How Elon Builds Trillion-Dollar Companies

Elon Musk has built more category-defining companies than any founder alive — and Sequoia Capital and Partner Shaun Maguire have backed five of them: SpaceX, xAI, Neuralink, The Boring Company, and X. In this episode of Sourcery, Shaun breaks down how Elon builds trillion-dollar companies, why SpaceX may be the greatest company, largest IPO and wealth creation event of all time, and why he believes Elon is still massively underrated despite his global impact. We dive into SpaceX’s IPO, Starlink’s explosive growth, data centers in space, direct-to-cell from orbit, xAI, and the unique way Elon builds long-term potential energy before unleashing scale. Shaun also explains why SpaceX could become the biggest wealth creation event in history, how liquidity will reshape the tech ecosystem, and why Elon’s approach to power, infrastructure, and speed gives him an unmatched edge. This is a deep look inside Elon’s operating system — from one of the most technically fluent investors in Silicon Valley. Shaun Maguire: https://x.com/shaunmmaguire Molly O’Shea: https://x.com/MollySOShea Sourcery: ⁠https://x.com/sourceryy 𝐄𝐏𝐈𝐒𝐎𝐃𝐄 𝐋𝐈𝐍𝐊𝐒 YT: https://youtu.be/lPXYqPXo_R0 𝐒𝐏𝐎𝐍𝐒𝐎𝐑𝐒 • Brex https://brex.com/sourcery—The modern finance platform, combining the world’s smartest corporate card with integrated expense management, banking, bill pay, & travel. https://brex.com/sourcery • Turing https://turing.com/sourcery—Turing delivers top-tier talent, data, and tools to help AI labs improve model performance—and enables enterprises to turn those models into powerful, production-ready systems. https://turing.com/sourcery • Deel https://www.deel.com/sourcery—Deel is the global people platform that helps startups hire, manage, pay, and equip anyone, anywhere. Trusted by more than 35,000 fast-growing companies, Deel is the people platform that just works, so teams can scale without the chaos. Visit: https://www.deel.com/sourcery • Public http://public.com/sourcery–Investing platform Public just launched Generated Assets https://public.com/generated-asset, which lets you turn any idea into an investable index with AI. With Generated Assets, you can build, backtest, refine, and invest in any thesis with AI. Gone are the days of one-size-fits-all ETFs. https://public.com/sourcery https://public.com/sourcery Follow Sourcery for the latest updates! https://www.sourcery.vc/ Disclosure Paid Endorsement. Brokerage services by Open to the Public Investing Inc, member FINRA & SIPC. Advisory services by Public Advisors LLC, SEC-registered adviser. Crypto trading provided by Zero Hash LLC, licensed by the NYSDFS. Generated Assets is an interactive analysis tool by Public Advisors. Output is for informational purposes only and is not an investment recommendation or advice. See disclosures at public.com/disclosures/ga http://public.com/disclosures/ga. Matched funds must remain in your account for at least 5 years. Match rate and other terms are subject to change at any time. 𝐓𝐈𝐌𝐄𝐒𝐓𝐀𝐌𝐏𝐒 (00:00) Shaun Maguire, Partner at Sequoia Capital (01:10) SpaceX Upcoming IPO & data centers in space (05:00) The math behind space-based data centers (07:05) Breaking down Starlink from first principles (12:10) Economics of Starlink vs legacy telecom (14:41) Starlink + self-driving cars and the future of mobility (16:29) Starship, direct-to-cell, and the next decade roadmap (19:38) SpaceX investment size and returns so far (20:25) Why is Elon still underrated? (21:33) How SpaceX went from contrarian to consensus (25:39) Why does Elon keep a tight investor circle? (27:06) Why does the market still underestimate xAI? (29:47) AI capex, liquidity cycles, and why spending is rational (32:11) Staying private vs going public: what makes more sense (35:47) Mission-driven cultures vs post-liquidity slowdown (37:53) Preparing founders psychologically for liquidity events (40:33) Why this may be the healthiest wealth creation cycle

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Look, I personally believe SpaceX is the greatest company of all time. Probably the most vertically integrated American manufacturing company. When you're vertically integrated, it just lets you move with like a speed and flexibility that no one else has. You know, and that's where things like space data centers can just happen very quickly, shockingly quickly. SpaceX in 2019 was just a launch company. In 2019, they did 13 launches. The total global launch market, I would say in 2019 is probably like a $5, $6 billion market. Probably have like a billion of profit if you captured 100% of the market then. The company's valued at $36 billion in 2019. Investing at 36 times the theoretical maximum earnings, we wouldn't be growing very much if you didn't find another market. I first invested in 2019. In cumulative, invested $1.2 billion.

• 0:45Speaker 00

  That position's worth like $12 billion today in the $800 billion valuation. Hopefully in the IPO, it's worth a lot more than that. I think this is the healthiest wealth creation event in history. I think that XAI is severely underrated.

• 0:58Molly O'Shea?

  You think Elon's underrated?

• 1:10Speaker 00

  Welcome to Sorcery with Molly O'Shea, who's becoming very famous. It's great.

• 1:14Molly O'Shea?

  And I'm Sean McGuire.

• 1:17Molly O'Shea?

  I am a legendary X poster.

• 1:20Speaker 00

  Oh, shit poster. Post with a P-O-A-S-T-I-N-G.

• 1:24Molly O'Shea?

  So we have, I think, four different routes we can take this conversation. One of them is just gonna be exclusive to X because YouTube won't allow it. And we'll save that for the end. Which route do you want to take?

• 1:37Speaker 00

  Whatever you want.

• 1:38Molly O'Shea?

  You like math.

• 1:39Speaker 00

  You choose.

• 1:40Molly O'Shea?

  Okay.

• 1:40Speaker 00

  I don't know what's behind each of the doors, so you choose.

• 1:44Molly O'Shea?

  Okay, so let's start with SpaceX's upcoming IPO. I think a lot of people would love to have exposure to it. Would love to know the inner workings of what's going on. The latest is that there's gonna be data centers in space. So like, what is the update on SpaceX that people should know?

• 2:04Speaker 00

  Great question. I'm very privileged to be a major investor in the company. And I'm just gonna start with the caveat that I take that as a huge responsibility. And so I try not to share anything that I don't think is already like public. But I'm pretty good at packaging what's public because I follow it very, very closely.

• 2:30Speaker 00

  Look, I personally believe SpaceX is the greatest company of all time. I think the company is just getting started. And I have many other great portfolio companies. But I'm willing to say SpaceX is on a different level of every company. It's also just so fun to work on, like launching rockets into space. One thing for me that's kind of been a lesson of watching how Elon builds companies is he, I think he focuses on like the bottleneck and the most important thing. And then once that starts to clear up, then he starts to focus on kind of what you can do with the thing. Examples are, you know, the company didn't really start working on Starlink until,

• 3:14Speaker 00

  like really it became a serious issue in November 2018, which was out two years after they'd been doing reusable Falcon 9 flights. So like my, my impression was he intuitively understood and the company understood that Falcon 9, they'd passed through this giant kind of like challenging phase of getting Falcon 9 to be reusable. And they knew they were going to have a lot more launch capacity the next, you know, couple of years. And so it was finally time to start thinking about what do we do with all this extra capacity? And that's when they got really serious about Starlink. I think that a few things happened around data centers in space in the last six months or so.

• 3:56Speaker 00

  I think it's very similar, the same way that like you needed Falcon 9 reusable to become reliable. I think Elon and the company have gained a lot of confidence that Starship is going to be flying like reliably and reusable this year in 2026, like that's my strong sense.

• 4:13Speaker 00

  And very quickly, like within two years or so, I think the company is basically going to have an excess capacity. Like, they could launch all the just Starlink data satellites they wanted, all the direct-to-cell satellites they wanted. And they'd probably still have excess launch capacity in 2028 or 2029. And so on the one hand, you start thinking, what like, what else should we be doing to be filling this capacity that's going to come, you know, in three years or so? And on the other, and then like, on the other hand, like, we all know what's happening in AI. We're limited by power, limited by regulation, even, you know, which is probably even more restrictive.

• 4:53Speaker 00

  And kind of the combination of excess supply, launch supply coming online with Starship, married with this extreme urgent pain point on Earth, got the company thinking very seriously around, like, can we actually do data centers in space? Does it, does the math pencil out? And, I mean, Elon has spoken about this quite a bit publicly, like, the answer is yes. The public doesn't yet, like, the public hasn't yet gotten to see the full argument, like, hasn't gotten to see the math. But I'll just say, like, I think the math is really compelling and I think data centers in space. And I was on TBPN maybe six months ago saying, you know, I don't, I didn't say I don't believe in data centers in space.

• 5:38Speaker 00

  I said, like, it's the right macro. I'm not sure if it's the right micro, like, I haven't done all the math. I can say I have now done the math and I think it's going to be absolutely giant.

• 5:49Molly O'Shea?

  Is that what that big algorithm was when we walked in?

• 5:52Speaker 00

  I don't even know which algorithm.

• 5:54Molly O'Shea?

  Huge, yeah, you have a huge whiteboard over there, crazy.

• 5:57Speaker 00

  Unfortunately, I don't, you know, I didn't use the whiteboard, so that's not mine, that's someone else's.

• 6:02Molly O'Shea?

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• 6:43Molly O'Shea?

  With same-day and even same-hour liquidity, access your funds anytime. Companies like Scale AI, DoorDash, ServiceTitan, Hims, Anthropic, Flexport, Robinhood, and Plaid. Trust and use Brex. Start today at brex.com/sorcery. That's B-R-E-X dot com slash sorcery. So of those things, I also want to talk about Starlink. Could you break down that business for people who don't know?

• 7:12Speaker 00

  Sure. Starlink is an incredible business. You know, it's right now, the kind of the first wave of Starlink was providing consumer internet from space, primarily in rural areas. So the way it works in simple terms is you launch a rocket. The rocket, like the initial V1 had about 60 Starlink satellites per launch. So you have these satellites in the sky that, you know, we've now kind of gone to two or three generations past that. So you have, we now have about 9,000 satellites in space. These satellites can talk to each other using laser links. So they're passing huge amounts of data, you know, terabits per second, back and forth in the constellation.

• 7:56Speaker 00

  And then you have this giant space infrastructure. And then on the ground, people have user terminals, which is just a little dish that's 10 inches wide or 12 inches wide or so, that is what's called a phase array antenna. And it's basically a bunch of radio waves that you can steer to basically lock on to a satellite and move from one satellite to the next is, you know, every 20 seconds or so is a satellite is moving out of view. All right. And.

• 8:28Speaker 00

  So basically, all it takes is these ground stations, or sorry, these ground terminals at your house, or on your car, or whatever, or in an airplane now. You have these satellites in the sky. Data is moving from satellites to the ground and in space. And we kind of built the equivalent of all the long-range fiber optic cables that we had on Earth. So, you know, if you go back to like 1999 or so, Global Crossing is a big deal. They laid fiber optic cable across the Atlantic Ocean, made a lot of money moving data. Now these fiber optic cable equivalents are in space. You don't need the cables, because it's just lasers talking to each other in free space.

• 9:07Speaker 00

  And so it's really like the best way in history to move data long distances. Starlink is now moving like a large fraction of the world's long-distance like data. And so anyways, like the consumer business was act one, then started to get into enterprise business. Aviation was one of the first markets where that started to do well. I think aviation is gonna, like, and so now we're seeing it. Qatar Airways was one of the first airlines, you know, United signed up. JetSuite X was actually the first airline, if I remember correctly. And we're kind of getting this fiber going now, where when people get on an airplane and they use Starlink and they have this magical experience, I think a lot of times

• 9:50Speaker 00

  they're realizing, especially if you live in a rural area, like Starlink internet on an airplane is way better than the internet, than like the cable internet you have, or dial-up, or whatever, you know, depending exactly where you live. And so I think more and more people are getting awareness that way and will buy Starlink. And then now there's a new product, which is, well, and then the next product after that was the government product, Starshield. And now kind of the newest product in the Starlink family is direct-to-sell. So this is cell service from space, pretty insane.

• 10:26Speaker 00

  It's, you know, and so direct to cell initially is for like the kind of most room. Technically it works everywhere, but SpaceX is limited with how much data can move into really dense places like, you know, dense cities.

• 10:44Speaker 00

  Starlink has a weird property that compared to terrestrial networks, like with the terrestrial network, you know, when you build a cell tower, you have coverage just within a couple of miles or whatever of the tower. With a Starlink satellite, it has coverage, you know, over like everywhere it passes on its orbit. And so a lot of time is passing over deserts or oceans or places that are not very populated. And so we have like an excess bandwidth capacity in remote areas and like a shortage in dense cities. And so direct to cell is initially working with kind of many of the global carriers. Like T-Mobile in America was the first one.

• 11:26Speaker 00

  And when T-Mobile has bad cell service or low coverage, then they can kind of move on to the Starlink network and data will move directly from space to your phone. So basically these satellites are mimicking, they're spoofing cell towers. And it's going to be an absolute, you know, SpaceX just announced that at the end of last year, they had 9.2 million subscribers on the, on the, on core Starlink consumer side and 6 million direct to cell subscribers. Direct to cell is growing very quickly. And when we go like five years from now, all of my underwriting is, I think direct to cell will be probably even bigger than the original consumer internet business.

• 12:10Molly O'Shea?

  And what are the economics behind that? Maybe even compare it to legacy businesses.

• 12:16Speaker 00

  Yeah, the economics are unbelievably good. I don't, there, there have been some very sophisticated analysts that have kind of put out their estimates. I don't, I may know too much here, but I will say it's incredibly good margins, incredibly strong unit economics.

• 12:33Speaker 00

  The, you know, and it's, and it's very like positively disruptive. The same way how like Africa leapfrogged with cellular communications. And instead of putting landlines everywhere, they kind of went straight to cell phones. Like Starlink is really a leapfrogging technology. You don't need to have like ground infrastructure. And so you're, you know, we're seeing schools in Ghana, you know, using Starlink so that kids can learn. Anyways, the unit economics are, I think it'll all come out in the S1 and the unit economics are incredibly good.

• 13:13Molly O'Shea?

  In our interview with David Serra, we propped up one of the hats with like a red buzzer button and he pressed it whenever he didn't want to comment on something. I'll just have to get a no comment, but that was a good answer.

• 13:27Speaker 00

  Yeah, I'm trying, you know, trying to give you something.

• 13:28Molly O'Shea?

  Maybe this could be a fun question is like the unintended consequences of what it would be that the, the impact of like unleashing internet and cell to the world. I mean, I at least notice it when I'm taking a flight. United, I think it's fake, but you know.

• 13:47Speaker 00

  Well, it's not very, it's not very heavily penetrated right now.

• 13:50Molly O'Shea?

  It's definitely not.

• 13:51Speaker 00

  It takes, you know, I would say within, I haven't seen the numbers in a while. I think it's probably within nine months or so, most of the United fleet will be upgraded, but they install Starlink when a plane goes down for its like annual or biannual maintenance. And so you kind of have to wait for the plane to hit its scheduled maintenance window.

• 14:10Molly O'Shea?

  I guess that's a good thing.

• 14:12Speaker 00

  Yeah, it's a good thing.

• 14:12Molly O'Shea?

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• 14:45Speaker 00

  Yeah, I call this internet everywhere.

• 14:49Speaker 00

  Look, I think it's gonna be insane. And I think it's gonna feed into a lot of the other Elon companies. Like, when you have a self-driving Tesla, now you pair that with, you know, Starlink. And whether it's direct-to-sale or whether it's, you know, they put a dish on the roof of the car, which someday, I don't know why they wouldn't embed, you know, like a dish directly in the car, because then you just have a bigger, you know, an optimized radio. I, like, imagine you're in your car, and you have Starlink, and your car is driving yourself, and you have perfect internet everywhere, and your car starts to become, you know, your living room. And you're doing your Zoom calls, or, you know, watching Sporting Match, or talking to your grandkids, or whatever.

• 15:34Speaker 00

  It's just, like, we're going to go to where we have internet everywhere. Optimus is gonna use this, like, you know, military drones are gonna use this.

• 15:47Speaker 00

  Like, kids in Africa are gonna use this. We're already, I mean, something that I think SpaceX has been very good about is whenever there's been a major natural disaster anywhere in the world, they're basically offering Starlink for free to, you know, because all the terrestrial, usually both power and cellular communications get knocked out. And so, anyways, like, it's just, this is an incredibly resilient additional layer of data movement that candidly is better than all prior terrestrial approaches in many settings, not in all, like, especially not in cities, but in, like, in most situations. It's pretty cool.

• 16:28Molly O'Shea?

  Within SpaceX itself, what is, what is a component that excites you a lot? Is it visiting Starbase? Like, what is the, what has it been like to be invested in the company?

• 16:39Speaker 00

  Well, I'll just say, like, the vibes of the company right now are unbelievable. Like, the team knows, the team knows that it's on the precipice of history. And...

• 16:52Speaker 00

  Like, everything to now has just been a warm up. Like, it's really, it's like, it's toy stuff compared to what's coming in the next five years. And everyone, like, everyone in the company understands this. Um, and so, like, the first thing is Starship. And, like, 2026 should be the year of Starship. That, you know, it will, I don't think people will fully appreciate, like, in 2026, what it means. When you go five years out, it's, it's really gonna, like, revolutionize a lot of industries. You know, and then I think in roughly 2028, it's gonna be the year of direct-to-sell. And SpaceX talked about this publicly, but it's gonna take time. You know, they just acquired a bunch of spectrum.

• 17:34Speaker 00

  It takes time to get, you know, antennas and phones optimized for the spectrum. And, uh, you know, they need a bunch of V3 satellites in space. But 2028, like, it's gonna be major cell service from space. I don't know exactly when the space data centers will start.

• 17:57Speaker 00

  But I think it's gonna, it's one of the biggest American opportunities ever. And then at some point, you know, at some point, the Nazis in the future, like, they're gonna land infrastructure on the moon and Mars. And, you know, then eventually land Optimuses on Mars and then humans. And, like, all, all this is coming faster than people think.

• 18:23Speaker 00

  So, and, and yeah, look, I, so I was, yesterday I was at SpaceX in Hawthorne. And I'm going to Starbase on, in two days.

• 18:33Speaker 00

  It's just this kind of crazy thing, like, when you go to Hawthorne now, like, the first time I went to Hawthorne, I felt like, oh my God, this is the most amazing place I've ever seen. It's a literal rocket factory. Uh, and now after going to Starbase, like, Hawthorne feels like the tiny, small, little, like, old. It's the, you know, like, the Super Nintendo compared to like a modern like PC. And I it's just I wish other people could get the experience of seeing what SpaceX building, the scale of infrastructure. And then the last thing I'll say is just the amount of vertical integration that's happening in the company. Like, I think it's probably probably the most vertically integrated American manufacturing company.

• 19:18Speaker 00

  And like when you're vertically integrated, it just lets you move with like a speed and flexibility that no one else has outside of China.

• 19:30Speaker 00

  And it's, you know, and that's where things like space data centers can just happen very quickly, like shockingly quickly.

• 19:38Molly O'Shea?

  Is SpaceX the first Elon company you've invested in?

• 19:42Speaker 00

  Yes, I first invested in 2019, you know, and cumulative invested probably 1.2 billion dollars and across all the different funds, that position's worth like about 12 billion dollars today.

• 20:00Speaker 00

  And, you know, in the 800 billion dollar valuation, and so hopefully, hopefully in the IPO, it's worth a lot more than that. And, you know, but I I really feel like it's just the very, very beginning of the company. And then I've been lucky after that to invest in most of the other companies. And I think they're all like I I'm maximum bullish on all of Elon's companies. I think he is still extremely underappreciated.

• 20:25Molly O'Shea?

  You think Elon's underrated?

• 20:26Speaker 00

  Well, 100% not like he's, I would say he's only gets like 10% of the appreciation he deserves.

• 20:32Molly O'Shea?

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• 21:18Molly O'Shea?

  They'll even give you an uncapped 1% match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com/sorcery. Paid for by Public Investing. Full disclosures in the description. What was the process to first get into SpaceX? Because I can't imagine that environment was at all as enthusiastic as this environment.

• 21:40Speaker 00

  No, look, I know this sounds crazy, but SpaceX in 2019 was a highly contrarian investment.

• 21:49Speaker 00

  And it was very hard, it was a very hard investment to convince people to do. And I didn't even really believe in it, you know, the year prior.

• 22:00Speaker 00

  And so the like the rough, and I know it sounds crazy today, but a few things. One, SpaceX in 2019 was just a launch company. In 2019, they did 13 launches. The total global launch market, it depends how you count it, depends how you count China, some of the government launches. But I would say in 2019 is probably like a five, six billion dollar market, like a dressable market. And the like, at the time, the way people thought about like the theoretical maximum EBITDA margin you'd have on a launch is like 40%.

• 22:38Speaker 00

  So it's about 2 billion of EBITDA as a, if you capture 100% of the market, it's like 2 billion of EBITDA as a potential, you know, thing. And so then you're, it's an industry that requires a lot of capex investment and, you know, depreciating assets. And so you probably have like a billion of profit if you capture 100% of the market then. And the company's valued at thirty six billion in two thousand and nineteen. And so like investing at thirty six times the like thirty six times the theoretical maximum earnings where you wouldn't be growing very much if you didn't find another market. Was like people just thought it was insane or stupid. And when I say people, there were some visionary investors that, you know, had invested very, very early.

• 23:24Speaker 00

  You know, I believe in giving credit where credit is due and you have people like, you know, Founders Fund and, you know, you have Valor and you have V Y and you have a bunch of funds. You have Steve Jervitson from D F J. Like you have people that really, really understood the long term potential way before I did.

• 23:45Speaker 00

  But in two thousand and nineteen, it was pretty contrarian or not pretty like extremely contrarian. And, you know, another thing was Elon at the time, like Tesla, when we first invested was about a seventy billion dollar market cap company. And so, and it was, you know, a couple of years, like shortly after production hell. And it just like the perception wasn't, you know, what it is today. And for Starlink, basically every prior internet constellation had failed. And I think if I, if I deserve credit for something, it's that like with my background in physics and some in communications,

• 24:28Speaker 00

  I was able to like understand that Starlink was actually going to work, you know, a year before it was working. And to understand like what questions to ask to, to really like underwrite that.

• 24:41Speaker 00

  And but, you know, so that was it. There was just this weird moment in time where people were assigning basically zero credit to Starlink because prior internet constellations had been failures and were assuming that the launch market was not going to grow. And Starship was like basically where people were assigning zero value to Starship. And so, I don't know, there was a weird, I would say, two year period where it was underappreciated. And then after Starlink got to about a billion of revenue, which was very fast, it was about twelve months after they got their first dollar of revenue, they were at about a billion of run rate.

• 25:19Speaker 00

  Like I'd say at that point, it became an extremely consensus investment. So there was this weird two year period where you could buy a lot of shares where. People didn't get it. And now it's like, good luck finding shares. No one wants to sell. And, you know, it's gonna be. I'm very excited for the IPO. It's gonna be pretty incredible.

• 25:39Molly O'Shea?

  How do you think that like initial caution, or I guess hesitancy on the business and having those early supporters has informed Elon in bringing in new investors? Because I feel like it's such a tight circle.

• 25:55Speaker 00

  Yeah, look, I. And that's part of why I am very careful with what I say. And I don't want to say anything that's not already public. I mean, I think to operate at the scale that Elon operates, he needs to, as much as possible, be able to trust the people around him. And, you know, and like, trust that people are gonna. Like, when you are as aggressive as he is, like, there's gonna be times where things don't look as good. And like, people need to kind of be patient during the hard times. And, you know, very trustworthy with information for what's on the roadmap. And so, yes, it is a pretty small group of people.

• 26:39Speaker 00

  And, you know, lucky to have been able to invest in most of his companies.

• 26:44Molly O'Shea?

  How did you get into the other companies? What was the process like?

• 26:48Speaker 00

  I mean, once I started working with SpaceX, got to know other people. And that's basically. And really, like, the teams, the teams in the other companies are just as good. They're just kind of earlier in their development cycles.

• 27:05Molly O'Shea?

  Which of the other companies do you think is most underrated?

• 27:08Speaker 00

  Honestly, I think they're all severely underrated right now. Like, I, I think that XAI is like severely underrated. And it, and it makes sense, like, the, its revenue scale compared to OpenAI, Anthropic, Google is obviously like much smaller. But it just kind of blows my mind that people don't understand how fast the company is moving. And like, you just have to look at the, the derivatives of progress. And then also just like, look the bottlenecks.

• 27:48Speaker 00

  I believe the bottleneck, at least for inference, is going to be like power. And even if you have the best model in the world, you know, if you can only like deliver it to 1% of the market or 2% of the market demands, like you're heavily limited in your kind of growth rate and expansion opportunities. I just, I think XAI is gonna, like Elon's the best in the world at Adams, and I think Adams are going to be a decisive factor in the AI race. And it just, the way Elon builds companies is different than other people. He builds, the way I described is he builds up potential energy, and then he converts that potential energy into kinetic energy.

• 28:32Speaker 00

  Whereas a lot of other companies, like they're kind of, whenever they have potential energy, they're just immediately converting it into kinetic energy. Elon builds gigafactories that are not producing any cars or revenue for like five years, and then immediately start making, you know, a million cars. And, you know, he's, the company spent a decade trying to get from, almost a decade from Falcon 9 to Falcon 9 usable, and then very quickly they get Starlink going. You know, now they've been spending almost a decade on Starship, and it's like $0 of revenue from Starship today, but it's about to be an unbelievable amount. You know, like with XAI, they've been building, you know, the biggest coherent training clusters in the world,

• 29:16Speaker 00

  and they're just not really focused on monetizing them right now. And I just, it's kind of crazy to me that people don't understand the pattern yet. And, and it's not to say that I'm bearish on the other foundation model companies. I just think XAI is gonna shock people with the scale that it gets to quickly. But I'm bullish on all of them. Like I'm bullish, I'm bullish on the Boring Company, I'm bullish on Neuralink. You know, Tesla's a public company, so I have no comment on Tesla. But I'm literally insanely bullish on all of them.

• 29:47Molly O'Shea?

  What are your thoughts on just the massive spend in the category?

• 29:51Speaker 00

  I think it's rational.

• 29:53Molly O'Shea?

  Okay.

• 29:54Speaker 00

  A year ago, I probably would have been more bearish on the spend. I think that the...

• 30:04Speaker 00

  There's a lot of things that have happened that make me more bullish and think it's rational. One of which ironically, like I think the SpaceX IPO will actually help all private companies this year, including the AI companies, just because it creates a lot of liquidity and it draws a lot of capital, you know, into tech. And, you know, people are gonna like it's it will just create a lot of liquidity that can go into the next, you know, wave of build outs of AI companies. I also, you know, Anthropic is rumored to go public in 2026. Like, I think that like that will also catalyze a lot more, you know, dollars into the category.

• 30:46Speaker 00

  And then, you know, very importantly, I just think we've hit a point where the I think we have hit AGI. And, you know, and there's different definitions, but I think we've hit the point where like, I think we've definitely hit the point where in most fields of math or physics or computer science, like the best models are better than the average PhD student at like a top five research program. And so it's just like, I think we've hit this point where the economic value is going to be so extreme. We're seeing it right now in coding is probably the first real vertical. And then also just like the consumer kind of next generation Google equivalent, next generation search is ask

• 31:32Speaker 00

  whatever question, ask your, you know, like my, my son has eczema and like being able to ask questions about that and get a lot of ideas from the different models, like it's just unbelievably useful and has replaced a lot of my behavior and many people on the planet. But I just, I think, I think the whole field is

• 31:51Speaker 00

  becoming more and more useful at such an extreme rate that it justifies the capex. Investments. That's my personal opinion.

• 31:59Molly O'Shea?

  And hopefully lots of liquidity events to come.

• 32:01Speaker 00

  I think the liquidity events in 26 are going to be major. And I think are very important for keeping the whole, the party going.

• 32:10Molly O'Shea?

  Yeah, I just interviewed Snowflake's ER, CEO, Sridhar. And I asked him.

• 32:17Speaker 00

  Great guy.

• 32:17Molly O'Shea?

  Great guy. And he was so fun. And we, yeah, it was great. It was great. But they had one of the biggest software IPOs of all time. So I asked him about this.

• 32:27Speaker 00

  Plug, my partner, Pat Grady and Carlos Schenbach, they led an amazing investment in Snowflake. And, you know, it was really, it was an incredible investment. They invested a hundred million dollars at a billion dollar valuation, you know, like a few years before IPO.

• 32:40Molly O'Shea?

  But a question I asked him was, do you, like, what do you think on this immense private lockup? And do you think these companies should go public? And if you want to know the answer, you have to listen to the episode, obviously. But I'm curious from your standpoint, so as we move into, I also asked Vlad this as well. Because, I mean, he's a big retail, you know, he's a big.

• 33:05Speaker 00

  Love Vlad. I actually took graduate math classes with Vlad at Stanford when we were kids.

• 33:11Molly O'Shea?

  Really?

• 33:12Speaker 00

  Yeah, really. Math, like, real analysis, math two or five, A, B, C with, you know, Brian White, this professor that wore koala shirts every day. Anyways, I've seen Vlad come a long way and he's, he's a freaking legend.

• 33:26Molly O'Shea?

  So do you think most of these, we're past the stay private forever phase? And now we're actually to the let's go public, this is good for you. Vlad was like, it's actually much better than you think.

• 33:38Speaker 00

  Yeah. Look, I just think it's very company and timing specific. And like for SpaceX, this data center opportunity came up. And it just creates an incredible catalyst to go public. And I think it's 100% the right thing for the company, like, given our needs. And then there's other companies.

• 34:07Speaker 00

  I mean, like, the other companies like Stripe, where I think it's,

• 34:14Speaker 00

  makes sense for them to stay private right now. And so I just, it's very company specific and like it depends on.

• 34:22Speaker 00

  How much capital you need? I think at the end of the day, the public markets will, if you're a good business, will almost always be a better source of capital than private markets. But you have more control and kind of like flexibility to make very long-term investments if you're private. And so it's just, it's this trade-off between like access to capital versus long-term planning flexibility. But I hope we can see more companies go public sooner. I mean, just as an investor, I'm biased and like you need the liquidity events to keep the whole industry going. And so like, I hope the SpaceX IPO catalyzes some of these companies.

• 35:07Speaker 00

  I think a lot of people were using SpaceX as an example of like, they stayed private forever. So like, I can stay private forever too. I hope them going public will catalyze a lot of companies. Like, you better have a really good reason of why you're staying private past like, you know, a billion of a year of revenue and profitability.

• 35:26Molly O'Shea?

  Or series like Q.

• 35:28Speaker 00

  Series Q.

• 35:30Molly O'Shea?

  Founders ship faster on Deel. Set up payroll for any country in minutes. Hire anyone, anywhere. Get visas handled fast and get back to building. Visit D E E L dot com slash sorcery. That's D E E L dot com slash S O U R C E R Y. Given your exposure from early stage to growth stage and SpaceX's IPO, I think this is like an interesting kind of situation here. In LA, this is gonna be the biggest wealth creation event in a very long time.

• 36:01Speaker 00

  It'll be okay in Texas, too.

• 36:02Molly O'Shea?

  In Texas as well. But since we're in LA and like you're an investor in a lot of companies here as well. One, what do you think the unintended consequences of that would be on productivity here? I've talked to some founders and they're a little worried because some of their employees have like 70 cents, you know?

• 36:20Speaker 00

  I don't, I think that in most companies, it's kind of destroyed the culture. I don't think that's gonna be the case at SpaceX because SpaceX is such a mission-oriented company. And as I was saying before, the next five years and then five years after that have like the coolest freaking milestones ever. And a lot of the teams have been working towards this. I mean, some for 20 years, you know, many for the last five or 10 years. And it's like, why would you slow down or retire when we're about to? Put people, like humans, on the moon and Mars. And I think it's just, there's something like the, the reason to work hard at SpaceX

• 37:04Speaker 00

  transcends the mission of most companies. And I think it's isolating from a lot of the bad behavior that comes from like if you are, if you're working for a social media app company and now you're rich, it's like, okay, I can go keep, you know, giving AI slop to children or, you know, like, or go hang out on my mega yacht, you know, or in this case, it's, and I'm sorry, that's not a dig at any one company, like I, it's, it's just a general statement. It's really just a value statement that like the SpaceX mission is one of the coolest and most pure missions of any company in history.

• 37:48Speaker 00

  And so it's, it kind of transcends just the typical incentive system.

• 37:53Molly O'Shea?

  Given the fact that this is a huge wealth creation event in LA, also in Texas, Sequoia, very large investment firm, many exits. How do you prepare founders and founding team members for these liquidity events? What are your wealth tips?

• 38:13Speaker 00

  I don't have, like honestly, I don't have a prepared answer and I don't like, nothing immediately comes to mind.

• 38:22Molly O'Shea?

  Could be even psychologically.

• 38:24Speaker 00

  Yeah, no, the psychological is the most important thing and it's, like, I've had a lot of bespoke conversations, like with individual founders.

• 38:36Speaker 00

  And it's kind of tailored to them. I'm really not worried about it in the case of SpaceX. Like in the case of SpaceX, I think, I think these people are going to go on to do the most amazing things with their money. You know, there's this meme that a lot of, like, I'm sorry, but like the wives of tech billionaires have gone on to.

• 38:57Molly O'Shea?

  NGOs?

• 38:57Speaker 00

  Do all these NGOs and like. Bad causes candidly.

• 39:04Speaker 00

  I think SpaceX is gonna be the literal opposite. These are like the people that were there the longest. You know, like the people that are gonna make the most money are the people that have been there the longest. And the people that have been there for fifteen plus years. They've had to battle, you know, environmental groups and they've had to battle. They've had to battle, you know, physics. They've had, you know, like they've been building hardware. They've had to be so frugal. Like it's already a culture that one is prepared. Like these people are naturally frugal. They're also naturally driven by what I consider to be very positive things. Like most people that joined SpaceX more than fifteen years ago, like they did it for the mission.

• 39:48Speaker 00

  They did it because they love space and they wanna like build rockets and they wanna, you know, work with their hands. And they wanna keep America competitive in space industry, et cetera, et cetera. It's just like it's self-selected. And I think most people didn't, the people that were there early didn't think it would ever become this big of a company. So they didn't do it to get rich and they got rich very slowly. And they got rich with like very real skills and real world experience of how like candidly like how much of the world is designed to like take money and do bad things with it.

• 40:27Speaker 00

  And so anyways, I, I think this group of people, like I think we're gonna see more beautiful travertine sculptures in cities, you know, like just for public art. I actually know I have two good friends that were pretty good friends that were pretty early SpaceX people. They'll have to become artists and it's just like that's their passion. And I, I think we're gonna see really, it's not gonna be like any other tech wealth creation event. Just because of the nature of what the company does, does like does and how slowly it happened. And the people didn't work there just to make money. And the like the hardship that they've had to go through to get where they are. It's gonna be sweet.

• 41:09Speaker 00

  Get ready for more like real positive stuff and just quirky things. Like I hope, you know, I, I used to go to Burning Man, probably ten years, something like that. And I had some very good friends in my camp built this thing. They called it a movable feast. It was a. Like a movable dining table. So basically, it either had a motor or that you would steer like a drive, or you could pedal it. And to go on the movable feast, you had to wear a black tie. So we would, you know, we would wear a black tie. And then a couple of other people from the camp. So some would be participants, some would volunteer to be like surfers. And would literally go around on this movable dining table

• 41:53Speaker 00

  and eat like a three or four course meal in black tie like in the desert. And I know that sounds just absolutely stupid, but it's so whimsical and so fun. And when you have, when you get like eight to 10 people in this very unique, crazy, just fun environment, it's just fun and you bond with people. And I think we're going to see a lot of like whimsy out of the, like physical whimsy out of the SpaceX crew.

• 42:19Molly O'Shea?

  More inventions.

• 42:21Speaker 00

  So much stuff.

• 42:22Molly O'Shea?

  Okay, so this sounds like a healthy wealth creation event.

• 42:25Speaker 00

  I think this is, I really do think this is, I think this is the healthiest wealth creation event in history.

• 42:30Molly O'Shea?

  Hey, it's Molly. If you enjoy our interviews, check out our newsletter, sorcery.vc, where we deliver a once a week top deals and tech headlines email and also go deeper on our podcast interviews. Subscribe to Sorcery today. And don't forget to subscribe to the podcast on YouTube, Spotify, Apple, or wherever you listen. Link in description to sign up.