quote: $SPCX isn't just building compute faster than every other neocloud It has something none of them have: OPTIONALITY on every GPU it deploys Every GW SpaceX brings online has two paths to revenue: 1. use it for Grok / xAI and capture the frontier model economics themselves, which generates more revenue than renting it out (Semianalysis estimates around $100B/GW) 2. rent it out to everyone else, at a premium The reason SpaceX can rent out their compute at a premium is twofold: 1. Speed. SpaceX builds faster than anyone on earth, so they can get compute into customers' hands faster than any competitor. AI labs that need compute NOW pay up for that 2. The backstop. SpaceX can sign short-term contracts at higher prices because if a customer backs out, that compute simply goes to their own AI models. No empty racks, no panic CoreWeave and Nebius can't take that risk, so they lock in most long-term deals at lower rents and fund the buildout with debt Which brings us to funding, which is where the gap between these companies gets even wider SpaceX doesn't have to fund the buildout (or the interest costs) from compute revenue alone. Starlink and launch cash flows can carry part of it. CoreWeave is paying 15% on unsecured bonds right now while SpaceX has diversified revenue streams across the whole company (and the best capital raiser alive running it) And the part almost nobody is pricing in: as compute moves to space in the next few years, SpaceX owns the cheapest path to win there too. The rockets that bring the compute up AND the connectivity that beams it back down That's why the chart above looks the way it does. Bloomberg Intelligence models SpaceX's AI ROIC going from negative 4% in 2026 to ~25% by 2030, above AWS and Google Cloud, while the pure neoclouds stay stuck in single digits No one is better positioned to dominate the compute business in the coming years than SpaceX This is why I still believe SpaceX is undervalued and why I've made it a core holding in my Milk Road PRO portfolio. You can see my entire real-time portfolio here: https://t.co/NyRpAKYOwu | Is SpaceX competition hurting the valuation / credit risk of Neoclouds? $CRWV and $NBIS down 10%+ today, while $SPCX down just 2% (and UP on the month) The obvious trigger is credit risk, with CoreWeave's unsecured bonds yielding 15% But in the last week, Elon also confirmed that SpaceX will reach 2GW by November and potentially 2.6 GW by EOY. That's .6GW ahead of schedule and quickly becoming much bigger than Coreweave and Nebius Almost no one building compute is doing it ahead of schedule, but SpaceX is proving to be superior here on speed and is expecting close to 10GW by 2027 (And significantly more in years ahead, especially as we move to compute in Space) At the same time, Elon also mentioned earlier this week about the difficulty in executing this build out (said even SpaceX engineers are finding it hard) but also in the ability for companies to raise capital... the issue Coreweave is having now. But we know SpaceX and Elon has no issues in raising capital (and generating revenue from other sources too). Raising capital is what Elon excels at over anyone So I wonder if the market is starting to see that SpaceX is becoming a very big competitor to these neoclouds, taking demand sure... though I think there is plenty of demand to go around.. but more so taking resources and capital that other neoclouds need to scale SpaceX also has optionality to either rent out the compute or use it for xAI / Grok, which lowers risk even further to fund their compute buildout. It's also why SpaceX can charge a premium on their compute vs the other neoclouds, lowering risk even further I'm not saying SpaceX is the full reason for Coreweaves issues, but you gotta think this evolving competitive landscape of Elon entering the ring has to have something to do with it Even with this said, I'm still bullish on neoclouds as I think the demand remains endless, but I think SpaceX becomes the dominate neocloud by next year