $1 billion, making SpaceX’s $36 billion valuation 36 times theoretical max profit.

More importantly, the market was pessimistic about SpaceX’s core growth drivers. All previous satellite network companies—Iridium, Globalstar, Teledesic—had failed; Starlink was seen as another destined money-losing project. Starship was still in early development and far from commercial.

Maguire’s physics background allowed him to validate Starlink’s technical feasibility ahead of time. He said he knew what questions to ask, ultimately concluding, “This time is different.” Sequoia then invested $1.2 billion, becoming a key SpaceX shareholder.

SpaceX now operates about 9,000 satellites in orbit, which transfer trillions of bits per second via laser links. Maguire likens this to Global Crossing laying transatlantic fiber in 1999, making SpaceX’s infrastructure in space functionally equivalent, and laser transmissions in vacuum are faster than through fiber.

The first wave, consumer network, has reached 9.2 million subscribers by end of 2024. Maguire notes that Starlink went from first revenue to $1 billion in annual revenue in just 12 months. Users can connect to satellite internet simply by installing a 10–12 inch disk antenna.

The second wave, enterprise market breakthrough via airlines. Qatar Airways, United Airlines, JetBlue have signed up to provide Starlink service on aircraft. Maguire notes a marketing effect: rural passengers find in-flight Starlink faster than their home wired internet, prompting them to subscribe for home use.

The third wave, government and defense market, with Starshield for military drones, battlefield comms, and security networks.

The fourth wave, Direct-to-Cell, could be most disruptive. Phones connect directly to satellites (no extra equipment needed); SpaceX satellites masquerade as cell towers and phones switch when there’s no ground signal. By the end of 2024, the service already has 6 million subscribers, growing rapidly.

In 2025, SpaceX spent $17 billion to acquire EchoStar’s 2GHz spectrum, a bold signal for phone satellite ambitions. Maguire predicts 2028 as the critical year for Direct-to-Cell, when enough V3 satellites are in orbit, spectrum and antennas are optimized, and large-scale phone satellite service becomes reality. He sees Direct-to-Cell surpassing the consumer network in five years.

Space Data Centers: Surplus Capacity Spurs New Opportunity

Maguire sees space data centers as SpaceX’s next big thing. The logic is clear: Starship is set for reliable operations around 2026; once all Starlink and Direct-to-Cell satellites are deployed, SpaceX will have surplus launch capacity. Meanwhile, the AI industry on Earth faces severe bottlenecks—shortage of power, difficulty acquiring land, strict environmental regs, and NIMBY effects make building new data centers harder.

This mismatch: surplus supply for launches, exploding demand on the ground but limited supply. Maguire notes that six months ago, he wasn’t sure about the micro math, but now, after running the numbers, the verdict is “It will be huge.”

Musk has discussed space data centers publicly, though the full economic model isn’t out yet. Maguire says when SpaceX’s IPO docs go public, the market will see how huge this opportunity is. He thinks it could be “one of the biggest market opportunities ever.”

This view also explains why Maguire feels Musk is still undervalued. Despite Musk’s net worth topping $400 billion, Maguire thinks the market should focus on the “derivative of progress”—the rate of change, not just current position. He notes xAI is building the world’s largest coherent training cluster, and Musk is “the best atom guy in the world”—“atoms” being hardware, infrastructure, manufacturing, the scarcest resources for AI.

Maguire reasons that the AI bottleneck is soon shifting from model capability to inference compute, whose constraint is access to electricity. xAI, combined with Tesla energy and SpaceX’s space data centers, will create a unique combination other AI firms can’t match.

“The Healthiest Wealth-Creation Event in History”

Maguire thinks the SpaceX IPO will be completely different from previous tech IPOs. He calls it “the healthiest wealth-creation event in history,” due to SpaceX’s employee profile.

People who’ve been at the company 15+ years didn’t join for money, but because they wanted to build rockets and send humans to Mars. They’ve endured fights with physics, battled eco groups, debated skeptics, and survived countless near-deaths. This forges a frugal, pragmatic, mission-driven culture.

Maguire predicts these folks won’t splurge like typical tech millionaires but will instead fund public art, sponsor science research, etc. He knows early employees planning to become artists post-IPO. “They weren’t in it for the money, and they’ve worked a long time to reach this point.”

Most importantly, SpaceX’s mission isn’t done. Milestones for the next five years include: Starship routine flights, direct-to-cell mass deployment, space data center launch, moon base construction, Mars mission prep. Maguire cites employee mindset: “Why retire when humanity is about to go to Mars?”

Maguire also invested in Musk’s other four companies: xAI, Neuralink, The Boring Company, and X. He’s bullish on them for the same reason: Musk builds companies by “accumulating potential energy, then converting to kinetic.” These companies seem slow now and generate little revenue, but once they hit the inflection point, growth will shock the market.

From $36 billion to $800 billion, Maguire’s tenfold return is built on deep understanding of this unique business model. His latest judgment: this is just the beginning.

Full interview below:

SpaceX IPO and Space Data Centers

Host Molly: Let’s start with SpaceX’s upcoming IPO. Lots of people want to participate. I’m curious what’s going on inside. The latest buzz is data centers in space. So, what should people know about SpaceX right now?

Shaun: Great question. I’m honored to be a major investor; I’ll say upfront, I view it as a huge responsibility, so I try not to share anything not public yet, but I’m very good at packaging what’s public because I follow so closely. Honestly, I personally think SpaceX is the greatest company ever. It’s just getting started. Many great portfolio companies, but SpaceX is on a different level. It’s so fun to be involved, like launching rockets into space.

One lesson for me from watching Elon build companies: he focuses on bottlenecks and the most important things, then once those get sorted out, he shifts attention to what you can do with the new capabilities. Example: the company didn’t seriously start working on Starlink until November 2018, two years after Falcon 9 reusable flights were achieved. So the team intuitively understood—the big, hard part was getting Falcon 9 reusable; with launch capacity reliable, it was time to think about what to do with excess capacity—then Starlink became serious.

I think in the last six months, the space data center idea took off similarly. You need Falcon 9 reuse to be reliable first. Elon and the team now have tons of confidence that Starship will be ready for reliable, reusable flight this year or in 2026. That’s my strong feeling. Very soon, within two years, the company will basically have excess launch capacity. Like, they can launch all the Starlink data satellites they want, all the direct-to-cell satellites—and by 2028 or 2029 there will still be surplus launch capacity.

So, on one side, you start thinking: what else should we do with launch capacity that’ll be available in about 3 years? On the other, we all see what’s happening in AI: power constrained, regulatory limits—maybe even more restrictive. This surplus launch supply, with Starship coming online, combined with Earth’s urgent pain points makes the team very serious about, “Can we really build data centers in space? Does the math check out?”

I mean, Elon’s talked about it publicly many times—the answer is yes. The public hasn’t seen the full case or calculations, but I’ll just say, the math is highly compelling; I think space data centers—six months ago I was on TBPN and said, macro logic makes sense but micro math wasn’t done yet. I’ve now run the numbers: it’s absolutely massive.

Molly: Was that the big algorithm we saw coming in?

Shaun: I don’t even know which algorithm.

Molly: You’ve got a huge whiteboard over there. So intense.

Shaun: Unfortunately, I don’t use that whiteboard—that’s someone else’s.

Starlink’s Business Model and Direct-to-Cell

Molly: I’d also like to talk about Starlink. Can you break down this business for those who don’t know?

Shaun: Sure. Starlink is an amazing business. Its first wave was providing rural internet via satellites. Simple version: launch a rocket. Originally, V1 launches put up about 60 Starlink satellites. Now we’ve had several generations—there are about 9,000 satellites in orbit.

These satellites use laser links to talk to each other, sending mass data around the constellation—terabits per second. It’s a huge space infrastructure. On the ground, people have a user terminal, a little 10–12 inch dish called a phased array antenna. It’s a beam of radio waves you can steer to lock onto a satellite, switching every 20 seconds or so as satellites pass overhead.

That’s it: home, car, plane, wherever, you just need the ground terminal and satellites overhead. Data comes down to Earth and moves around in space; basically, replicated the whole world’s long-haul fiber cable system. Think back to 1999: Global Crossing laid fiber across the Atlantic, made huge money transmitting data. Now, the cable equivalent is in space—no wires, lasers talk to each other in free space.

It’s the best way ever for long-distance mobile data. Starlink now carries a big chunk of the world’s long-distance traffic. Consumer business was act one, then enterprise: airlines are an early hit market. Qatar Airways was one of the first, United signed up, JSX was actually first. When people fly and use Starlink, they realize—if you’re in a rural area—plane Starlink is way faster than wired/wireless at home, so more people buy Starlink because of it.

Latest products are government—Starshield—and then Direct-to-Cell, which is crazy. Direct-to-Cell is space-based cellular; at first, it’s for...technically works anywhere, but SpaceX is limited by how much data it can serve to dense cities. Ground cell networks only cover a few miles around each tower; Starlink satellites cover everywhere their orbit passes—deserts, oceans, remote areas, so excess bandwidth in remote, shortage in cities. Direct-to-Cell started in partnership with carriers, e.g. T-Mobile in the US. When T-Mobile signal is bad, phones can switch to Starlink; data comes directly from space to the phone. Satellites essentially impersonate cell towers. SpaceX announced, as of last year, 9.2 million Starlink consumer users, 6 million Direct-to-Cell. Direct-to-Cell is growing very fast. My five-year projections say Direct-to-Cell could get bigger than consumer internet.

Molly: What’s the unit economics? Compared to other businesses?

Shaun: It’s incredible. Some seasoned analysts have made estimates—I probably know too much, but I’ll just say margins are very high, unit economics are amazing. It’s like Africa leapfrogged phone lines to cellphones. Starlink leapfrogs the need for ground infrastructure; Ghana schools use Starlink for learning. Bottom line: unit economics are disclosed in the S-1, but they’re phenomenal.

Molly: When we interviewed David Sacks, we had a red buzzer for “no comment.” I’ll accept “no comment,” but that was a great answer.

Shaun: Yes, trying not to say too much.

Molly: A fun question—what are the unintended consequences of releasing internet and cellular connectivity worldwide? I already noticed it just flying—United, didn’t believe it at first...

Shaun: Penetration isn’t that high yet; most of United’s fleet will be upgraded in about nine months as planes get annual or semi-annual maintenance.

Molly: A good thing.

Shaun: Yes, good.

Molly: What unexpected effects will Starlink access plus autonomous vehicles/mobile tech have?

Shaun: I call it “ubiquitous internet.” It’s wild—it’ll feed back into Elon’s other companies. If you have an autonomous Tesla paired with Starlink (direct or roof dish), one day they’ll probably build antennas right into cars—bigger, optimized radios.

Imagine your car with Starlink, driving itself, perfect internet everywhere; your car is your living room—Zoom calls, sports, chatting with family, whatever. We’re headed to everywhere internet. Optimus (robot) will use it, military drones use it, African kids use it. When disasters happen anywhere, SpaceX offers Starlink nearly free because ground infrastructure is typically down.

Overall, an insanely resilient layer; in many cases, it beats old ground methods, especially outside cities. It’s super cool.

SpaceX Roadmap and Vertical Integration

Molly: Internally, what’s most exciting in SpaceX? Starship, direct-to-cell, next 10 years? What’s Starbase like? What’s it like investing?

Shaun: The atmosphere is amazing—team feels on the edge of history, everything so far is warm-up compared to the next five years. First, Starship—2026 will be the year of Starship, and people don’t realize what that means; it’ll totally transform industries over five years. 2028: year of direct-to-cell; needs time for spectrum, antennas, tons of V3 satellites; by 2028, major space cellular. Space data centers—don’t know exactly when, but it’ll be one of the biggest market opportunities ever.

Soon they’ll land infrastructure on the Moon and Mars, eventually Optimus robots, then people. All of this is coming faster than people expect. I was just at Hawthorne yesterday, Starbase in two days—it’s wild. Starbase makes Hawthorne seem tiny, old—like Super Nintendo vs modern PC.

I wish others could see the scale of SpaceX’s buildout; the degree of vertical integration is probably the highest of any US manufacturer, which is why data centers can happen extremely fast.

Assessment of Musk and xAI

Molly: Was SpaceX your first Elon investment?

Shaun: Yes, I first invested in 2019, total about $1.2 billion. All funds, stake worth $12 billion now at the $800 billion valuation. IPO will be even higher. Honestly, it’s the earliest stage for the company. Lucky to invest in most of his other firms; I’m extremely bullish. Elon is still massively underestimated.

Molly: You really think so?

Shaun: 100%. He’s only gotten 10% of the credit he deserves.

Molly: What was it like getting into SpaceX initially? The environment back then wasn’t as enthusiastic.

Shaun: Sounds wild, but investing in SpaceX in 2019 was highly contrarian. Hard to convince others—even myself the prior year wasn’t sure. Back then, it was just a launch company. 2019—13 launches, global launch market $5–6 billion, max EBITDA margin 40%, full market share maybe $2 billion EBITDA, capex-heavy industry, so only about $1 billion profit if you own it all. Valued at $36 billion. If you can’t find another market, growth prospects seemed crazy or dumb.

Some visionary investors got in early and deserve credit—FoundersFund, Valor, Vy, Steve Jurvetson (DFJ today); but in 2019, it was very contrarian.

Also, when we first invested, Tesla was valued around $70 billion (after “production hell”), public sentiment much less favorable than now. Starlink—all previous internet constellations had failed. Maybe my only real edge was my physics and comms background: I understood Starlink’s tech would work a year ahead, knew what questions to ask.

So, for two years, Starlink and Starship were given zero value; after Starlink hit about $1 billion in revenue (just 12 months after first revenue), it became a consensus play. For two years, you could buy lots of stock, but most didn’t get it. Now—good luck getting shares, nobody wants to sell. I’m super-excited for the IPO; it’ll be incredible.

Molly: How did early caution and supporters affect how Elon brings in new investors? It seems a tight circle.

Shaun: Yes, and that’s why I’m so careful with what I say—I don’t want to breach what’s not public. At Elon’s scale, he needs to trust those around him. People must be patient through tough times and trustworthy on roadmap details. It’s a very small group; I’m lucky to invest in most of his companies.

Molly: How did you get into the other companies?

Shaun: Once you work with SpaceX and meet people, that’s pretty much it. Teams at other companies are equally stellar, just earlier in their development.

Molly: Which other company is most underrated?

Shaun: Honestly, all are deeply undervalued. xAI is especially. Revenue is obviously way smaller than OpenAI, Anthropic, Google, but the pace of progress is shocking. Just look at the “derivative of progress.”

For inference, the bottleneck will be electricity—even with the best models, if you can only serve 1–2% of the market, growth and expansion are limited. I think xAI will—Elon is the world’s best at “atoms” (hardware/physical). Atoms will be the decisive factor in the AI race. Elon builds companies differently: he builds potential energy, then converts it; most others go kinetic immediately. He’ll build gigafactories for five years with no cars/revenue, then suddenly make a million cars.

SpaceX spent nearly a decade going from Falcon 9 to reuse, then kicked off Starlink very fast. Now Starship, another decade, zero revenue for now, will soon become a huge number. xAI is building the world’s largest training cluster, hasn’t focused on monetization yet. To me, it’s crazy people don’t get this. I’m not bearish on other model companies—I just think xAI will shock everyone with its scale. I’m bullish on all the companies—Boring Company, Neuralink; Tesla is public so no comment, but I’m bullish on all of them.

AI CapEx and IPO Discussions

Molly: What’s your view on massive spending in this sector?

Shaun: I think it’s rational.

Molly: Okay.

Shaun: A year ago, I might have been more pessimistic about spending, but now I see the logic. Ironically, SpaceX’s IPO will help all private companies this year, including those in AI—creates lots of liquidity and draws capital to tech; will fuel the next wave of AI builds.

Rumors say Anthropic will IPO in 2026; this will catalyze more funding for the sector. I think—we’ve reached AGI (however defined): for math, physics, and CS, best models now beat most PhD students. The coming economic value is extreme. Programming is the first vertical; the next-gen Google, next-gen search, you can ask anything—like my kid has eczema, ask for suggestions, get good answers from different models—it’s very useful, and has replaced a lot of behaviors for me and others. The usefulness is ramping so fast, it justifies the capex, in my view.

Molly: Hope lots of liquidity events in the future.

Shaun: Big ones coming in ‘26, very key to keep the party going.

Molly: I just interviewed Snowflake CEO Sridar—great guy. Asked about big private lockups—should these companies go public?

Shaun: My partners Pat Grady and Carl Eschenbach led an amazing early investment in Snowflake—$1B valuation, $100M check, years before the IPO.

Molly: His views on private lockups? Should companies go public? I also asked Vlad (Robinhood CEO)—“retail king.”

Shaun: I actually took grad real analysis math at Stanford with Vlad—prof Brian White, wore koala shirts.

Molly: Really?

Shaun: Yes. I watched Vlad’s whole journey, he’s a legend.

Molly: Have we moved past “stay private forever” to “going public is good” stage? Vlad says it’s better than you’d think.

Shaun: Depends a lot on company/timing. For SpaceX, the data center opportunity is a perfect IPO catalyst—I think it’s 100% right. For others, like Stripe, staying private makes sense. Ultimately, for a good business, public markets are almost always a better capital source than private, but private lets you control for ultra-long-term investment. It’s a trade-off—capital vs long-term flexibility. I hope more companies go public sooner. As an investor, I’m biased—we need liquidity events to keep industry running. SpaceX’s IPO could catalyze more; many say if SpaceX stays private, so can I.

Molly: Agreed.

Shaun: I hope SpaceX going public will spur many companies; if you’re over $1B revenue and profitability or at Q round and still private, you’d better have very good reasons.

Wealth Creation and Corporate Culture

Molly: Given your early-to-growth stage risk exposure and SpaceX’s IPO, this is a big LA event. One of the biggest wealth-creation moments in a long time.

Shaun: Also huge in Texas.

Molly: Right, but here in LA, and you invest in lots of local companies. First, what surprise impact on productivity might it have? Some founders worry employees with...

Shaun: 0.7% equity, you know. In many companies, it harms culture, but not SpaceX—it’s so mission-driven. Next five and the following five years have the coolest milestones ever. Many on the team have worked 20 years or at least 5–10 years. It’s like, why slow down or retire when we’re about to send people to the Moon and Mars?

SpaceX’s reason for working goes beyond most company missions—it filters out the bad behaviors found in typical “got rich” tech companies—e.g., in a social app, if you get rich, you either keep giving kids AI junk, or go play on your yacht (no shade, just a general statement). The values at SpaceX are just different; the mission is one of history’s coolest/purest. It’s above typical incentive systems.

Molly: Given huge wealth events in LA/Texas, and Sequoia’s many exit cases, how do you advise founders/teams for these liquidity events? Any wealth tips?

Shaun: Honestly, no quick answer. Most important is psychological. Lots of tailored coaching—case by case. I’m not worried for SpaceX; those folks will do mind-blowing things with their money. There’s a meme about tech billionaire wives and NGOs doing bad work—frankly.

I think SpaceX will be the opposite—the long-timers are the highest earners; those there 15+ years have fought eco groups, physics, always building hardware, forced to be frugal. The culture is built for it. They’re naturally thrifty and driven by very positive things. Most joined not for riches but for the mission—love space, building rockets, hands-on work, wanting America to stay competitive.

It self-selects; most early folks didn’t expect it to be huge. They got rich slowly, with real skills and hands-on world experience; in a world where so many designs are for bad things.

This crowd—I think we’ll see more beautiful travertine sculptures in cities, just for public art. Two close early SpaceX friends may become artists after IPO, that’s their passion.

I think it’ll be real—not like tech wealth events elsewhere, because the nature of the work, slowness, low motivation for money, and the hardship to get here. Prepare for more truly positive and weird things.

I hope—used to go to Burning Man for 10 years—one camp friend made the “Movable Feast,” a motorized (or pedal-powered) moving dinner table; you wear black-tie, go to the table, ride it around, have multi-course meals in the desert dressed up. Sounds nuts, but it’s so whimsical, fun, connects people. This SpaceX bunch will bring lots of that real-world creativity. Tons more invention.

Molly: Sounds like healthy wealth creation.

Shaun: I truly believe this is the healthiest wealth-creation event in history.

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