00:00Another redhead actually crossing the Bloomberg terminal right now saying that SpaceX and XAI
00:05together would be valued at $1.25 trillion. Again, this is coming from the company memo
00:11that Bloomberg reporters have seen, although we should point out this information is not yet
00:16public. Let's bring Ed Ludlow into the conversation. And Ed, I do want to start off
00:20with that $1.25 trillion valuation. And I guess my question to you is, how much of that valuation
00:27is SpaceX and how much of that is XAI? The vast majority. And just to clarify something you guys
00:34were discussing a minute ago, there's two separate memos. The valuation comes from a memo that's been
00:40sent out by SpaceX's CFO, Brett Johnson. So, you know, it's based on the terms of the combination,
00:48$1.25 trillion valuation, but a share price at $526. You know, you can do the math on the value
00:56ad. SpaceX's last valuation was $800 billion in the tender we reported, and XAI is just north of
01:03$200 billion. But, you know, Ryan did a good job on summarizing the kind of how we got to
01:09this point. There were a lot of SpaceX investors that were not in favor of this combination because
01:16of the debt component on XAI. So that debt's going to get factored into this, right? And they'll have to
01:22do some interesting financial mechanics, just like they did when X, the social platform, and XAI
01:27combined into a single entity as well. Yeah. And I'm wondering why it's important to these
01:33companies, to Elon Musk, to have this merger happen before SpaceX potentially goes public later this
01:39year. Because you think about SpaceX, obviously it has a viable product. It has a very impressive
01:45valuation. You think about potentially building data centers in space. I could see that, but it just
01:51feels much further off and maybe not as relevant to this specific public offering. Yeah. I mean,
01:59another point of clarification is that our understanding is that this IPO of the combined
02:03entity is going to go ahead. You know, when we reported that there were two scenarios under
02:09consideration, the merger of private SpaceX with public Tesla and the merger of the two private
02:15companies, XAI and SpaceX, a lot of people were asking quite rightly, well, what about this great
02:19big IPO that you guys have been reporting on? And our understanding from sources is that that proceeds.
02:25Just to build a little bit on what Ryan was talking about, it's literally about inference,
02:29running AI models. And, you know, the point of having data centers, which are literally satellite
02:35form factor in space, you know, SpaceX builds them, has the capital to buy the GPUs, which it
02:41intends to raise from the IPO. And XAI makes use of that compute capacity because it is energy
02:47efficient and there is minimal latency in getting the results of running that model back down to
02:52earth. That is the rationale. But you have two very different companies now combining that we're in
02:59different financial health. Right. You know, SpaceX has rude revenues, but also seem to be quite
03:04profitable. XAI burns through cash like it's going out of fashion.
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