Sequoia Capital partner Shaun Maguire believes SpaceX's upcoming IPO will be the "healthiest wealth creation event in history," with the valuation of what he calls the "greatest company ever" soaring from $36 billion in 2019 to $800 billion.
The top investor, who has stakes in five of Musk's companies, recently stated that the market still severely underestimates Musk's value, while SpaceX's excess rocket launch capacity will spawn space data centers, a potential "one of the largest market opportunities ever."
Highlights from the interview video summary:
Victory of contrarian investment logic: In 2019, the market viewed SpaceX merely as a rocket launch company with limited growth. Maguire, leveraging his physics background, anticipated Starlink's technical feasibility, making a heavy bet when the market assigned it a "zero valuation," realizing cognitive gains from $36 billion to $800 billion. "Potential energy conversion" business philosophy: Unlike typical CEOs eager for monetization, Musk habitually accumulates infrastructure capabilities (like Gigafactory and Starship) over long periods with zero revenue. Once a technological tipping point is crossed, this converts into staggering kinetic energy released through million-unit annual production or industry model transformation. Laser links reshape global communications: Utilizing a vacuum laser communication network of over 9,000 satellites, Starlink achieves faster intercontinental data transfer speeds than undersea cables, evolving from a mere access tool into core digital infrastructure carrying global long-distance traffic. D2D rewrites telecom industry landscape: Through spectrum acquisition and V3 satellite optimization, SpaceX's Direct-to-Cell (D2D) satellite-to-phone technology is on the verge of explosion, expected to achieve mass adoption by 2028, potentially becoming the company's largest revenue source within five years, even surpassing consumer fixed networks. Starship spawns space data centers: With Starship entering reliable mass production around 2026, SpaceX will face excess rocket capacity. This prompts the company to leverage low launch costs to solve power and land constraints facing ground-based AI data centers, opening a trillion-dollar space computing market. "Atomic" advantage in AI race: Maguire emphasizes the ultimate constraint in AI competition will be physical resources like power and hardware (atoms). Musk, through cross-company synergy between xAI, Tesla Energy, and SpaceX's space infrastructure, commands foundational support unattainable by pure-software AI giants. Healthiest wealth creation event ever: The impending SpaceX IPO is seen as the "largest wealth creation movement in history." As employees are largely mission-driven and long-tempered by challenges, this massive wealth distribution will be more constructive. Furthermore, grand goals like Mars missions ensure core team retention.
In a podcast interview with "Sourcery with Molly O'Shea," Maguire revealed that Sequoia Capital has invested approximately $1.2 billion cumulatively in SpaceX since 2019, a position now worth about $12 billion, achieving a tenfold return. He stated the investment decision was considered "crazy" within the industry at the time because, based on the global launch market size then, SpaceX's valuation had almost no upside, while the market assigned zero value to businesses like the Starlink satellite network and Starship super-heavy rocket. Maguire pointed out that SpaceX's valuation surge primarily stems from four waves of Starlink's evolution: the consumer network has reached 9.2 million subscribers; the enterprise market covers multiple airlines; the government/defense business launched the Starshield product line; and the Direct-to-Cell service had 6 million users by end-2024. He predicts 2028 will be the pivotal year for Direct-to-Cell, when its scale might surpass the consumer network. Even more disruptive is the space data center plan. Maguire stated that once Starship operates reliably by 2026, SpaceX will face capacity surplus, while Earth's AI data centers grapple with power, land, and environmental regulation constraints. Having completed economic modeling, he believes this represents "one of the largest market opportunities ever," with the public seeing full justification in SpaceX's IPO filings. The 2019 Contrarian Bet Maguire's investment decision seemed highly anomalous at the time. In 2019, SpaceX conducted only 13 launches annually, with the global launch market valued at approximately $50-60 billion. Even with 100% market share, assuming 40% EBITDA margins, net profit after capital expenditures would be only about $1 billion. The $36 billion valuation equated to 36 times the theoretical maximum earnings. More critically, the market was entirely pessimistic about SpaceX's core growth engines. All previous satellite network companies—Iridium, Globalstar, Teledesic—had failed, with Starlink seen as another doomed money-loser. Starship was still in early development, its commercialization distant. Maguire's physics background enabled him to pre-validate Starlink's technical feasibility. He knew which questions to ask, concluding, "This time is different." Sequoia subsequently invested $1.2 billion, becoming a significant SpaceX shareholder. Starlink's Four Waves Drive Valuation Surge SpaceX currently operates about 9,000 satellites in orbit, communicating via inter-satellite lasers, transmitting terabits of data per second. Maguire compares this to Global Crossing's transatlantic fiber-optic cable laying in 1999, suggesting SpaceX built equivalent infrastructure in space, with lasers transmitting faster in vacuum than fiber. The first wave, consumer internet, reached 9.2 million subscribers by end-2024. Maguire revealed Starlink achieved $1 billion annualized revenue within 12 months of its first revenue. Users simply install a 10-12 inch dish antenna to connect. The second wave, enterprise market,突破口 was aviation. Qatar Airways, United Airlines, and JSX signed deals for in-flight Starlink. Maguire noted a marketing effect: rural passengers discovering Starlink on planes is faster than their home internet, prompting home subscriptions. The third wave, government/defense, launched the Starshield product line for military drones, battlefield communications, and secure government networks. The fourth wave, Direct-to-Cell, could be most disruptive. Phones connect directly to satellites without extra hardware; SpaceX satellites mimic cell towers, switching automatically when ground signals are weak. By end-2024, this service had 6 million subscribers, growing rapidly. SpaceX's 2025 acquisition of EchoStar's 2GHz spectrum for $1.7 billion signaled aggressive entry into satellite phones. Maguire predicts 2028 as Direct-to-Cell's key year, with sufficient V3 satellites orbiting, optimized spectrum, and phone antennas enabling mass satellite phone service. He believes Direct-to-Cell could surpass consumer internet in scale within five years. Space Data Centers: Surplus Capacity Spawns New Opportunity Maguire sees space data centers as SpaceX's next major opportunity. The logic chain is clear: Starship expected reliable by 2026; once all Starlink and Direct-to-Cell satellites deploy, SpaceX faces capacity surplus. Meanwhile, Earth's AI industry hits severe bottlenecks—power shortages, land scarcity, strict environmental regulations, NIMBYism hindering data center construction. This creates a supply-demand mismatch: surplus launch capacity versus explosive demand constrained by ground supply. Maguire disclosed initially having "macro logic right, but micro math not figured out" six months ago, but now completing economic modeling concludes "this will be absolutely massive." Musk has publicly discussed space data centers, but full economic models remain undisclosed. Maguire stated SpaceX's IPO filings will reveal the opportunity's scale, potentially "one of the largest market opportunities ever." This also explains why Maguire believes Musk remains underestimated. Despite Musk's net worth exceeding $400 billion, making him the world's richest, Maguire argues the market should focus on the "derivative of progress"—the rate of change, not the current position. He notes xAI is building the world's largest coherent training cluster, and Musk is the "world's best at atoms," referring to hardware, infrastructure, and manufacturing prowess—AI's scarcest resources. Maguire's logic: AI bottlenecks will soon shift from model capability to inference compute, whose bottleneck is power. xAI combined with Tesla's energy business and SpaceX's space data center capability creates an unreplicable combination for other AI firms. "The Healthiest Wealth Creation Event in History" Maguire believes the SpaceX IPO will differ drastically from past tech IPOs, calling it the "healthiest wealth creation event in history" due to SpaceX employee traits. Employees with 15+ years tenure joined not for wealth but genuinely wanting to build rockets and send humans to Mars. They endured battles with physics, environmental groups, skeptics, and numerous near-failures. This tempering forged a frugal, pragmatic, mission-driven culture. Maguire predicts these individuals won't splurge like typical tech nouveaux riches but will invest in public art, scientific research sponsorship, etc. He mentioned knowing early employees planning post-IPO careers as artists: "These people didn't come for money and took a long time to get here." Crucially, SpaceX's mission remains unfulfilled. Key milestones over five years include: Starship routine operations, Direct-to-Cell mass deployment, space data centers activation, lunar base construction, Mars mission preparation. Maguire quotes SpaceX employee mentality: "Why retire just as we're about to send humans to Mars?" Maguire also invested in four other Musk companies: xAI, Neuralink, The Boring Company, and X. His optimism stems from a common logical framework: Musk builds companies by "accumulating potential energy, then converting it to kinetic energy." These companies appear slow-moving with limited revenue now, but once crossing a tipping point, growth speed will surprise markets. From $36 billion to $800 billion, Maguire's tenfold return builds on deep understanding of this unique business model. His latest judgment: this is just the beginning.
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