Gorilla PE | November 2024

In November 2024, we concluded that SpaceX is constructing a structurally unavoidable "Gate." At the time, the broader market viewed Starlink simply as a satellite internet service, and its launch business as a mere accessory. Our perspective was fundamentally different. To truly understand what SpaceX is building right now, you need a much longer time horizon.

There is a prevailing narrative that its $210B valuation is expensive. Our judgment is the exact opposite. Once the full contours of what is being built come into focus, that price tag might actually look like a bargain.

Part 1. The Launch Cost Revolution — How the Gate is Forged

The 2000s Bottleneck: $10,000/kg to Orbit

Space was solely the domain of nation-states for decades. The reason was simple: the sheer cost of putting mass into orbit. In the early 2000s, lifting a 1kg payload into Low Earth Orbit (LEO) cost anywhere from $10,000 to $20,000. Launching a single satellite required hundreds of millions of dollars. This massive cost barrier was the structural moat that kept space closed to the private sector.

SpaceX flipped this equation. Reusable rocket technology was the key. By recovering and flying the Falcon 9’s first-stage booster over and over, they amortized the cost of the rocket's fuselage—the single most expensive component of a launch—across multiple flights. Today, the launch cost of a Falcon 9 is under $1,000 per kg, roughly 70–80% cheaper than its competitors.

The results are written in the numbers. As of 2024, SpaceX commands about 90% of the commercial launch market, and around 82% of the total market (including government launches). The rest is divvied up among legacy players like ULA, Arianespace, and Russia’s Roscosmos. This is no longer just "market share." It means that the viable pathway to orbit has effectively converged into a single chokepoint.

This is the anatomy of how a Gate is formed: A cost revolution creates new demand; demand causes launch volumes to explode; and as volumes compound, SpaceX’s reusability cycle accelerates. Some Falcon 9 boosters have already flown more than 20 times. This is a flywheel that is structurally impossible for a competitor starting from scratch to catch up to.

Starship — The Next Asymmetric Advantage

The cost revolution ignited by Falcon 9 is about to be driven an order of magnitude lower by Starship. Designed as a fully reusable super-heavy launch vehicle, its theoretical target cost is under $100 per kg—a further 10x reduction from Falcon 9.

Throughout 2024, SpaceX conducted successive integrated flight tests for Starship, validating core technologies. The pivotal moment came in October 2024 with the "Mechazilla catch," where the Super Heavy booster returned to the launch mount and was caught by mechanical arms. This demonstrated the very real feasibility of a rapid, fully reusable cycle. Once perfected, the launch cost structure will experience another non-linear drop.

What happens when launch costs hit $100/kg? Things that are economically absurd today become viable businesses tomorrow. Massive orbital data centers, space-based solar power generation, and interplanetary cargo logistics. As of 2024, these are stories of the future. But the vector is clear. When that future arrives, the company that owns the launch Gate will be SpaceX.

Part 2. Starlink — The Cash Cow Built Atop the Gate

Not Just "Satellite Internet"

Viewing Starlink merely as a satellite internet provider is missing half the picture. Starlink’s true significance is twofold: First, it is a proprietary, vertically integrated business enabled exclusively by SpaceX’s own launch capabilities. Second, it is the Cash Cow generated by that launch flywheel, serving to bankroll the capital-intensive R&D for Starship and Starshield.

By 2024, Starlink surpassed 4 million subscribers globally, operating in over 100 countries. Annual recurring revenue (ARR) is pacing at ~$6B, with estimated EBITDA margins exceeding 60%. These cash flows are the lifeblood funding Starship and Starshield.

More importantly, the total addressable market is expanding structurally. In 2024, through a partnership with T-Mobile, SpaceX pushed forward with Direct-to-Cell capabilities—allowing standard smartphones to connect directly to satellites. This unlocks entirely new markets by resolving connectivity bottlenecks in maritime, aviation, and ultra-remote areas—bottlenecks that physical fiber-optic cables can never solve.

The Contours of the Orbital Economy — Distant, but Directionally True

There are resources in orbit that simply do not exist on the ground. Uninterrupted solar energy running 24/7—with about 36% higher insolation than on Earth, unhindered by clouds or nightfall. And then there is the vacuum of space, offering a radically different thermal environment compared to the billions of dollars terrestrial data centers spend on cooling infrastructure.

These physical realities are paving the way for profound possibilities: space-based solar power beamed to Earth, orbital computing clusters, and in-space manufacturing. Nobody knows exactly when or in what sequence these will materialize. Each faces steep engineering bottlenecks—thermal management in a vacuum, high-bandwidth inter-satellite optical links, and of course, launch costs. It is too early to use these as an immediate investment thesis.

However, all these possibilities share one absolute prerequisite: you have to put mass into orbit. Right now, SpaceX holds the keys to that gate. The logic of the direction holds today, even if the timing remains uncertain.

Part 3. Starshield — The Dawn of the Second Gate

Military Connectivity: Proven in Ukraine

In February 2022, immediately following Russia's invasion of Ukraine, SpaceX rushed tens of thousands of Starlink terminals to the frontlines. With traditional communications infrastructure obliterated by Russian forces, Starlink became the de facto command-and-control network for the Ukrainian military. Drone operations, artillery coordination, frontline comms—the backbone of modern warfare was running on LEO satellites.

Russian forces attempted to block Starlink via intense jamming. They failed. The combination of narrow beamwidths and inter-satellite laser links inherently boosts jamming resistance. Military communications experts assessed this architecture as possessing "a level of survivability fundamentally different from legacy SATCOM."

This real-world crucible moved the Pentagon.

Starshield — Forging the Next Tollgate

In December 2022, SpaceX officially announced Starshield. Built on Starlink’s technological backbone, it is a dedicated satellite network for the US Department of Defense and intelligence agencies. It focuses on three core pillars: earth observation, secure communications, and hosting classified government payloads.

The reality of this network is already materializing. Disclosures in 2023 revealed that SpaceX signed a classified $1.8B contract with the National Reconnaissance Office (NRO) in 2021 to build a massive constellation of spy satellites. Then, on September 1, 2023, the Space Force awarded Starshield its first official contract (up to $70M) to provide satellite communications to 54 military mission partners, including the Army, Navy, Air Force, and Coast Guard.

This is the genesis of the next Gate. Once a satellite comms system is integrated into military operations, the switching costs become astronomically high. Encryption architectures, operational protocols, and terminal infrastructure are deeply intertwined. The moment Starshield becomes the US military standard, it transforms into a multi-decade moat.

Part 4. Why Now? — Justifying the $210B Valuation

The Anatomy of Monetization Layers

SpaceX’s business is not monolithic; it is a stack of at least three distinct monetization layers.

Layer 1 — Launch Services: Falcon 9, Falcon Heavy, and Starship. Fulfilling government contracts (NASA, DoD) and commercial payloads. This is already highly profitable.

Layer 2 — Starlink: $6B+ ARR, 60%+ EBITDA. This cash flow underwrites the rest of the empire. As the subscriber base grows, operating leverage scales beautifully.

Layer 3 — Starshield: Currently in the early contract phase. But as the $1.8B NRO contract suggests, its ultimate revenue potential could dwarf even Starlink once fully realized.

If we project 2027 revenues to hit $43B with an EBITDA of $25B, a $210B valuation implies a forward EV/EBITDA multiple of roughly 8x to 9x. For a company with this velocity of growth and the sheer impenetrability of its moat, is that expensive? Even pricing in SpaceX's unique risk profile—launch failures, regulatory friction, Starship delays—that valuation is highly defensible.

The Implications of Having No Peers

Blue Origin, Rocket Lab, ULA. Can these companies actually compete with SpaceX? To be blunt: not right now.

Blue Origin’s New Glenn is only just preparing for its maiden flight in 2024. Rocket Lab is dominant in small-lift but faces structural limitations for deploying massive mega-constellations. ULA possesses deep technical heritage, but its cost structure isn't even in the same universe as SpaceX’s.

Chinese commercial launch startups like LandSpace and Galactic Energy are advancing rapidly and pose a legitimate long-term threat. However, it is structurally impossible for Chinese firms to access US government contracts or integrate with NRO/Space Force networks. In the military Gate, competition is geopolitically barred from day one.

Conclusion: The Gate is Already Built

As AI proliferates, it demands compute; as compute scales, it demands physical infrastructure; and as that terrestrial infrastructure hits its physical limits, a new layer must emerge. That new layer is orbit.

The constraints of the terrestrial power grid, the physical limits of land-based AI data collection, and the vulnerabilities of ground-based military comms—these three vectors all converge in Low Earth Orbit. And right now, there is functionally only one viable gatekeeper granting access to it.

What Starlink proved on the battlefields of Ukraine in 2022, what the NRO and Space Force codified in contracts in 2023, and the unit economics Starship is unlocking today—they all point to a singular, undeniable logic.

The one who builds the gate collects the toll. And that gate is being built right now.

[Subsequent Developments] 

In February 2026, the merger of SpaceX and xAI was announced, leading to the formation of X-Holdings. The SpaceX consortium emerged as the primary candidate for the Golden Dome missile defense system architecture. And in December 2025, an H100 GPU cluster successfully trained an AI model in orbit for the first time. What we called the "distant future" in November 2024 became reality within a single year.

This article documents the perspective of Gorilla PE based on public information as of November 2024. It does not constitute investment advice.