Recently, I argued that SpaceX could do for space what Nvidia did for artificial intelligence.
Not just because of its rockets. But because successful infrastructure tends to create entirely new markets around it.
That’s exactly what happened during the AI boom.
At first, investors focused on the AI models themselves. Then they realized AI wasn’t just a software story.
It was also a story about data centers, power plants, networking equipment, cooling systems and the companies building the infrastructure to support them.
I think the same thing is about to happen in space.
And that’s why I’m already looking for the businesses that could emerge simply because SpaceX exists.
A New Economy
Earlier this year, analysts at Oppenheimer raised their forecast for the global space economy in 2035 from roughly $500 billion to $800 billion.
That’s a huge number for an emerging market. And it begs the question:
Where exactly will $800 billion worth of space-related business come from?
Because there probably aren’t enough rocket launches in the world today to support an economy of that size.
One answer is already visible.
Since 2019, SpaceX has launched more than 9,000 satellites into orbit and built the largest satellite constellation in history.
Image: Victoria Girgis/Lowell Observatory
Today, Starlink serves millions of customers across more than 100 countries and territories.
In other words, one of the world’s largest communications networks exists because a company figured out how to launch satellites cheaply and repeatedly.
And if cheaper access to orbit can create a business like Starlink, what else might it create?
One possibility is Earth intelligence.
For decades, satellites have been taking pictures of our planet. Governments use them for military intelligence, and scientists use them to study weather patterns and environmental changes.
And these days, businesses are finding commercial uses for that same information.
Satellite imagery can help farmers monitor crops, insurers assess storm damage, shipping companies track global trade routes and energy companies monitor infrastructure spread across thousands of miles.
The Earth observation satellite market is already worth more than $7 billion annually.
And it’s expected to double in size over the next decade.
But many analysts believe the larger opportunity may be something called Earth intelligence.
That’s the idea of combining satellite imagery with artificial intelligence to transform raw images into useful information.
For example, a photograph showing hundreds of cars in a retailer’s parking lots isn’t particularly valuable. But knowing whether those parking lots are filling up or emptying out across the country might be.
And a satellite image of a shipping port isn’t especially useful on its own. But knowing whether cargo traffic is increasing or slowing down could be.
Gartner estimates Earth intelligence could generate nearly $20 billion in direct revenue for technology product and service providers over the next five years.
In other words, the real value won’t just come from taking pictures of Earth. It’ll come from understanding what those pictures reveal.
But I’m also intrigued by an idea that sounds even stranger.
Manufacturing products in space.
That might sound like science fiction, but companies are already testing it.
In fact, California-based startup Varda has completed multiple missions designed to manufacture materials in orbit and return them safely to Earth.
The company believes certain pharmaceuticals and advanced materials can be produced more effectively in microgravity, where the effects of gravity no longer interfere with the manufacturing process.
This year, Varda announced a research partnership with United Therapeutics (Nasdaq: UTHR) to study whether space-based manufacturing could help produce new treatments for chronic diseases.
It also signed a multi-flight agreement with United Semiconductors to explore manufacturing semiconductor materials in orbit.
This remains a tiny industry today. But that’s true of many emerging technologies before they become important.
After all, the internet used to be a tiny industry too.
Another idea attracting my attention is orbital computing.
Artificial intelligence has created enormous demand for data centers. Companies are spending hundreds of billions of dollars building facilities packed with chips, cooling systems and power equipment.
And some entrepreneurs believe the next generation of computing infrastructure could eventually move beyond Earth altogether.
Earlier this year, startup Starcloud raised $170 million to pursue space-based data centers. The company has already launched a satellite carrying an Nvidia H100 AI chip, one of the same processors widely used to train and run AI systems on Earth.
But it’s not alone.
Ahead of the SpaceX IPO, Elon Musk discussed plans for so-called AI satellites, computing systems that would operate directly in orbit using technology derived from the Starlink network.
Whether orbital computing ultimately becomes practical remains an open question.
But the fact that both startups and SpaceX are pursuing the idea suggests some investors are already looking beyond launch services and communications.
They’re also beginning to ask what happens when space becomes a place to build infrastructure…
And a place where businesses can operate.
Here’s My Take
I’m firmly focused on what happens after SpaceX.
Because even if SpaceX becomes the backbone of the space economy, the most valuable opportunities often emerge one layer beyond the infrastructure itself.
Railroads created entirely new industries.
The internet created entirely new industries.
Artificial intelligence is creating entirely new industries.
And I believe SpaceX will do the same for space.
Which means the most exciting opportunities may still lie ahead.
Regards,
Ian KingChief Strategist, Banyan Hill Publishing
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