Anpanman - The future is NOW

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:09] Speaker B: It will just basically come to your phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Listen, the opportunity that we have is very, very, very large.
[00:00:27] Speaker A: Hey everyone, thanks for joining. As I said last night, um, there was probably going to be another one of these Spaces because there'll be more news out and then I'll have to, um, I'll have to do another Space. Uh, but yeah, I decided to do just that, host another Space. Um, there's been some information that's come out overnight and then of course, um, I stewed a bit and thought about what Scott had presented at UBS and, you know, kind of pieced together what some of the implications are. And so I just wanted to talk about it. So yeah, one thing we learned yesterday evening was that American Tower filed a 144. This is in regards to the shares that they own. And so for those that don't know, American Tower has been an early strategic investor. They invested in the company before it was public. I think that was a Series B round. And then they also invested in the company's IPO in 2021. And so the company, oh, sorry, American Tower had about 2 point— let me see here, basically 2 point— was it 2.5 million Class A shares and then 2.2 million Class B shares. And yesterday they filed, you know, after the market closed in the evening that they had on a 144 basis had planned to sell 2.29 million of their Class A shares. And so that would bring their total ownership down to around 2 point— was it 2.4 million shares? And for some context, you know, American Tower is not in the private VC investing game. I remember hearing from Ed Knapp, the CTO or former CTO, he's now retired, that American Tower never really makes venture investments or investments in other public companies. And so I think yesterday's transaction was to essentially take some money down and recognize a gain. And so American Tower, based off of their private investment and their public investment, you know, the Class A shares they bought at $10. I think the private shares they bought at much lower levels, maybe it was the $3 level. So I think the average is around $6. So for a $31 million investment, they turned that into $341 million. And so that's not a bad return, 1,000% return on investment. And, you know, I think one thing to keep in mind is that American Tower was an early investor and supporter, and in many ways I think it was an opportunity for them to kind of hedge their bets and see what this potential industry was going to morph into. And back then they probably saw the potential but didn't really fathom the potential disruption of the industry. And so fast forward to today, when you look at American Tower and Crown Castle and SBC, like their business is actually derated quite a bit. The reason why that is, is this whole idea of direct-to-cell and satellite coverage, you know, blanketing rural areas or areas where it's uneconomic, that actually crimps quite a bit of growth for these tower companies. Now, obviously they're still going to be relevant and they're going to charge rents for their towers, but the opportunity to extend out and capture additional CapEx dollars from the M&Os, like some of that's going to be evaporated, right? And perhaps they'll focus more on densification of urban areas and whatever. But yeah, there is a leg of their growth that's being kicked out. And the other thing that exacerbated this and caused a big de-rating in the stocks is the fact that EchoStar decided to get out of the mobile network operator business. And so, you know, Dish Networks, which eventually merged into EchoStar, I think it spent like $10 billion on CapEx and building out their network to deploy their spectrum. And they still had a long ways to go to meet coverage requirements for the FCC. And as a part of that, obviously they didn't, according to the FCC, they didn't meet their requirements. And then the FCC was like, well, guys, you got to sell your spectrum. And then Charlie Ergen, in a bind, decided to sell his AWS-4 and parts of AWS-3 spectrum to Starlink. And so what does that mean? Well, for the tower companies, Dish was driving a significant part of growth for the entire industry in building out towers to deploy their network. And then EchoStar was like, you know what, we give up. And so that entire growth vector is gone. But not only that, like, you're— that area of growth is gone, but then that spectrum that was supposed to be deployed terrestrially is actually going to Starlink, and Starlink is going to bring that to bear to provide coverage across the US for direct-to-cell. And so not only did you lose that growth vector, now it's being basically used against you in the sense that that any potential buildout in some of these areas that might need coverage might just get covered by AST SpaceMobile or Starlink. And so that's why the towers have been derating recently and you've seen American Tower raise additional money. I mean, they're always raising money, but these tower companies are pretty leveraged. American Tower in particular has $1.9 billion in cash, but they've got, I think, like over $50 billion of debt. And so by monetizing some of this stake, I think it's probably a smart corporate finance move and something that the board was like, hey, you know what? We're not speculators. It's, you know, our relationship is strategic. And for those unfamiliar, you know, American Tower actually has right of first refusal to build the gateways, the ground stations that will have the gateways, but also host racks of the eNodeBs that integrate into the MNO's core network. And so they are strategic in that sense that they're a partner, but then, you know, if they, from a right of first refusal, if they decide not to do that, then we'll just partner with someone else. But yeah, that sale yesterday, which typically when you have a 144 filing, the sale happens the same day. And so we saw yesterday the stock, like for a very short period of time dipped under 70 and it was like a sloppy seller. I don't know who at Barclays was working the order for them, but I think they screwed that up. But that, you know, selling 2 million shares and change over the course of the day, probably early in the day relative to an 11 million volume day, that's going to have a pretty big impact on the stock, which is why we saw it flat. But that just goes to show some of the industry disruption, you know, there's, for a company like American Tower, which is viewed as like the gold standard for towers and it's always been a stable business, they're kind of, you know, in a strategic crossroads, especially with direct-to-cell becoming more of a reality. But anyway, I did want to talk about the UBS conference yesterday. And so there were a few things, you know, I did discuss it, but I, you know, thought a bit more about it. And one thing I noted is that, you know, Scott was a bit, quite a bit more forthright in terms of his discussion about the company's business. And, you know, he gave us quite a few nuggets. And so if you kind of tie those nuggets together, it actually gives you a pretty interesting picture. And so the first thing I'll touch on is that, you know, he specifically mentioned that they are about to secure additional manufacturing space, which will be solely focused on manufacturing Microns. And so I think you would do that because you, you know, you obviously want to optimize production and have a dedicated facility where, you know, it's not juggling multiple things at once. But I think this whole notion of having a focused effort on pumping out more microns, I think that kind of hints at other potential applications. So if a factory is dedicated to just building, you know, the micron with the solar panel, and then, you know, the slots for chips and batteries, but then not necessarily putting the finishing array on, you could see that being utilized as a building block for other applications. And so I think that was an important nugget that the company hasn't disclosed before. And obviously, you know, we're at 500,000 square feet of production and now they're looking to expand that further. And then the other thing that ties with that is the fact that the company, or, you know, Scott specifically mentioned additional shells. And so Not only did he talk about a couple of shells, which is, you know, Block 1 low band shell, and then, sorry, Block 2 low band shell, and then what will be Block 3 mid band shell. He also talked about a government shell. And so that's never been disclosed before. And so that, I think, you know, hey, we're going to, we're going to ramp up production of microns in, in particular, we're going to have it in a completely separate space. Which to me says like we're going beyond 6, you know, enough micron production for 6, enough for 6 satellites a month. I think they're, they're looking to put up to 10 to 12, but then even beyond just for their needs, they're going to be making these microns for other applications. And so then, you know, he disclosed that this whole idea of a government shell, right? And so. I haven't heard that said before. And so if you kind of tie those 2 things together and what we're on the cusp of, which is hearing back, um, about Golden Dome, I think he's kind of tipped his cap that we're expecting some type of Golden Dome award soon. Right. And so in particular, like during the conference, he talked about some of the applications, which is, um, actually I've got to go back. I mean, he talked about radar very specifically and sensing. Just go here. But yeah, that's the first time I've heard the company talk in granularity about other applications. He also discussed connecting various digital assets that are on the battlefield. For example, For those who are following like Anduril, you know, these headsets and goggles and things that will be connected. And obviously like the key thing about which Katzi has pointed out for a connected battlefield is the fact that, you know, soldiers are going to be overwhelmed with so much information, right? So a soldier typically, like if you're, not that I'm even close to qualified to talk about this, but I can imagine if you're on a battlefield and you've got maybe a headset and you're listening to something in the old days, And then you're looking through your eyes, that's kind of the information that you're receiving. Whereas in the future, everyone's going to be connected. You're going to have a heads-up display in your goggles, and there's going to be all kinds of information coming in. And a lot of that stuff is probably not going to be usable. And so you're going to need some level of AI processing to bring the critical pieces of information to the fore for your Your soldier on the ground. And that's actually interesting because I think one of these folks who was talking about, I think his name is Gavin Backer, he had talked about AI data centers in space and how having, and this was in particular talking about Starlink, but having the ability to do AI compute in space and then delivering that to a connected device on the ground, you could see how that would would be very powerful, right? So if you had a number of troops or devices that are connected, but they need some level of AI compute, you could actually do that in space. And that connection between space and the ground would be much faster than having to, for example, send the signal up to space and then bounce back down to perhaps some data center in the US. And, and then it's processed and then it bounces it back and then sends it to, to the, the war, you know, the, the area where there's, there's, you know, this conflict happening. And so, um, yeah, maybe you, in the future, you, you could have some level of compute, maybe not a completely dedicated, uh, you know, satellite that, that does AI compute, but it will have connectivity, uh, to devices and then some level of AI compute on it. Which by the way, like we already know AST5000, the ASIC chip that they have is going to have an AI layer that, or, you know, software that it will be running to optimize, you know, the beamforming and dedication of resources, for example, like in a particular cell, if there's more users versus a cell where there isn't, then perhaps like, you know, the satellite will bring more processing power to bear. And the other interesting thing about The company's beamforming technology is that the antennas, you know, the company has talked about projecting down thousands of fixed cell beams. It can actually, within the same array, it could actually focus 2 beams or 3 beams on the same cell and create a situation where it's like MIMO, right? And so, and there is a patent. I'll go back and try to find it, but there is a patent where using the same exact array, but different elements, you can beam down multiple cells at the same place and improve throughput. And so that's why AI compute is important for the satellite already, because you want to be able to effectively, just like any wireless service, you're going to have areas where there's not as much demand and other areas where there is. And so you'll want to be able to dynamically allocate that. But anyway, But yeah, I think, you know, it's, it's kind of funny because, you know, Cook and I talked about this a while back and from some of these initial posts, people have had some level of skepticism and they should, right? This is like kind of an early, well, to us, to us who haven't been steeped in it and living, eating, breathing it for years, it seems early. Whereas there's already companies and that have been doing this stuff for quite some time, right? Um, private companies, but also Some of the larger players as well. I mean, overnight or this morning, yeah, it was overnight. There was an article in Wall Street Journal, which I posted about how Blue Origin has already been working on this effort around AI data centers. And then, you know, it seems like, at least from the outside looking in, SpaceX is now recognizing this as a huge growth vector and is going to start trying to put some level of AI compute capacity on their existing Satellites. And so, but now you're having a groundswell, right? Like now the theme is in people's minds and it's an area where, you know, people are going to start digging in and under— try, you know, trying to understand the physics more of how do you solve these problems in space? For example, you know, on the one hand, yeah, if you're not directly in the sun, space is really cold. And if you can find the right technologies to dissipate the heat. You know, there's no air, but if you can use radiators and other methods, being able to cool a data center in space should be economically and environmentally more attractive than doing that on Earth where you'll need, you know, some amount of electricity to pump water and then that water gets evaporated. But, you know, the water itself, you know, that's a finite resource, right?
[00:16:42] Speaker B: Yeah.
[00:16:42] Speaker A: Like, do you want to use water to water crops or do you want water to cool AI data centers, right? Like, I guess the long-term concern is that these data centers will eat up so much resources, there may not be much room left for humans. And so it gets back to, in a crazy way, like when you think about The Matrix or The Terminator, like the future where where just AI compute or some of these things in general kind of usurp all the resources of Earth to the point where there may not be room for humans. But anyway, that's really far into the future. But I think this whole notion of data centers in space helps solve that problem and at least gives folks an alternative to, okay, I'm going to acquire every square piece of land that I can and I'm going to build out nuclear reactors and I'm going to put solar panels everywhere and I'm going to have like water pumps going and I'm just going to build as many data centers as I can. Because I think what we'll find is that over the long run, that's just not sustainable and you're going to have to come up with other potential models. And part of that for long-term is putting these things in space. I guess my biggest issue is that because of these structures, maybe they last I think maybe 5, 6, 7 years, because that's, I believe that's kind of the lifespan of typical semiconductors, GPUs that are focused on AI compute. But I think there will have to be a problem solved and perhaps like Starship and Blue Origin, eventually when you have a reusable secondary stage, hopefully you pick up some of these assets that are floating on space that perhaps have You know, run out their useful meaning, their useful life, and you bring them back in one piece instead of trying to force all this stuff to just deorbit and burn up in the atmosphere, which in the long run, like that's not sustainable either. And so, you know, that's probably one of the biggest concerns I think around Starlink, for example, is that they've got, they're putting up thousands of satellites up every year and it's not a one-way street. Like eventually those satellites, thousands of them are going to start deorbiting. And so maybe in the early years, that's okay, but over the long run, what does that do to the atmosphere? So that's something to think about. So, which is why I think having larger satellites that can last for, instead of 2 to 3 to 4 years, last 10 years or longer. And then obviously at some point being able to have the technology to deorbit those things safely where they don't have to be you know, burn up in the atmosphere. I think that's probably another problem that I'm sure humans will focus on and try to solve. But, but yeah, so going back to this whole idea of AI data centers in the future, like, you know, Scott, when talking yesterday, hinted at some of these things where, and, you know, I've talked with management and it, I don't think, I don't think all of us really comprehend and maybe perhaps at the right time, there will be some discussion about it. But I think there is a pretty wide roadmap out there for the company. And if you kind of take a step back, you know, the core market of what we're doing, which is direct-to-cell and connectivity and comms, you know, that's a huge economic opportunity. And you have to pursue something like that in order to builds the, what I call the, you know, the power and networking platform that will be up there in space. But once you do that, like you can start putting all these other applications on top of it, right? So in 2021, 2022, you know, we talked about the consumer market, but then this whole idea about military applications was far-fetched, right? Like, I remember Katzi writing about it at length and he was an early proponent of it. And then, you know, Kook and I speculated about it. Um, you know, you could easily make the case for electronic warfare. Like you've got this huge phased array that can beam down signals. Um, and, you know, we, you know, I, with our experience with Starlink about the interference they cause, like, imagine if you purposely try to do that, like you try to jam, you know, in a particular cell where there's military operations going on. It's like, oh, it'd be convenient to take down a terrestrial network while, uh, our operations are ongoing, right? And so that's, that's a pretty straightforward use case. But then, um, you know, Kat stepped in, talked about PNT, position navigation timing, which is backup to GPS, which is now pretty much all the rage. Like everybody's talking about that. Um, but that's something that our satellites can do. And then radar sensing, because if you have this large, powerful phased array and can send signals down to Earth, you can see quite a bit of things in detail. that traditional radar can't see. And so that's, I think, what's been one of the key applications for the government's interest in AST SpaceMobile satellites for Golden Dome. But yeah, I mean, the reason why I bring this up is, you know, back in 2022, talking about the idea of military applications, people would kind of laugh it off. It's like, oh, you guys are crazy. You're just trying to hype it and pump it. But Fast forward today, it's like, oh, we've got 9 military contracts. We're going to be generating material revenue in this coming year. And we're on the cusp of getting Golden Dawn contracts, which I believe, you know, where there's 2 areas. One is quite large and the other one is pretty large, but we're on the cusp of getting a contract for Golden Dawn. And so when I hear like from the criticisms about bringing up the whole notion of AI data centers in space, it's like, oh, And this is kind of for the regular people, which I include, you know, myself included. When you talk about some of these new areas and themes, the initial thing is to, and this is what we are, this is our default, right? Like as an investor, you're taught to be a skeptic and to always look at things with a view of not disbelief, but you know, hey, before I look at any investment idea, I'm going to look at it with that high degree of skepticism. And eventually I'm going, you're going to, you know, based off of my work, I'm going to have to address these areas before I'll even consider making an investment. Right. And so this whole idea about AI data centers, I remember when StarCloud released their video and they had this massive solar array floating out in space. The first thing I thought was like, oh, Kessler syndrome. Like how is that thing going to survive? If it gets hit, that looks like a big target. And perhaps their approach is not the right one where you're probably going to perhaps have smaller satellites like a Bluebird satellite that can generate 100 to 120 kilowatts of power versus this massive phased array or this massive solar array. And then, but I think it's important because now you're seeing The nuggets kind of dropping where Google is already in the pilot program with Planet Labs to put up 2 CubeSats. StarCloud, I think this morning released that they had did their first, they had just executed their first AI workload on the NVIDIA processor that they put up in space in a CubeSat. And yeah, I mean, Elon Musk, like, God bless him. Like the guy knows like where the action is, like he will He will see a market opportunity and he will go pursue it. And you know that happened with direct-to-sell. I kind of joked with someone that Star Cloud—it's kind of a blessing and curse, right? Like when you have Elon Musk say, "Hey, this is a market that's worth pursuing. I'm going to go do it." On the one hand, he sucks the oxygen out of the room, but on the other hand, he brings education and interest. And so similarly, in August of 2022, when when Musk announced with T-Mobile to try to win the marketing battle, like, hey, we're creating this new market called direct-to-cell and it's going to change the world and you're going to be able to use your regular phone and connect in space and there's going to be no dead zones. And of course, for those that have been following it, Abel created AST SpaceMobile in 2017, has been working on it for a number of years. But of course, Musk said, We're going to be the— we're the first to ever do this. It's novel. Um, and of course, yeah, over— of course, for, uh, an AST SpaceMobile shareholder, like, that was a bit of heartburn. It's like, oh my God, um, now we've got to figure out, like, how do you message to people? Um, and you know, you're defending your investment. You're like, okay, yeah, he's entering the market because— and this is the positive side— it's like, because it's huge, it's massive. He— it's— there's a tremendous amount of opportunity. And he's not going to go enter into a market where there's, you know, it's like a few hundred million in size. No, he wants to enter markets that have TAM of billions of dollars. And so for the skeptics back then, they were like, well, it can't be that big. And, you know, if they knew about AST SpaceMobile, it's like, oh, you know, Starlink's going to crush you guys. Of course they didn't know anything about the company. But fast forward to today, you know, you've, Obviously that market's going to be huge. It's basically forming around 2 players, which is Starlink and AST SpaceMobile. Starlink has, I think, I've got to update my numbers, but I think they've got like 10 or 11 MNOs globally and we've got 50. They cover, I think like 300, 400 million subscribers, maybe no, 300 million. And then we cover 3 billion subscribers. And so that's a big market, Right. And to his credit, he saw that opportunity and he's pursuing it. And it just, if you look at Starlink's growth, a lot, a big majority of it's going to come from direct-to-cell over the coming years. Like if you look at Morgan Stanley or some of these other research analysts that cover SpaceX, you'll look at, especially on the subscriber side, of course, a majority of the growth is coming from, will be coming from direct-to-cell. And then in terms of financials, I think it's like 2/3 contribution of top line growth and profitability will be coming from direct-to-cell. And so that's good. I mean, you've got 2 players in a duopoly and that's a huge market. That's where you want to be, right? And so I think the reason why I bring this stuff up is that now, you know, Musk is talking about data centers and everybody, the initial reaction, just like mine was, you know, maybe a month or two ago was like, haha, yeah, whatever. But then you dig into it and it's like, oh, this actually makes a ton of sense. And that's where I think, you know, I tweeted this morning about 2026 being the year of space investing. I absolutely believe in that. I mean, we're now, it's almost like a coming out party where for those people who have invested, researched the sector for, you know, 4 or 5 years now, It was kind of, space has been a backwater and it's been like a niche thing and, you know, people kind of poo-poo it. But now you've got SpaceX going public, you know, as soon as the end of the summer next year at a $1.5 trillion valuation. Like there, the amount of capital and mindshare and investor interest that that's going to draw is going to be huge. Right. And so leading up into that, you're going to have, just like we're seeing, I mean, overnight you're going to have a drumbeat of articles from the popular press, from financial press, like, oh my God, this thing's going public. And, you know, what does it mean? What are they doing? And in the article, like in Bloomberg overnight, you know, they, folks at SpaceX specifically, you know, their sources specifically said like the $30 billion IPO, like a big part of that allocation is going to go towards this effort of building data centers in space. And so whether people like it or not, they want to poo-poo it, it's happening and it's going to happen. And whether it's successful or not, who knows? But the amount of CapEx dollars that are going to be thrown at it, it's real. And it reminds me of like, I remember Steve Larsen was telling me and Cook back in 2022, he was telling us about AI and machine learning because one of his specialties was machine learning. And he was like, yeah, this is going to be huge. And for us, like there was no real way to invest in it. And I kind of poo-pooed it because I was like, okay, yeah, artificial intelligence, like that sounds great and all, but then for me in terms of practical application, like what do I care? And of course now, like I got a subscription to ChatGPT and Gemini and I use both daily. Like I don't, I almost rarely surf the web. I just like throw shit questions, like everyday questions, like, oh, I'm having a plumbing issue, or how do I optimize this? Or the kids have a little rash like that. Like everything goes into these 2 chatbots and, oh yeah, I want to create a meme. I want to do something stupid. Like I just throw it in there or I want to make a video. And so fast forward, what, 2, 3, 4 years. And that's a very short period of time. Like I'm using in my daily life, I use AI constantly. And so now that I use it, now I believe in it. I'm like, oh yeah, that, you know, AI makes a ton of sense. And, you know, I subscribed to Google Gemini and now it's like integrated in all my apps. And, you know, my wife and I, for example, I mean, just, just, you know, we, we applied for a program for one of our children and we had to write this letter and we wrote like general ideas and, and you know, we wrote like the meat of it, but then we ran it through ChatGPT and it put together such a better reading letter. But it's just stuff like that, right? And so if you can imagine how quickly like technology changes and how we are dismissive of these initial themes, I mean, 2 years ago, 3 years ago, when Oklo and SMR were were going public and I saw them as SPACs, I was like, yeah, whatever. Like, okay, modular reactors. And I saw all the projections, like they're not going to be deploying these things until post-2030, right? Like they're going to have some test reactors and all this stuff, but I just dismissed it like an idiot. I just poo-pooed it. And then, you know, these things went public, like SMR and Oklo, like they cratered after de-SPACing. They were at 10, they went into the low single digits or mid-single digits. And I was, and of course, as any investor, you have that like smug reaction where you're like, haha, see, like I was right. I didn't invest. Thank goodness. When in fact, like, you know, that was just the dynamics of a SPAC going public and stupidly, like I should have just pulled the trigger and bought some speculatively, but I didn't. And then those things rerated, like, you know, SMR went to what, the 30s? And then Oklo went to what, 170, 180, because people then this AI theme became really big and then people are like, well, how are they going to power this thing? And then it's like, oh, well, nuclear is going to be a big part of it. And they pulled forward expectations on these highly speculative companies. And similarly, like, I think that is what will happen with space, right? Like you today, the skeptics will see AST SpaceMobile and you can pick any number of other companies, Rocket Lab, Some people have talked about Redwire, but these companies, people look at them and say, well, they only do this thing. And so why should I ascribe any value for this potential opportunity? Well, the first thing I would say is that in space, yes, there haven't been many large profitable markets. The biggest market is communications. And that's something that AST SpaceMobile is pursuing and it's it's defining and creating a new category within communications. But outside of that, Earth observation, you know, it's been pretty small, although that's, that's probably growing at a reasonable clip. And then you've got military. I mean, military, there's a whole host of applications. So there hasn't been much. And when you talk to, you know, folks in space, they'll tell you like, yeah, there's not like, there's a lot of hype and people talking, but there's not really stuff going on. What I mean by that is like beyond just sending up CubeSats and little test things. Like there's not real hardware being put up in space that's doing real shit. And so that's why this whole data center opportunity is huge because this seems like a logical application. Like once you get over the, you suspend your disbelief and you, You get, you know, you put that aside and you kind of think through the endgame, right? Which is like, okay, if we keep building data centers here on Earth, what does that do? Well, it's going to take up all the land. It's going to take up all the water, take up electricity, your bill that's going up every month. That's not sustainable. Like people are going to lose their shit and it doesn't make sense. And so where can you do this? Like, I remember 3 years ago, there was a guy that, you know, I do some private investing too. And there was a company that was pitching data centers on the moon. And when I saw that, and I was just like, yeah, that makes absolutely no sense. 'Cause that's your first reaction. You're just like, why would you put data centers on the moon? And then, and then fast forward to today, like now that data centers are eating up every single resource on Earth, it's like, okay, I get it. Like we need to move in some way, shape, or form, whether it's in orbit or on the moon or somewhere else. Like we need to move this shit off the planet because it's just not sustainable. And you've got to kind of view the opportunity that way, that it's not sustainable. And so you've got to find another place for it. And, you know, there's been some discussions about putting data centers underwater, but that's like a whole host of other problems. And, you know, it's like, okay, yeah, let's go put that data center underwater and let's like cook the ocean. because that's going to be good. So putting it in space, it solves the cooling problem. I mean, it's not an easy problem. It's still complex, but at least you're putting that heat outside. And in some respects, it's like exchanging the sun's heat. You're running it through a processor and then it's putting it back out in space where it was already going to be. But the thing about these companies that are already doing this stuff is space is hard and we all know that. Like if you're a company that's building a satellite, you know all the hard things that go into building something that's resilient against radiation, that can go through wild temperature swings, like hundreds of degrees hot and hundreds of degrees of cold and whatever electronics and things that you're putting together, it has to go through that cycle. And so that's why these companies are well positioned for the people who can look beyond just the current applications, but it's like, oh, this guy is building a satellite that's going to the moon. Maybe they'll be good at building satellites that can put a data center up in space. And that's why I think, you know, bringing it back to AST SpaceMobile, like it's important to understand what the company is doing, right? So it's standing up production facilities to build 6 satellites initially, but eventually 10 to 12 satellites a month. And people are like, okay, yeah, they're building satellites. So what? Well, those satellites can generate 100 to 120 kilowatts of power. And they're built to withstand the harshness of space. And so imagine like this big power generating satellite out there that already supports multiple processors, has communications built in, like Okay. I mean, simplistically, you can then imagine repurposing some portions of that, redesigning it and making it a data center, right? Or a hybrid, like a communications and data center. And so, but then people are like, well, yeah, but maybe other people can do that. No, no, but they can't. I mean, they eventually will get there, but you know, this company has 3,800 patents and patent pending claims. It has a novel, you know, one of the reasons why Starlink has not made a large satellite is because it's hard to unfold that much solar and phased array. Like if you look at a Starlink satellite today, there's a tiny phased array that sits under it. This is for fixed wireless. And then their next generation will have this like extending foldable array that gets, I think they're hoping to get up to 5 by 5 meters, but AST is putting out this phased array that is huge. It's like 2,400 square feet. And that was the biggest problem to solve. And it's like this thing that on one side you have power or solar, on the other side you have antennas, but this thing unfolds. It fits into a standard rocket fairing and then it unfolds this massive array, which is the size of a basketball court. I mean, that's really hard and the company has been at it You know, they've demonstrated 6 times successfully and they're going, obviously they're now ramping up for Block 2, which is, you know, the first launch will be on December 20th or as early as December 20th. But this stuff is hard. I mean, just putting it into perspective, like when Scott talks about putting up the most powerful satellites in terms of power generating capacity known in civilization, People forget like, you know, the, the, the FM1 and FM2, like those each are 7-ton satellites. Like sometimes people are like, well, you know, production, it's got delayed. And by the way, like that production delays, I think, um, as we've, and I feel very confident about this, that the US government is the customer for those 2 satellites. And I think they're part of the HALO program. Like, yeah, customer requirements do change and you do have to make adjustments, which is, I think, part of it. And of course there has been some production delays because this is the first of its kind. It's the largest. Previously, the Block 1 satellites were the largest phased array in low Earth orbit. And then these are going to dwarf those. Like, this is going to be, these new satellites are going to be 3 times bigger. And so, You know, it's 7 tons for FM1 and FM2. And then on average, the rest of the Block 2 satellites, which will be made of composites, are going to be 5.5 tons. Like these are not little CubeSats. You know, it's like Planet Labs, you know, they send up these like tiny Earth observation, they've got like a camera and they've got some power connected to them. And I know Google's like, hey, you know, we're going to put up 2, test satellites with you guys, put a processor in a CubeSat and go see if, you know, what the environment does to it and how it impacts compute. If you want to do something at scale that's big and, you know, that's going to be something that Google, who's a current strategic partner investor, that's like the US government, which is the military, Microsoft, I mean, any number of folks who don't want to be captive to the, what is forming to be a SpaceX, you know, vertically integrated stack. And, and, and that goes as well for, for Bezos, right? Like there, he's going to try to build capabilities himself and there's going to be some potential overlap or competition. Who knows? Right. Um, but we do know that, that, um, Bezos and, and Abel are friends and we're a very, very important customer for them. I mean, we're putting up Each satellite, we're putting up 5.5 tons each of payload. And for a rocket company to succeed and to iterate, it needs to go send things up in space. And it can't send tiny things like the Blue Origin New Glenn and 7x2 or 9x4, the Heavy. It's going to need real payload. And there's only one game in town. Like there's, out of all the customers out there, there's only one cut. Well, there's, there's Eventually, there will be 3 customers that are bigger than us in terms of who's sending payloads to space. One is the US government. The second one is SpaceX Starlink, and then eventually data centers. And the third is Kuiper. But then outside of that, like there's no one else. And so if you think about like expertise and flight heritage and people who know what they're doing, I know there's like some questions out there. People are saying, well, you know, how are they going to test their first satellite, when the Block 2 satellite goes up, like what happens? You know, it's risky. What do they do? And it's like, well, that's space. Like you have to send stuff to space and see if it works, right? And so we've done that successfully with BlueWalker 3. We did that successfully with Block 1, the 5 Bluebirds, 1 through 5. Those all unfolded successfully. They've all been testing well. And, you know, sure enough, Verizon, And Saudi Telecom, they've seen the test results. They looked at reports, they've spoken to the company, they've diligenced it, and they like what they see. And what Saudi Telecom recently did the deal back in October. And so there's not many companies that pulled off what AST has done, right? Like they're throwing up 5, you know, 6 to 7 ton satellites in space with the largest phased array generating the most power. That can communicate with Earth. And they also have optical inter-satellite links as well enabled, which originally wasn't part of the plan, but the government required that. And so that's now part of the satellite as well. And so I think I remember clearly speaking to the company, it was a conversation back in 2023, 2022. And It's not as if, you know, these folks are sitting on their hands like, okay, we're going to be done with Block 3. Like once Virgin Galactic and Bluebirds are like, we're going to be done. Yeah, we've stood up this 12 satellite per month capacity and, you know, we're just going to call it a day and just start counting the dollars as they come in. No, they're going to keep going. Like they're going to, you know, I tweeted this earlier today. It's this, you've got to like think beyond just what that constellation up in space means and the capability to put that shell And additional shells. It's like you're putting up a platform in space that's going to generate a tremendous amount of power and that is networked. And so what can you do with that? Like you're going to enable 5G communications and eventually 6G to devices. You're going to have position navigation timing. You're going to have radar. You're going to have sensing, electronic warfare, and AI compute. Like AI compute, when I think about all the problems that you have to solve, like that seems To me, like probably one of the easier problems to solve. Easier meaning all the infrastructure is there. You would have to probably improve the connectivity within the array. You're going to, I don't, I mean, and now I'm dating myself, but like, you might have to lay down like InfiniBand interconnects between the processors and you're probably going to have to cut down as many, the number of processors that can carry the array. But The funny thing is like that array actually is a passive radiator. That's the way they designed it. And so you saw, instead of like jamming all these processors into a very tight box, you actually distribute them and you use the array as a passive radiator. And so if you can imagine like this thing that's out in space and you can do all sorts of cool stuff with it, like there's a lot of different applications. I remember One of the things that Scott mentioned to me, this is when back in 2021, like we were talking about this, this is before he joined the company. He's like, you know, there's a lot of cool things you can do with the array. Like the array doesn't, by the way, you're like, you're not, you don't necessarily have to be listening to Earth. It also works the other way. And so these things can actually listen for things out in space. And so I know like there's researchers who are upset that Perhaps like, you know, for example, Starlink, if you get all thousands and thousands and thousands of satellites, like it's going to impact the ability for astronomers to do optical or radio listening in space. Well, guess what? Like we've got this huge platform that's orbiting space. Like you can use that for scientific purposes. Like we're going to listen for signals and all kinds of crazy things. It doesn't necessarily have to be just applicable to Earth. And so I think, you know, what I was, the tweet that I had posted before that it's pinned, this is like the challenge of being an investor, right? Like you've got to find the themes before they become something that people latch onto and whether it's hype and, you know, it blows up, but then it fails miserably, or you have this hype cycle, but then it actually catches on and it becomes reality. The key thing is to be early and to understand what you own and if it's applicable, right? Like when quantum, like IonQ and some of these other companies went public, like I looked at them personally and I was like, okay, this is a pipe dream. Like I don't think, and everyone latches onto the whole notion. And by the way, I'm not invested in them, but I'm just using an example. Like everyone latches onto the notion that, you know, quantum computers are so many years away. There's no practical applications for them. So why should I invest? Because I want to see like something now. It's all about like now, but that's not, you know, and maybe if you're a value investor or someone conservative, then sure, then that's your lane. But if you're a growth investor and you're looking for kind of the next themes, and this is what, you know, ARK infamously tries to do with their big ideas every year, you have to think steps ahead. And I think this data center kind of theme right now, and of course SpaceX going public in 2026, like this is going to be huge. And it's, and it's the reason why it's huge is that people see the billions of dollars that are being allocated to the data centers on Earth, and then they can extrapolate that pretty easily to space because, and it's not going to happen overnight. And you're going to need the cost per kilogram to go down even more, which once Do Glenn, you know, in its current configuration, but then in the future heavy configuration and Starship, when that eventually gets going, it's going to become really cheap to send this stuff up. And so when you look at the total cost of ownership and operations, which, you know, some of the biggest inputs are electricity and of course like land, space solves a lot of that. And so that's why I'm super excited about this coming year because every company is going to be touched by it and people are going to be looking for ways. I mean, just like individual investors and institutional investors are going to be looking for ways to invest in this theme. And then, but put those people aside, like the actual strategics in that where you know, this is going to touch, they're going to be looking for partners, right? So these data center companies are going to say, okay, yeah, it's going to, the going is going to be good for, you know, the next 1 or 2 decades maybe. But then in the future, I've got to diversify. I've got to figure out like, how do I parlay this into space? And then do I go, okay, do I go work with SpaceX? Like, do I trust those guys? What value do I add? Right? Because SpaceX has a ton of money and I bring some expertise around how to architect a data center, but yeah, maybe I can contribute that and we can figure something out. But then there's only so many players who will play with SpaceX and then it's like, okay, well, who else is out there? Well, I could maybe go work with Bezos or I could go work with AST SpaceMobile or I could work with Rocket Lab. And so that's the opportunity. Like there was someone skeptical overnight who was like, well, who's going to come up with $20 or $30 billion needed to build some of this stuff? And it's like, Customers, customers are going to come up with it. I mean, that's what they're doing. The customers are giving data centers money, long-term contracts here. We're going to give you money, go build it, go do it. And so who's going to fund it? Customers, like they're going to go, these data center companies or the US government is going to go to AST SpaceMobile and say, hey, it looks like you have all the right ingredients and you have the ability and the production capacity to to go build this stuff. You have the building blocks, you have the patents, you have everything. Let's do an agreement. Like, I'm going to give you like $20 billion to build some prototypes. And then I want to contract with you to actually put up a shell of these things. Like, that's the opportunity. And, you know, for some people who are like, well, it's detracting from the business model. Like, I don't know if we want to go focus in that area. You don't have to. Like you can just build it for someone else and let them run it. I mean, you can, if you can imagine standing up a factory and just making a few different changes, and I'm simplifying things, but if you make some changes to a Bluebird satellite, you can build it for somebody and you're like the prime and then they can go run it. Or in a very simple way, you can license your patents and collect really high margin royalties. And this is something that we've talked about for a number of years where eventually these patents are going to come around and be worth something, right? And historically they probably weren't because no one wants to do stuff in space besides communications and again, like observation and maybe some of these radar applications. But then now you've got a killer application, And it's going to need a lot of the patents that you have. And so that's going to be a money-making machine. Like, not only are people going to come to you to license those patents, and, you know, for example, the patent that we talked about, uh, the, the Micron, which is able to dissipate heat, you know, it's a big radiator in space, that patent's from 2021. Like, there's a whole trove of this stuff. And it's all relevant. And so companies are going to come to you to license the, I mean, a lot of these patents are fundamental in terms of satellite technology and operations in space. But then, so people are going to come to you to license them. Then of course there's going to be some people who are like, screw those guys. I'm just going to use it. And then that's going to, you know, if you recall all the IP wars, like around semiconductors and And over the last several years, like that's going to become a big thing. And AST has folks who are focused on enforcing those patents. They haven't done that yet, but eventually that will become a big standalone business in and of itself. And for those that are unfamiliar, I mean, if you look at NAND semiconductors, like the old SanDisk, I actually don't know about SanDisk in its current form, but back in the day, a significant part of the revenues and profitability came from their patents around NAND flash, which then Samsung, Toshiba, any number of players had to pay them royalties for every single NAND flash chip they sold. They had to send patents, patent royalty to the company. And so, yeah, I mean, it's an exciting time. I'm I'm super bullish. I think the previous high of $100, and I don't typically like talk about stock price targets or anything like that, but I feel like the high that we reached in October, which candidly part of that was like market, just in general, high beta names just outperforming. I think that's going to be like a new all-time low. Like we're, this 2026 is gearing up for some really special things. Because you're going to have a whole host of like new investors looking to invest in space. We fit so many different categories and we also are a platform for what I believe is going to be the next big thing, which is data centers in space. And so yeah, I would just say like, and as people kind of start understanding this opportunity and you'll see a lot of skeptics and people poo-pooing it, but Overall, like it's important to zoom out and just focus and see the bigger picture. Like when people start extrapolating what the opportunity is and what it means, they're going to start pulling forward the opportunity in terms of discounting that, right? And so that's where you get these types of situations like in quantum or you get, you know, in nuclear modular nuclear reactors where these things are not going to be relevant for everyday use, you know, 5, 10 years, maybe 5, 10 years from now. But people are willing to discount that forward and give those companies credit. And that's similar, the analogy around AI where I poo-pooed it 3, 4 years ago and ignored it, but now it's, I use AI in everything that I do today. And so that's a mindset you gotta have. You've gotta be able to kind of look forward what's going to be hot in 2026 and relevant. And it seems like AI data centers are that. And so there's one company that has the building blocks and the capability and will have the production to make it a reality, right? And I think that's something that I'm thinking about quite a bit more. It's like, who can put together a 6 to 7 ton satellite with that much power generation? There aren't many. And SpaceX, can't do that either. Like the Starlink satellites, you know, they're smaller in size and they generate a decent amount of power, but they're going to have to re-architect those things. And we already know about the issues they have as it exists to deliver their current service. But eventually they'll get there and they'll be smart. But the beauty of this all is that it's, and you'll hear this from some space mob who are zealots, but you'll hear this from The big guys, or sorry, the big like SpaceX fanboys are like, oh, well SpaceX is going to win the whole thing and just take everything. And it's like, no, that's not how the market works, guys. Like there's going to be room for multiple players. Like the opportunity is so big, you are going to, it's going to be tremendous and there's going to be room for everybody or not. Well, not room for everybody, but for a few leaders. Right. And so that's the opportunity today. That's what I wanted to talk about. Is that you're being able to shift your mindset, think about what's going to be big in the coming year and what's, what is the zeitgeist? Like what's going to be occupying people's minds? And SpaceX is going to be top of mind. It's going to be top of mind. $1.5 trillion IPO, $30 billion primary raise. You know, and when they go on a roadshow and talk to Fidelity, Wellington Capital Group, a whole host of investors all around the world. They're going to talk about like direct-to-cell. That's going to be a huge growth vector for them. They're going to talk about AI data centers. And so when those investors who for the first time are hearing about this area, they're going to be like, oh, that's pretty cool. And it's pretty big because this company's going out at a $1.5 trillion valuation and the projections look pretty hot. What else is out there? Like, okay, I'm going to try to get an allocation in the IPO. And then I assume I'll get some, but then maybe I need to form a specialist group to focus on space and figure out like what these other companies are doing because, oh, there's like, there's a few of these companies that are $20 billion in market cap that seem to be doing quite well. Like, what are they doing? Maybe we should go meet with management and go invest. And so that's, that's like the, that's where you have this aha moment, like this, this immediate rerating of awareness where Where it's like, shit, I need to put money to work in this area. And that's where you have like these overnight, almost what it seems like overnight, but what tends to be like multiple weeks, multiple months, like a sector completely rerating because people are now discovering the opportunity and capital dollars want to go into those names. And so that's what we face right now. You know, it's been a long 4 or 5 years for many of us, but space is happening. It's going to have its moment. It already is. It already is. It's like the topic du jour, like SpaceX and what they're doing. People are trying to figure out, okay, well, where should I invest in? What are the companies that are doing this? And they're going to find out like, oh, there's actually a few of these companies that are ahead of SpaceX, or they're going to build out a pretty significant market in a duopoly or an oligopoly with SpaceX. And so I want to go invest in those companies too. And so anyway, that's all I had for everybody. I think, yeah, this is going to be huge. And for people, yeah, call me crazy, call me a pumper or whatever it is. Like, I really don't care. My job is to make money and I want to know where the puck is going and I'm doing that now. And that's what you should do too. You should dig in, really get smart on data centers in space, really get smart on direct-to-cell, really get smart on Golden Dome and figure out who are the companies that are well positioned to go execute on this. And are they reasonably valued? Relative to the opportunity, and if they are, I need to figure out a way to get exposure. That that's that's your job. And yeah, there's going to be volatility, painful drawdowns. And by the way, like that's a feature; it's not a bug. Like that's that's for any growth sector, any growth stocks. Like that stuff happens. But again, this is a reminder to go out there and do your work, do your due diligence, and be ready because the the amount of attention and focus is coming and we're going to be surprised by it. I think we all are. I mean, if you had asked me, HT SpaceMobile during the dumps, when the stock was, the company was at a $700 million market cap, which by the way, like some retail Space Mob holders own back then, if we had owned as much as we do now in terms of dollar amounts, like we We would own, well, we would own the entire company in terms of market cap. But anyway, but that shows you how quickly things can change, right? As the company gets to the point of execution and revenues, which is where we are now. But then once the company's up and running and commercial service is going and we're building all these satellites, that's when the company will have the latitude to start talking about some of these other opportunities that it is working on. And I think, again, if you haven't already, go back and listen to Scott speaking at UBS because he dropped some pretty big hints. And I think those were intentional. And so this company, as we've known, has been quite conservative in terms of discussing these things until they become more of a reality. And so that kind of tells me that For example, you know, we talked about at the beginning, I think Golden Dome, we should be hearing something, you know, in the coming weeks, perhaps, you know, at latest sometime in January, but that seems like fait accompli at this point. So anyway, I'll end it out there and there. If, um, hope this was interesting, helpful. Um, I'm sure, like I said before, have another space tonight or tomorrow because like things are changing, but, um, yeah, we'll talk again soon. Thanks everyone.
[01:01:18] Speaker B: Thanks for listening to the AST SpaceMobile Podcast.
[01:01:23] Speaker A: If you enjoyed this episode and you'd like to help support the podcast, please share it with others, post about it on social media, or leave a rating and review.
[01:01:32] Speaker B: To catch all the latest news about AST SpaceMobile, make sure to subscribe.
[01:01:37] Speaker A: Thanks again, and I'll see you next time.
[01:01:39] Speaker B: We're doing something very very big, and I think with this technology we can really affect a billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular broadband connectivity directly from space to the everyday smartphone. People will just basically turn on their phone and be seamless regardless of where you are. We don't want the user even to know that it's connected by satellite. Our role is to bring this into reality, always in partnership with the animals. Listen. Mmm, waffles.