Gavin Baker

Really fun to interview my old friend Bret Johnsen in Mission Control. Three parts of the @SpaceX story that I wish were more widely discussed: SpaceX has created thousands of good blue-collar jobs: welders, machinists, electricians. Everyone talks about the need to bring high-paying, blue-collar jobs back to America. SpaceX and Tesla are making that happen. To the best of my knowledge, they have created more manufacturing jobs in the US than just about any other American company over the last ten years. It’s hard to imagine our nascent industrial renaissance succeeding without these companies. SpaceX was started with the goal of putting humans on Mars. And along the way, they have massively improved life for many humans on Earth. Mars may be a starter planet, but Earth is our planet, and the technologies developed at SpaceX are already in use today connecting and safeguarding the people of Earth. Starlink is a really efficient way to bring internet to low-income countries. In Kenya’s remote Murang’a County, Starlink has made it possible for patients in rural villages to consult with medical specialists via telemedicine. In the rainforests of Brazil, Starlink has connected schools to reliable high-speed internet that will provide more educational opportunities to students. Here in America, Starlink has proven vital to emergency teams responding to natural disasters. During Hurricane Helene, the Starlink hubs dropped into North Carolina and East Tennessee were often the only contact point between cut-off towns and the outside world. Literally life-saving. This IPO will be a big milestone for the company. It’s important to celebrate this, while also remembering that making humanity multi-planetary is the ultimate goal. Going to Mars is really hard. There have been many setbacks thus far, ranging from fiery explosions to failed landings. There will be many more. Ad Astra Per Aspera. But SpaceX is at its best *after* a setback imo. Their first 3 launches were “failures”. Had the 4th not succeeded, there might not be a SpaceX today. The company’s success in the face of such daunting odds is a testament to the resilience of the culture and absolute commitment to the mission shared by every employee I’ve ever spoken with. Some of the world’s most talented engineers have chosen to live in Airstreams at Starbase away from their families for weeks on end in service of this goal. I will never forget the welders who told me they signed every weld because they wanted to be accountable if they were responsible for a failure. True missionaries, all of them. I am grateful to every single person at SpaceX for helping to make the future as inspirational as possible. And I will be even more grateful if I get to see a blue sunset on Mars! More info on spacexipo.com

I hope that Atreides and Valor are able to secure the franchise rights to @McDonalds on both the Moon and Mars. And Valor has actual expertise running franchised restaurants! Who can help make this happen? I will put a deposit down today unless SpaceX wants the rights.

@AntonioGracias @reindsummit @McDonalds More photos like this please. Also kinda funny that you went from correcting Bloomberg’s reporting about Valor’s SpaceX ownership in your last post to fried apple pie in the next. The American Dream in action! And who doesn’t love both McDonalds and SpaceX? As 🇺🇸 as it gets!

@GavinSBaker @reindsummit Beat you too it Gavin! I took this pic on my way out of Detroit to send to my kids. Thank you @reindsummit and @McDonalds for making my visit to my birthplace very special.

Just as I land in Detroit, my birthplace, for the Reindustrialize Summit, McD’s brings back one of my favorite childhood desserts. Can’t be a coincidence! Great memories of happy meals and apple pie with my Mom as a kid. I love America! 🇺🇸 @reindsummit

Original post:

"If token throughput per watt rises faster than price per token falls, revenue per gigawatt can net expand. This is compounded by models getting smarter, which unlocks higher value tasks for end users [justifying increased costs]" Well said @ShanuMathew93 and @downingARK

Kinda wild how wrong most energy experts were about the Straits of Hormuz. What were the root causes of the error? China had more reserves than anticipated, US flexed up exports faster and more ships were actually transiting the straits via the Omani route? Genuinely curious.

@TeslaBoomerMama Your amicus brief in the Tornetta case was excellent

@GavinSBaker Fan-girling hard now 😌

Thank you @GavinSBaker, this made my day 🥰

@ignace @tbpn Well glad you at least watched it. Good luck! Time will tell as ever.

@GavinSBaker @tbpn Cooling transponders is different to cooling data processing. I'm not supposing ongoing projects are not thinking about cooling, but to say "you don't need that in space" is exactly the kind of oversimplification that lends itself to irresponsible meme stock investment.

Atreides' @gavinsbaker says that once Starship is reusable, the economics of orbital compute crush the economics of terrestrial compute. He lays out the math: "Once $SPCX can reuse Starship, the math for orbital compute becomes pretty compelling." "It's $60B to bring on a GW terrestrially. $25B is power and cooling — you don't need that in space. And so the right comp for that $35B in IT equipment — GPU, CPU, switches, memory, storage — is that $25B [in power and cooling] vs. the cost of launch." "And once Starship is reusable, I think the cost to launch is $5B. So that means you can put a GW into space for [$40B]. The GW on earth is $60B."

@JediCapper @tbpn I think what I said was that it was a very hard engineering problem that had not yet been solved.

@tbpn @GavinSBaker can you we stop pretending like starship being reusable is the base case. it has proven to be much harder than they anticipated, and to date has been a failure whether the faboys admit it or not

@firesidealpha @tbpn Glad you found it helpful!

Always a must-listen. Gavin Baker (@GavinSBaker of Atreides) broke down the SpaceX IPO, orbital compute, retail, China, and where AI value accrues, on @tbpn (~0:35 to 1:10 min mark). Here were the biggest takeaways: 1. The orbital-compute math is starting to pencil out. Gavin's version: a gigawatt costs about 60 billion to build on Earth, and 25 billion of that is the power and cooling you do not need in space. Once Starship is reusable he puts a launch at about 5 billion, so a gigawatt in orbit lands near 30 billion against 60 on the ground. The half he expects to keep inflating is the power and cooling, which only widens the gap over time. 2. The near-term SpaceX story is terrestrial compute, not Mars. Gavin is genuinely excited for asteroid mining and a city on the moon, but says the tangible drivers over the next year are how fast SpaceX can bring gigawatts online and how richly it monetizes them. He points to roughly 50 billion a gigawatt on the Google deal and, per the Altimeter work, 2 to 3 times neocloud pricing, and notes that in Jensen's words SpaceX energizes data centers faster than anyone. 3. SpaceX looks confident it can bring compute online fast. Gavin cites the Altimeter figure that SpaceX has ordered 20% of Nvidia's Rubin chips, with Groq's LPUs integrating over the next six to nine months. He reads the Anthropic deal as having an out and possibly running short-term, reflecting the training-versus-inference tension, and argues that being a token factory is more than enough for the next five to ten years, so SpaceX has no need to rebuild a full AWS unless it chooses to. 4. Cursor is the other variable he is watching. He flags Cursor's Composer 2.5 becoming roughly Pareto-dominant after a few weeks of reinforcement learning and fine-tuning, asks what happens when that approach meets a bigger base model, and finds it telling that Cursor is now in half the Fortune 500. 5. Retail keeps beating the pros who dismiss it. When people use "retail" as a pejorative, Gavin flips it back on them with "stupid is as stupid does," meaning you judge by results, not labels. The retail-favorite indices are up a lot in both 2024 and 2025, and by his read retail is outperforming the overwhelming majority of professional managers across private equity, venture, and public equity. He calls it the most powerful force in the market in his career, while drawing a hard line that this is nothing like the year 2000 bubble. 6. The lockup-overhang fear is overstated. Over 10,000 SpaceX employees bought on the IPO, and Gavin notes that anyone on the cap table has had a chance to sell every six months for the last decade. The people who wanted liquidity already took it, in his read, which is why he thinks the supply and demand picture from here is more interesting than the standard lockup analysis suggests. 7. Public markets are more patient than venture believes. Looking at how the market treated Tesla and Amazon through their heavy build-out years, Gavin argues the public market has a much greater tolerance for investment and a much longer time horizon than a lot of people in the venture ecosystem give it credit for. 8. His "token path" framework, and where CDNs sit in it. Value accrues to whatever sits in the flow of AI tokens. Cloudflare and Akamai are partly there, and he cites Akamai's roughly 1.8 billion dollar Anthropic deal plus a premium for low-latency delivery, since the lesson from Cerebras is that people pay for speed. But he notes CDNs touch less than 1% of all tokens consumed, maybe under 10 basis points, because most inference happens internally. Asked what is fully in the path, he joked: beachfront property, airplanes, and really nice cars. 9. The bottleneck trade is ending. For the last year, in Gavin's telling, the game was "having Claude run what's the next bottleneck." He thinks that trade is nearly done, pointing to Ajinomoto, the Japanese chip-input supplier the bottleneck crowd had bid up, which then chose not to raise prices. The next game, in his framing, is what holds enduring franchise value on the other side of the bottlenecks. 10. The market doubts Meta can monetize its own assets. Gavin increasingly values these companies on enterprise value to net property, plant, and equipment, a "high asset value, low obsolescence" lens. Meta's multiple there says the market has immense skepticism about its ability to monetize its asset base, and he thinks that skepticism is warranted given that the main thing management has offered so far is the idea of personal superintelligence. 11. The industry is behaving like the end game has arrived. Gavin reads the way players are moving as a sign the end game may be here sooner than expected. His take on OpenAI cutting Codex pricing is that coding tokens are so valuable for getting into the recursive self-improvement loop that everyone is racing for them, and he says Zuckerberg feels that acutely. 12. China's distillation edge is real but fragile. Chinese labs are world-class at industrial-scale distillation, and Gavin relays that it took only about 160,000 reasoning traces from o1 and o3 to reconstruct the original DeepSeek, run through endpoints across every available API. His warning is that all of it goes away the moment American labs stop releasing models at the frontier. 13. Sovereign AI will not reach the frontier. Every country will want a sovereign strategy for national defense, but Gavin's read is that for everyone outside the United States and China it means reinforcement learning on your language, culture, and values, run on the best open-source model inside your own data centers. Frontier-grade sovereign AI is the one outcome he does not see happening. 14. SpaceX may be the most important company of his lifetime. Gavin frames it as a once-in-a-career investment, possibly the most important company ever, and recommends seeing a launch in person, where "a lot of people cry." He notes he owned 15% of Nvidia and 10% of Tesla when each was sub-2-billion in market cap, and puts SpaceX in that same rare category.

@ignace @tbpn Have you watched the video that Elon did about this? Genuinely curious.

@BoxLongs @tbpn Good idea!

@GavinSBaker @tbpn The infamous sansevieria snake plant. Needs no TLC to survive. Extremely rugged. Can probably survive on Mars😆

Yes, no one from SpaceX has thought about the cooling or the radiation shielding for the circa 10,000 satellites they are currently operating. Insurmountable problems. And in all seriousness yes, RMA might be an issue but 40b vs. 60b of capex, minimal ongoing opex and superior latency help offset. And obviously all contingent on Starship.

@tbpn @GavinSBaker You actually need more tech for cooling in space. Also, radiation shielding. Also, no easy fixing damaged circuits, no easy upgrades. It's not so simple.

@InvestLikeBest Great job by Patrick interviewing

@GavinSBaker Thank you Gavin! Full episode here too (with link to Youtube in the comments): x.com/patrick_oshag/…

Thoroughly enjoyed my good friend Alex Sacerdote’s appearance on ILTB. 
I keep thinking about his point that we have an acute compute shortage with 0.1% of the world’s population using agentic AI.   I have learned a lot from Alex over the last 27 years! podcasts.apple.com/us/podcast/ale…

@WhaleRockCap Used Grok to blur the text which was successful

The Atreides team gave this trophy to Alex and his team for the recent 20 year anniversary of @WhaleRockCap

And actually turns out it is 2:30. I’m not good at calendar stuff.

Just learned I am going ton @tbpn at 2 PM EST today if anyone is interested. My first time. Evidently has been on my calendar for a while but was news to me. Should be fun - the guys seem great.