Wall Street Expects SpaceX to Burn $350 Billion of Cash Through 2030
The Takeaway
- SpaceX IPO roadshow kicks off on Thursday
- Goldman Sachs’ forecasts underscore heavy costs of AI buildout
- SpaceX is expected to list shares publicly next week
SpaceX, planning the largest initial public offering of all time next week, will already need to raise more cash by next year if private forecasts from analysts at Goldman Sachs come to fruition.
SpaceX’s lead bank on the IPO, in aggressive forecasts shared with prospective investors this week, expects the company to burn $120 billion this year and next year combined, and another $230 billion through 2030, as it significantly ramps up on capital expenditures, largely for its nascent artificial intelligence business. The forecasts anticipate SpaceX making about $360 billion of capital expenditures through 2028, with about 80% of that spending for AI
The cash burn would nearly double the $180 billion that OpenAI expects to burn through 2030, according to forecasts the AI company shared with investors earlier this year.
The forecasts underscore that the AI race is expected to require even more buy-in from Wall Street. OpenAI and Anthropic are preparing for IPOs as soon as this year. Alphabet just announced it was raising more than $80 billion in its first equity raise since 2005, in part to fund capital expenditures for AI infrastructure.
SpaceX CEO Elon Musk has suggested to prospective investors that the company may not need to raise additional equity capital after the IPO. Executives have told those investors it would likely raise debt.
The cash burn would represent a significant expansion of the non-cancelable contracts for AI infrastructure and spectrum that SpaceX outlines in its IPO prospectus. The company said it had about $24 billion in commitments for the next few years, including its deal to buy spectrum for Echostar. SpaceX is paying a large portion of that $19.6 billion deal in stock.
The reward for SpaceX’s cash burn would be incredible revenue growth, according to the forecasts. SpaceX would reach $474 billion in revenue by 2030, with AI revenues making up two-thirds of the sales. That revenue total would be more than sales from each Alphabet and Apple last year. It would also represent a 25-fold increase from its $18.7 billion in revenue last year.
The bank expects SpaceX’s revenue to more than double this year to $38 billion, likely reflecting the deal it struck with Anthropic to rent out its data centers for $1.25 billion per month.
The roadshow for SpaceX’s IPO, in which the company is seeking to raise about $75 billion at a $1.75 trillion valuation, started on Thursday to cement investor interest in the deal. SpaceX is set to list shares publicly on Nasdaq next week. The forecasts, which are a less widely publicized part of the IPO roadshow process, are usually informed heavily by the company listing its shares. The Financial Times earlier reported parts of the forecasts.
Goldman Sachs declined to comment.
SpaceX said in its IPO prospectus that its AI business in particular “will require significant capital expenditures to fund compute, infrastructure and power generation, model training, and product development,” without specifying the amount. It warned prospective investors that they could “suffer significant dilution” of their stakes if the company raises additional equity.
In the first quarter of this year, the company generated $4.7 billion in revenue, largely from its Starlink satellite internet business, and it burned about $9 billion. The company had more than $23 billion in cash and $30 billion in debt and finance leases at the end of March.