Kook’s Weekly - December 7

[00:00:06] Speaker A: This is the AST SpaceMobile Podcast. 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.
[00:00:25] Speaker B: Good evening, everyone. I can't believe what a loser AmpManMan is. He's doing a space right before this to suck the oxygen out of the room. But, you know, being a paid pumper is difficult. We get evaluated every week where the company gives us our pump points. And, you know, you can see AmpManMan works really hard because he thinks it's all about how many spaces you can do. I try to focus on quality. Not quantity. But look, you know, when the company is not positive cash flow, their pumping budget is tight. And, you know, so we all have to fight for those little scraps. And some would say that this isn't even a call about investing. And I agree, like I said in the comments, you know, it's just a bunch of bozos that sit around and talk about space after football. And it's like, can't we have some hobbies? Why does everyone judge us? And I don't get it. You know, some people just want to live in peace and talk about ASTS. Let us be. So this week was quite a week. It started off with, again, Anpanman, the immaculate loser, calling me, literally called me, he's like, Kook, are you still a bag of doorbells? I'm like, who are you, grandma? And it was true though. I was feeling like a bag of doorbells. And then the week took a different turn. I was just kind of blown away that everyone sort of puked on Monday because there's no PR, but I guess that's to be expected. Shame on the company at this point for setting up that dynamic every time. But then they sort of came up big with the press release that really said nothing but said everything. And I think what we know is there, we'll get into launching. It's so exciting. Yeah, let's just get into launch. So we have FM1 coming soon. So that's really exciting. Should be on next Monday, although With the time zones, I don't know if that means someday, some, at some point during Sunday, I'll gotta, I'll go check it out. But rest assured, I think a lot of us will probably try to get together with the Spaces. If I get my DD updated by then, what I was thinking what I could do, I'm sure my wife would super love this, especially if it ended up being like during the day on Sunday where I'm supposed to be with the kids, is I could actually walk through the DD doc sort of on a stream on YouTube.
[00:02:42] Speaker A: Yeah.
[00:02:43] Speaker B: while we wait for the launch and just kind of pass the time, talk through the research again for everyone and, and do that. But FM-1's coming. This satellite, it's, it's important to think about this one. I was debating this today with, um, with some guys and FM-1 and FM-2 are almost kind of sacrificial birds. They're, they're not using some of the, well, they're not using the composites that are are going to be used on the first batch birds. We believe they're SDA satellites. And so they're kind of on their own in terms of what they mean. But as Katsi really made the point, these were the satellites that were used to build these satellites. And so they're really sort of like the test hamburger going through the hamburger machine. To get the bus, which is the control set, to get that all organized and working, frankly, and get the new form factor ready to go, things like that. So they were very important even without them actually ever going up into orbit because the key is to debottleneck the production capabilities of this company to get to the new, whatever it's going to be. 6 satellites per month. Scott has said in some other venues that they have the ability to double that to 12 satellites per month. That gets to be such an incredible amount of capacity. You start to say, well, what for? And we have some thinking on that. But with FM2, what's very exciting is the plot has thickened a little bit on this. As Peter Lindmark commented, and of course the filing was first discovered by @justbar23, The 23 probably means he's related to Michael Jordan and we should be humble to that. He is the great one when it comes to FCC filings. And so he quickly pointed out that FM2 had an STA modification and it related to the orbit. And instead of the roughly 700-kilometer orbit, they were seeking to fly it at 460 kilometers instead of the, I believe it was 53-degree orbit. Or inclination that was intended. They're petitioning to get it changed to 50. They're making these changes because they're trying to hop on an earlier ride. And it just kind of shows you the point of what Scott says is that he really spends 24 hours a day working on launch coordination. I'm sorry, I have a little bit of a cough again. I don't know why. And so it's complex stuff. I can only imagine as we are sort of pre-mass development. And what I get excited about is the prospects of 2, 3, well, really frankly it should be, you know, in a month or 2 from now, launch is going to be just an on-cadence thing. We're finally going to be stacking up so many birds in inventory. We'll really be into the pull-down of our launch options. Where we're just gonna ship and ship and shoot, ship and shoot. And this is that concept of constellation constipation where right now, you know, we're really stopped up. Haven't had our fiber. That fiber's about to hit. And so in a couple months, it's gonna be very exciting. But in the interim, we're just seeing the complexity where we're not yet having the satellites, you know, pumped out at a fast rate. We're really at the beginning of our launch cadence. And so things like hopping on the soonest available rideshare, well, sometimes if we missed one flight for one reason or another, we've got to jump on another. We've got to potentially go into a different orbit. And that tells us a lot potentially about what's going on with these satellites. I like to think that we know that these are SDA satellites. And so these are satellites that are being done for the government. If anyone's watched this sort of drama around the, uh, naval ships, what they're called, they're these cool kind of stealth destroyers that were built in, I believe, Wisconsin. And, uh, they were the standard design from Fincantieri, which is an Italian defense company. And the U.S. Navy though, just couldn't help themselves as the U.S. Navy tends to not be able to, or the U.S. military, because we're the best. So we have to modify the crap out of everything. And really like what was a standard ship design, then all of a sudden they're like, We need to make it a little bit bigger because we need these capabilities. And before you know it, your standard ship was actually a totally custom ship. And so I could only imagine that with the very, very fast and rapid change of the specs of Golden Dome, I could see how there was probably, you know, a thousand death by a thousand cuts in terms of little tweaks and modifications that the US wants on FM-1 and FM-2. And again, SDA contract, the HALO contract. Was for 2 test satellites. So it seems hardly random that we have 2 aluminum-based satellites that are really kind of 2-offs, you know, one-offs by 2, before we get to our sort of core commercial birds, which are all composite, much lighter. So that's what I think is going on. And it's ironic because what the market views as sort of, oh, delay, delay, delay. It's like, well, what do you want to do? You want to call Pete Hegseth and be like, sorry, bro, uh, we're not making the changes. Uh, you can take your American flag-lined blazer and we're gonna meet guidance. And he'd be like, huh, that's interesting. And then he would drone you because that's evidently how he rolls. So of course we're going to be making these changes in the mods to the SDA satellites. And that's the type of thing we've correlated also with the Legato transaction. Uh, things started changing once we got that spectrum, and we can only guess why. And we think it had something to do with some calibration with mid-band stuff. So as we look at the various industry websites, we have, uh, some of the— what are these called? Um, some of the launch websites are showing again more data about Our launch schedule. And, you know, that's good. There, there, we, we know that there are launches. We know that they've contracted. We know that they're contracted initially with SpaceX, but then on a per-satellite basis, the majority are with New Glenn. And so we're going to be getting details of upcoming SpaceX launches because that information's kind of out there for that SpaceX community. They track boosters. That information is out there. And I think that's what we're really seeing is increased visibility about when we're going, and we're going very soon. And that's why the stock, I think, is starting to really rocket there. For whatever reason, the weakness in November was pretty peculiar, but now I think we're finally stepping into the breach where the market goes, okay, so we got a satellite on the pad. I think people know, I don't know anything that's not public, but I think as is often the case with this stock, the invisible hand tends to be pretty goddamn accurate. And so I suspect that people know about the status of the other 6 satellites that are ready to go. And those, you know, there's a lot of people visiting that facility. We're seeing posts about it and we'll get to that in a second. So there's a lot of people in that facility. Sometimes consultants go in, things like that. And I'm kind of a strong form market efficiency type of guy. And so the stock moving up like this starts to tell me like, okay, we're going to get some updates on launch pretty soon. And I was thinking about that today, like if I were Scott, so I have FM1 about to go off on Monday, maybe I just hold everything back after that. And so we'll get, you know, whatever people are going to do with the stock into launch. Usually they You know, rip it. And then usually there's a post-launch sort of hangover. That would be a great time to actually then give the update on the next launches and really, you know, keep people aware of how the progress is going. But also at that point, you'll have initial communications with the satellite and kind of ET will phone home and say, hey, you know, blah, blah, blah, things are good. And then I think if at that point, if I were the company, you know, I would feel really great about shipping those remaining satellites. I'm not sure they'll stage it like that because the other part of me thinks that they're just going to announce this tomorrow or Tuesday. We'll find out. So the next thing we have is this nice thread from Tech Innovations. And so I just put it out there because it's a nice thread for anyone that's new to the case. You know, the key points to highlight, $3.2 billion of cash and liquidity. That's a lot. Over a billion dollars of contracted revenue. That's a lot. You know, we haven't, launched a service yet. AT&T and Verizon are signed. That's great. Big relationship with Alphabet. Boy, that's getting exciting. Gemini, I've been playing around with that. Gemini is unbelievable. And so Google is really coming for the win. And so, you know, when you look at these stocks that will announce kind of like an NVIDIA partnership and then they, you know, double or triple, I think Google partnerships are where it's at, and we know that we're a big partner for them. They have a half a billion dollar— I'm just trusting this guy's numbers on this because I haven't redone that math myself, but half a billion dollar position in ASTS, which is great. And you think about where the future is going to be, Google seems like they're going to own it. And even Elon said this week, He's like, well, I'm not an investor, but I think Google is going to be worth a lot. And it already is. But when you think about AI data centers in space, where are these capabilities going to come from? And my strongest belief is that they're already working on that stuff, ASTS and Google. And maybe we'll find out, maybe we won't. The next we have, interestingly enough, we just kind of rewind through time is just a, a revisitation of the market. And so of all things, Viasat put out this market study on the D2D market, and it's super bullish. They did a lot of customer surveys and it shows that a lot of people are willing to pay quite a lot of money for this, especially in developing markets. Interestingly, they're willing to pay, you know, a big percent of their ARPU, which ends up being smaller absolute dollars because Indians, for example, are paying like $2 a month. But they're willing to add on like an extra dollar for this service. And it just showed how many people are out of service and the frequency of that. But also that just goes to the perception of the need, which is really the point I've made is there's real need, which I, for example, have. I live in a pretty developed part of the world and I don't have service easily once a day. And even on Thursday I was talking to Ant-Man when I was driving home and I was literally at the interpass on probably the world's busiest 2 freeways, or I don't know, can't handicap the world, but certainly in the US I would say maybe the most infamous freeway. And I didn't have cell phone service. So I'm thinking, this is ridiculous. And it could honestly have just been that there were just too many cars and that the towers were overwhelmed, which goes to another use case of this is being able to beam excess spectrum where you need it. And this is where shorts, I think, just don't really understand it. They're not dumb. Sometimes they have like a real big ax to grind and that's okay. And, but I don't ever want to call someone dumb. I can just say when you've really dwelled on a problem obsessively for 5 years, you tend to understand it better than someone who's done 15 seconds of work. And there's a lot of nuances, you know, for example, I don't think people really appreciate That one of the great— hold on a second, someone's snapping at me. Is that my daughter wants me for some reason. I don't think people really appreciate that you can add spectrum dynamically. So for example, if there's a massive traffic jam on a big freeway, and so all of a sudden you just actually have a lot of concentration of users in what would've been a normal beam, you can put another beam down on there. And then all of a sudden people don't have dropped calls, even if their phone says, oh, we have 4 bars of service. Why am I not connecting? You can add that capacity dynamically. And the stylized example, of course, is what AT&T would say. It's like, whoa, it's Super Bowl. Make sure you can send those videos to all your friends. You know, you have 60,000 people texting videos at the same time. You know, those towers are overwhelmed and ASTS is going to be able to drop 45 megahertz of Spectrum on that. Pretty cool. But let's go back to the Viasat study. So they do a lot of really great numbers and it's kind of ironies of ironies is they're really pumping this market after having previously said it didn't really exist. They're pumping this market and these guys had, they've given us their spectrum. That's really just the beautiful thing here is ASTS was so early and captured so many aspects of this market so quickly that even now would-be competitors are really just handcuffed. And so, well, ViaSat ultimately is the recipient of our Legato payments, but they don't have Legato spectrum. I mean, they own it, but we get to use it for the next 80 years. So it's very interesting to see these other satellite companies sort of begrudgingly coming out and talking about how awesome this market is. And our point is kind of, you know, Space Mom is like, well, we told you so. And here we are, you know, about to just dominate it. But Tanner does some nice math and, you know, it's, that's what's great about ASTS is you can just sort of do some back of the envelope math from time to time. And so if you just take the users of AT&T, Verizon, and Vodafone, you get to 630 million subs. And then if you just assume a 50% attach rate, which means that, you know, 1 out of every 2 of those subscribers pays for the service at $1 a month, pretty low, that's $3.8 billion a year. I did some math on a thread. I think it was last week where I was just doing some quick, quick math. Because Scott has said publicly that we're, you know, quote, we're building this company for tens of billions of dollars of revenue opportunity. And so when other satellite companies go, well, look, we don't really know what the market is like, so we're not going to invest a lot of CapEx into it. We're, you know, this, that, or the other, sort of to put it famously, they're not willing to put the whole ball of wax in there. You know, this is where Abel, you know, reached into his pocket, which was of course full of his ball of wax and whipped out his balls and threw them on the table and said, my balls are in. And he is in it to win it. And so they think that there's tens of billions of dollars in this market. So they're building big satellites, totally dedicated to doing that. So if it happens, they're there to receive it. And so then the question is, well, is there tens of billions of dollars of market? And I've done that math pretty, you know, many, many times and you can measure it multiple ways. You can measure effectively it on a spectrum reuse basis and say, well, how much data can these satellites produce? And then what's that going to be worth? I think that's the wrong way to do it because again, it's ignoring the idea of being able to oversell your capacity, which you will be able to do. And there's a lot of use cases that are going to have time of day differences and there's going to be things where Some people are going to be paying for capacity rights, and then some people are going to be paying for actual usage, things like that, way beyond the ability for any outsider to model in Excel right now. But you can start to work through it. And so Tanner's just simple math just shows, well, you know, just off this kind of silly assumption at a dollar a month, you know, $4 billion. And we know that's not even the half of it. So Exciting. I highly recommend people flip through that ViaSat report. You know, again, it's a market report by a company that previously had said there was no market, a company that in theory is our adversary, a company that we will be litigating with. Mark my words, there is going to be a nasty litigation between ASTS SpaceMobile and ViaSat as they litigate whether or not ASTS is bound To constrain its S-band operations in the U.S., and spoiler alert, they are not. So exciting stuff right there to read that. And again, going to the market, you know we have these shorts which come out, and they're great. I honestly love these guys. So we have this guy, Dr. Silver Schnaufer. I mean, good God, a name like that, you can only imagine his personality. It's like. Sour fizzy water, and Anpanman's texted me right now and said we're constrained to L-band operations, and that I don't think is right. The litigation actually was trying to tie them to both L-band and S-band, but look into that. But whatever, let's go back to the market. So these shorts coming out are you know just cling to and go well look at this look at these this group of investors that are pumping this stock and. You know, look at how little revenue this company currently has. Okay, that's silly. Um, but this is just going to be a service used by a tiny percentage of the population who really, you know, go on a hike. That's the traditional view of satellite phones. You know, that's the, the business person traveling, you know, to go visit their far-flung, you know, I always think of like Medallion. It's like, well, if you're going to go work at a cartel, it's a really great idea to have an Iridium phone. And that turned out to be like a big market for them. which gives rise to a whole host of other complex issues. And, you know, that's what the shorts think. And that's what's going to be the most exciting part of this thesis is, you know, you'll quickly see people concede that the technology works, but when the TAM ends up being 10 to 100 times larger than they think, it's the same type of thing that, you know, frankly, we saw with the internet and e-commerce back 20 years ago and then SaaS. This just happens over and over again. And the amount of work we've done on the market with ASTS tells us that this is really not for, you know, when I go out on a hike. And even when you do that math, actually, so in my pinned tweet, I did some sanity checks back when I wrote that document, just on like, how big is the RV market? How big are these little niche markets? And it was surprising actually how big many of these are. And you can get the FCC studies as well that show how large, you know, traditional MSS-based businesses are. They're actually pretty big. There's easily a billion dollars just in the US alone on what are actually really high friction, super expensive narrowband services. And even with that, it's still a lot of revenue and that's just in the US. And so Even in your worst of worst, worst, worst cases, you're looking at billions of dollars of revenue. And I think in your realistic case, you're looking at tens of billions, if not bigger. So that's pretty exciting. Meanwhile, then it's always good to, you know, like I said, people are going to visit these things. And so what do they see? There's people going with a bell in there to get, you know, frankly, due diligence sessions on the state of the satellites and the technology. I always try to think vicariously. I don't, it'd be cool to go to the facility, frankly. I would love to sign a satellite. I think that would be kind of fun, but I don't need to do that. And so, and even if I went, I don't know that I'm qualified to ask the right questions. Well, in fact, I know I'm not. And so I'm not an RF engineer. I'm a special situations analyst. And so it's great when I'm getting to read the conclusions Uh, the deputy executive director of operations and the chief technology officer of FirstNet and AT&T. And so Jeff Brachter said, wrapping up a great 2-day visit to Midland, Texas, 2 days. Okay. That's not just sort of like, hey, check it out and then leave. This is seminars that they went through and they did demonstrations.
[00:23:46] Speaker A: Yeah.
[00:23:47] Speaker B: Live calls and texts on the FirstNet network. So they're actually doing native testing. That's a big deal. They toured the labs and the production facilities and had great discussions with the engineers. That's great. Then they had a bunch of other stakeholders, personnel from other public safety departments. And, you know, the goods are there. That's exciting. And so you can only imagine though, what are they actually seeing? There's 6 satellites that we know of that are probably done. Were they signing them? I don't know. And then you have, uh, TJ Kennedy, who's the bigwig at FirstNet, so it was good to follow him. And he posted on LinkedIn— let's just see what he said, I forgot about it at this point. Oh, he was just quoting the Jeff Brachter, um, stuff. You can see the pictures, you know, they're checking their phones out. And again, this is a point that King Tut made quite a while ago, is ASTS is actually the only company that's ever really had extensive third-party validation of all of its claims. And we know actually now, cause we've, we've seen the forbidden videos and in the forbidden videos, we have the company actually very specifically say that they really like wearing black suits and they really don't want to wear orange suits and they're so hypersensitive to Of, you know, basically making false claims, that they've been adamant the whole time of making sure that their press releases are always joint with their partners to provide that third-party validation. And so it's not random, it's not a fluke, and it's something that we should duly consider when making judgments on this company, both long and short, is that unlike sort of the SpaceX videos where they clearly at edited the pictures. I mean, that was the most crazy thing. Not only would they show so-called text messages that were garbled and showing that it actually didn't work, but they wouldn't have third-party validation. Link, same thing. It's like a guy showing, you know, picture of 2 guys looking like super excited looking at their phone in a parking lot. And it's like, well, okay, but did the parking lot have normal terrestrial service? Like, you know, what did you prove, guys? Your phone worked? And ASTS, we've tracked this stuff out to offshore Maui and, you know, had confusing FCC filings where the FCC is like, hey guys, like, did you mess up this filing? It looks like you're actually testing in the middle of the ocean and that can't be right. And, and so we've, you know, really proven this 7 ways till Sunday, but having the extensive third-party validation is something that's always given me a, a A lot of comfort, and that's different when when shorts throw something out. They're like, "Whoa, so did Nikola." It's not the same, and that was you know basically GM having a freakout moment, feeling like they needed to be cool and validating you know quote unquote validating things just to be the cool kids versus very rigorous testing with hundreds of partner engineers on partner core systems and technology, and then very deliberately having methodical joint press releases. and media going out to the same effect. This is a different game. And a lot of us have met those executives, like the AT&T teams, uh, the Department of Defense teams, the Blue Origin teams, and the SpaceX teams, frankly, showed up at, um, ASTS launches as well, obviously, because they were the launcher. And so you meet these people and they all will say, this is real. So then we think about, um, other opportunities. And what's interesting is just the market signal on SpaceX. And so I am blown away by the SpaceX valuation's $800 billion. I don't know their numbers, so who am I to say if that's too high and too low? That just seems to be the market answer right now. And so if we just take it at face value, what's the most interesting to me is if you take a step back, and I have a bias here, I mean, it doesn't take a rocket scientist to say that I'm pretty positive on ASTS, but if I look at SpaceX, I'd say, well, hold on. Right now you're on the cusp of real competition with Blue Origin and other launch vehicles. Sure, no one can match Falcon 9 right now. But you're on seemingly a cusp of a lot of capacity coming on, and these are high fixed cost businesses. And so launch costs can and should go down quite a lot. And that's just, you know, decremental margins for SpaceX. The same time, Starship, despite Elon saying, hey, we met a lot of milestones, that's why we're stepping the valuation, shit don't work. And so I don't know how much Starship is You know, really driving a valuation when they can't put stuff in orbit from what I can tell. And Blue Origin just hits a knockoff home run. And then you have Starlink, which is seemingly doing great, but lots of competition coming. I was explaining to someone, I said, well, aren't you worried about Kuiper? And why? I'm like, have you? And I said, well, they have a massive distribution advantage. And they went, what do you mean? It was like, have you heard of amazon.com? They know how to sell stuff. So almost every American, probably almost every American, but any American with real spending power probably has Prime account and they're going to be able to give you a lot of inducements, I think, to do Kypher when they want to bring that fight. And so there's just a lot of competition coming and sometimes the market though just misses that. You know, it will kind of peak its valuation right when the storm clouds are kind of around the curve of the earth, you know, who knows? But it does, you know, I'm not mad at it. The $800 billion valuation for SpaceX is great news for us. It's showing everyone on Wall Street is going to have FOMO on space because most people missed it. And there's very few ways to get involved on this trend. There's, you know, not a lot of great companies and people are going to look at, well, what's really driving these valuations? And it's Actual economic use cases in space. Launch is a means to do something useful in space, but itself it is not useful. What is launch? Launch is the ability to get weight up. Unless that weight is useful, there's no point in going up. So therefore, you know, kind of having a reductionist view of this, the weight is what justifies the up. Therefore, who's doing things with weight that are good? And right now, the things with weight that are good are telecom services. The next things with weight that are good are going to be government defense applications. That's obviously coming with Golden Dome. And then down the pike, some other things with, with weight that are good seemingly, and I dismissed this in a big way early on, is AI data centers in space. This definitely hit the threshold of When I first heard about it, I scoffed at it. When I look back at my career, whenever I hear of something and scoff at it, this is sort of my, like, I'm too cool for school kind of attitude, which I've learned to overrun, by the way. But usually that's a sign of being too dismissive and Wall Street tends to be like that. So I've been thinking a lot more about this AI data center and space thing because for me, I just, I had a hard time understanding why the math would work. I mean, putting weight in space is super expensive. And so what's the real benefit of being in space? It's cold.
[00:31:21] Speaker A: Okay.
[00:31:22] Speaker B: You have solar, but you also have solar down here. So I don't really know what the net gain in solar efficiency is. That's something I have to work on. But it's, you know, if you're in front of the meter, solar's also free down here. You have to pay for the panels, And that's the same as in space. So I'm, I listened to the StarCloud CEO, um, walk through his math and I mean, guys are doing math that seems to make sense. He entirely relies on Starship working, but then you have to, you have to go, well, who, who's really solved the critical path items for AI data centers in space to work if it's going to work? Well, what is that really going to be about? It's going to be about Power generation, just like frankly ASTS's businesses. Being in the RF business is really about can you generate a lot of electricity? And who can generate the most electricity in space? ASTS Space Mobile. We believe they can do about 120 kilowatts. And now what I don't know is, is a megawatt in space, quote unquote, worth X amount of megawatts on the ground? because you don't have cooling or, you know, there's other avoided costs or things like that. I don't know that answer. That's something I need to research, but I'm of the belief, because I get little hints here and there. I know that ASTS is a creative company. We know because of the forbidden videos that they're doing things, um, far beyond RF. They don't talk about it except in the forbidden videos. Because I think they're trying not to look pumpy. They're a, you know, a young pre-revenue company and trying not to look like they're all over the place. So I think that their corporate view on communication is keep it simple, keep it consistent. We have our skunkworks, but like, we'll talk about that later. We don't want to quote unquote lose credibility in the market by having people think we're pivoting. We already saw the blowback when they quote pivoted by buying Legato, which was probably one of the world's great M&A investments. You know, time will tell, but sure looks like they got Spectrum for 10 cents on the dollar. And so I think that they, they know what they have. They know how to deconstruct the elements of what they have. They have power generation, they have heat diffusion, they have beamforming, and they have a mechanism by which they can put a lot of real estate in space. That's the unfurling. And then I'm sure there's some other key components I'm missing. But it's a very logical extension that instead of having the antenna element on the Earth side of the satellite, you just put GPUs. And so if the market wants to go there, which it seemingly does, market seems like it is really focused on space-based AI, which God bless it. I don't think it's very long until people realize like, this is actually the vessel for it. And what's interesting is, again, who our partners are. And so largest telecom companies in the world are going to want a piece of this. This is a great way to expand their business. And then we have Google. And so, you know, we got the guy as our partner and that guy doesn't have its own captive space company. I guess, you know, they do have an investment in SpaceX and they have a really big investment in AST SpaceMobile, which is Now looking pretty smart, but these big further out opportunities really go into our non-communication use cases. And I think you really do need to think of ASTS as a platform of space-based power generation. And then it's what you do with that power is defines the you know really obviously the commercial application of how you monetize that power. But it's like the people in Iceland. You know, I think of Iceland as the sun-facing side of our satellite. You know, they have a lot of cheap electricity. And then the way to export electricity is to make aluminum. In space, if you have a lot of electricity, the way to export electricity right now is RF communications and telecom. And it can be obviously then things like Position, navigation, and tracking, things like that. But then it looks like the next application that could could potentially make economic sense is AI data centers, and then that's how again you export electricity from space. Interesting concept if people want to stew on that. Another thing that really caught my attention this week is John Slamecka. Joined as an executive advisor to Abel. John has a ridiculous background, and so he was the president of AT&T Business International. He was the president of AT&T Europe, Middle East, and Africa, and Latin America. This is an important guy. And so you look at the people that are surrounding Abel. the advisors he's going to have, quite incredible when you think about the company's ability to get in the room. And this is something I've seen firsthand in my career where I have a day job and we'll work with companies with really cool technologies, but getting partners and clients, getting in the boardroom can be really hard. And so a lot of what happens is then looking in your network and trying to recruit or get ins to get in front of the right people and the decision makers. And it's hard. You need to try to get some of those consularies who, you know, either know the regulators, and that's a huge deal sometimes. You know, it's very hard to find people that are credible enough to go walk into the Treasury Department and, you know, make it happen, or walk into the executive office of, you know, a large bank. You just can't waltz in there in a hoodie. And so Abel is having these people that is just increasingly giving the company more credibility when it comes to regulators and governments and MNOs. It's very exciting to see that continue to happen. And it just also speaks to the size of the opportunity because a lot of these people are very busy. And so they're not going to do something just for, you know, a couple shekels. They're going to want some equity grants presumably, and they want those to count. And that's, that's pretty exciting. So next we also then have a tweet from Kevin and he's just giving us an article that was from the FCC Technology Advisory Council member. And it's an article in NxTech called The New High Ground: How the Race for Satellite 5G Will Decide Who Sets the Rules for 6G. And this is just really about the strategic nature of space and telecom. And it actually specifically lists ASTS as a company that's important for national security. And I think that's really going to be the story of 2026 is ASTS is going to be viewed by the market as a company that cannot fail. And so it's going to be viewed as vital for national security, both for its involvement in our defense applications, But then also for first responders and disaster relief. And then on top of that, obviously all the connectivity issues in terms of bringing broadband to everyone in the US. So great place to be, certainly an early story so far. And then we have, you know, what has to happen for those things to be true? Well, FCC approval. And we have a lot of things happening with the FCC. And so this was a big week. Where we had just more filings talking about expeditious grant of SES applications, a bunch of STAs filed. Kasey's really followed all of 'em. At this point, I've kind of just like, okay, there's a lot of these and they're all kind of the same and they're good. I don't know that there's a lot of incremental importance from an investor's point of view. But sometimes there can be some neat nuggets on the tech and things like that, which we extract. But importantly, we had the closing of the SCS comments. And so that is our front haul application. That's really what connects the satellite to your phone. The SCS application is really the final domino for US regulatory approval. It will be pretty important. It's going to, it's going to be approved. So that, that isn't really a risk, but But it will still be exciting when it happens. And what's interesting about this is the comment period closed on Friday the 5th. And my understanding is, uh, ASTS was to wait to file its legato FCC application until the SCS application closed for comment. So we could see on Monday or Tuesday. A filing of the Legato FCC application, which true to form with ASTS could end up maybe being a pretty positive trigger because it's going to bring attention back on this 45 megahertz of spectrum we have. And then the NAV bros are going to come back and go, whoa, hold on. The company market cap might be worth just Legato spectrum.
[00:40:50] Speaker A: Yeah.
[00:40:51] Speaker B: And then we have all this other stuff. And so the NAV bros are kind of fun because they, they give us the support. And also, I think, you know, the regular bros like me have done the other math of not sort of the traditional spectrum NAV, which I think is very conservative because people aren't paying that price for it to be worth that value. They're paying that price to get multiples of value creation on it. And when I've done the Legato math of really what it looks like to monetize 45 megahertz of spectrum. I posted that before and it's a big number based on the spectrum reuse factor, the spectral efficiency and the dollars per gigabyte sold, but it's very exciting. And so hopefully this FCC stuff really accelerates over, you know, call it the next 2 months, but then the next docket we're going to have to track is really the Legato docket and that could That could be as soon as this week. So as I mentioned before, the testing activity has really surged and Katzi did a really nice post on actually how to find all this stuff. It's really kind of a labyrinth of different search features, but he generously showed people how to do it because that's the type of person he is. And we also had this interesting little response in the SEC docket by Jennifer Manor, who In quotes said, "Expeditious grant on the modification application will promote the public interest by helping build a quote golden age of communications." What else is golden? Well, the next topic we have is a dome, which is golden. And so at tough for you, he's a tough guy. Look at that profile pic. Wouldn't want to mess with this guy. Unlike me, it's like a stupid kook, but he's really making this point that the batches that we're seeing are pretty important. And so we've already had the first batch awarded and it was a bunch of sort of commodity stuff and services. And so those are the guys that were sort of out the door first. The second batch are much more complex systems and include spacecrafts and scene production integration contractors and Are more complex. As we're learning more about this, we believe, and there's more information coming out in these defense articles, the testing and evaluation is also being done with a different form of risk transfer where the DOW is making contractors actually take more of this stuff on balance sheet initially to show it working and things like that. And what I believe to be true is that ASTS is competing for multiple parts of the project. And some are much, much bigger than others. And so I think it's going to be potentially a longer process. I don't know when we'll start to get details. So it might be a long process, but a short process in terms of when we actually have visibility, but it's starting to really heat up. And then the article I, I quoted, uh, it's a Space News article. They said MDA added that it must complete, quote, discussions with vendors before soliciting any firm requirements. And then there's all sorts of different contracting methodologies they're doing, which are a little bit beyond my ability to pare it back to everyone. So you can read the article for yourself and your takeaways might be the same as mine, which are they are shifting some of the initial risks so that there's not massive early upfront payments to vendors, but really do it on your own dime, show it to us, and then we'll give you the, we'll give you the loot. Which explains, as we've talked about and speculated before, is the reason presumably why ASTS really grabbed that $1.15 billion of convertible bonds when they could, because it put them in a position to really pursue all, and especially the biggest programs within Golden Dome. That's what my belief is. And then we separately just have job postings. And so we have AST SpaceMobile is seeking to Senior Principal SATCOM RAN Architect to lead integration design of next-generation tactical communication systems. And so we already know this, this is not new that ASTS is deeply intertwined with defense applications. There's the ASTS defense platform being sold into the government, not only by ourselves as our own prime contractor, but by multiple other prime contractor partners, Fairfield being a big one. And so it's just exciting to keep on seeing this happen. And these hires show that it's happening on a good pace. And that's going to be an orthogonal business opportunity. That's not about dead spots. That's not about the random Marines from Camp Pendleton going on a hike. Oh, we're in a dead spot. No, they're going to have these things in the pockets of all of the Marines. And we'll find out what that ARPU is, but it could be a big number. And I think a lot of us were actually talking about that movie the other day called House of Dynamite, which, you know, whatever, fine for airplane movie, which is when I watched it. But it's, you know, it's a classic. It's, oh, Mr. President, I have crucial information about the psychology of the Russian Prime Minister. And it's like, where the hell is he? Why can't I hear this guy? Mr. President, can you hear me now? You know, cell phone doesn't work. And then even in that movie, they had, uh, The president, Idris, I can't remember his last name, um, you know, pulling out his Iridium sat phone on the helicopter. In all of these movies, it's, it's always about, can people reach each other? Is there clear communication? And usually there's not because that's what creates drama of, you know, oh my gosh, what a nail-biter. They weren't able to communicate clearly and, you know, we started World War III. And so the government is going to have all this stuff. And it, I mean, frankly, they got into the ground-based interceptors as well of the importance of having a golden dome system working. And you watch that movie and you really go, okay, I'm pretty cool if they want to invest some additional tax dollars to make sure I don't have a nuclear weapon dropped on my head. It seems like something that I'll never really feel the cost of it, but I'll hopefully also never feel the benefit of it. But if I do, it will be very valuable. And I think that's how the Pentagon's thinking right now. Now we also had, again, more confirmation. And so at Mobile World Congress in Doha, which is in the Middle East, they had the vice president of global services at Nokia talk about their partnership with AST SpaceMobile. And Kevin did us all a nice favor, as he always does, of taking out the key points so you don't have to watch The whole 2-hour thing. And so he talks about having a proven broadband with ASTS. Okay, that's more than intermittent texting. He emphasizes the importance of low latency. So that's just the speed and the usefulness of it. And that's because of LEO as opposed to systems that are based in GEO. He sees future regenerative architecture use cases despite starting with a transparent architecture with ASTS. I'm not sure I totally understand the implications of that, but surely it means something. And he talked about the speeds. And so they tested at 15 megabits per second and 20 megabits per second in a 5 megahertz channel. So divide those 2 numbers and that's the spectral efficiency. So 4 is really good. Um, 3 is also really good. And it just shows that they've been able to constantly improve the, the spectral efficiency, which allows the, um, spectrum to be used to greater effect. And they go on to just talk about the size of planning to launch 300 satellites globally. And, you know, again, it's good to be noticed and it's good to be talked about. We talked again this week. I was certainly talking a lot with Anpanman about this, but then he did a Spaces about AI data centers, which you've already touched upon. I also included the link for his Spaces there. And then importantly, this is all about just getting Catsy to go crazy on a topic. And so basically we just want to slam Catsy's face in a bowl of catnip so that he'll then take on a new project to dig into. And so now we've seen this guy's work being right on things like PMT, Radar, all these other applications. We want him to help us with the math, frankly, on AI data centers. And so now he's engaged on that. I'm looking forward to some really great threads by him to help us all understand it. We've been doing some math with him behind the scenes, just on things of how the spacing of the elements currently work, just to understand how the spacing of AI chips would work on, on the arrays and things like that. There's a lot to learn. And then we're going back through the patents as well. And so the next link is just about the ASTS patent trove. And we were looking into the heat dissipation and things like that. So interestingly enough, on the StarCloud, which is a VC-backed company, they're designing their system to just work in SSO. What is SSO? Sun synchronous orbit. So that means that the satellite is just always in the sun. So, you know, when you think about Earth being half dark, half light, These satellites will fly right on that, the light part.
[00:50:13] Speaker A: Why?
[00:50:14] Speaker B: They're trying to avoid thermal change and thermal expansion. And so when the satellite goes in and out of the sun, it goes from really, really hot to really, really cold. And when you do that, things break unless you design for them. So to design for that is super expensive and also super hard. And ASTS has done that. And so you're dealing with a lot of crazy thermal dynamics. And that's frankly one of the things as to why people thought ASTS was going to break up in space. People thought that the thermal challenges were going to be way, way too hard for them to solve. And that's why the experts, you know, years ago thought this company would be doomed. And they obviously showed that they can do it. And so it gets, it gets pretty interesting because this is some of my questioning for Katzi is presumably You're going to want your AI data center to not just be in the sun because time of use, people are going to also be using this stuff other parts and you have to have a view of a ground station, presumably otherwise you start, you know, to have data sovereignty issues, things like that. So I have a lot of questions and we're going to start to piece it together. I won't blabber on more about that right now because it's beyond my depth, but we're starting to really just isolate. Some of the key questions we want to ask, some of the known technical features, and then put together some basic math. But there's a, there's a lot of things and people on this call, I know some people are involved in AI data center development and things like that and have a lot of expertise. And so it'd be great if you could just start to throw some of the knowledge you have on some of these issues out there so that we can start to put it all together. And that this is going to be a really great example of where the space mob can use our brains. The company issues to management. So that's a normal course of business for guys like Scott and Andrew and other key executives. The vast majority of their compensation are their annual equity grants. For example, I was going through the proxy, Scott makes $250,000 a year base salary, Not to poo-poo that, but, you know, he's a talented executive that would be making a lot of cash at a bank or something like that. And so those RSUs, you know, he's going to get, you know, 150,000 units a year right now, and then he's going to sell some of those each year because that's actually how he gets paid. And so guys, interestingly enough, at ASTS are really looking at this as an investment vehicle. And so every year their salary, they're basically getting ASTS stock is basically the vast majority of her compensation, and they're very bullish on it. And so they think they're going to be making multiples every year on what is their notional comp. And this is just an example of that. The change this year was Abel actually got a grant, and this is the first time he's gotten paid by the company, which is, you know, high time that he does. He's really developed a lot of amazing stuff despite the odds, and he's been a real you know, sun lord, really showing that great leaders eat last. And, you know, we all appreciate all his efforts. We had an interesting topic come up again this week. And so Kevin Colton was, I think, kind of reflecting on something I said, if I remember correctly, and he's doing some math just about the sustainability of SpaceX with how many satellites they have up in orbit and then what their deorbit profile looks like, and then tying that to just the amount of pollutants that go into the atmosphere from reentry versus ASTS. I've always thought that this would matter. And so take, for example, you know, when oil was first relevant, and if you think about what America looked like kind of in the late 1800s and the early 1900s, I'm always blown away when I see pictures of Los Angeles. And the whole place was just littered with derricks and never mind places like Texas, which were just beyond comprehension and Pennsylvania. And so it was sort of like extract, extract, extract. It was early days. And then people wised up and were like, maybe we shouldn't literally have oil derricks everywhere. Maybe there's a different way to do this with new technology or be more efficient with it. And I think that's what's going to happen with space. I think space just moves so fast that They just weren't able to really keep up with it. And Elon just really went so far ahead of what regulators could have conceived that he just spammed the orbits. I think there's going to have to be a change with that and it will catch up with him at some point. And I think ASTS has been very conscientious about how they've thought about that. Very few satellites that are very big. easier to manage, much lower decay factor because they can fly at a higher orbit because they actually have good beamforming. And so that's the issue of flying at 700 kilometers versus SpaceX flying at 300 kilometers. It's nonlinear relationship to the time to deorbit. This type of stuff, I think, will matter from a regulatory and environmental perspective. It already will matter from an economic perspective. ASTS should have higher free cash flow because of these dynamics because they're going to have less maintenance CapEx. But that's a quote unquote issue or problem for another day. And then the big thing this week was just wild. SpaceX filed a trademark for Starlink Mobile. And then this article, somehow no one really knows why, somehow this information was distributed far and wide to the world. And so everyone in the world Found out about it. I don't know who could have spread all this information. Um, SpaceX filed it and then one must ask why. So as part of this whole thing of him pumping SpaceX valuation, which again, I have no problem with, but he needs to show TAM. He needs to show these exciting stories so people can dream a dream. We've got Mars, we've got Starlink. Um, we've got Starship. I don't know what else. I forget the pitch. But now he's like, we're going to take on telecoms and also D2C market is massive. And that's why we have all the spectrum. So ironically, he's actually driving a ton of value expectations on D2C, but I think he knows that he has a big problem with D2C, never mind tech. I think he has a commercial problem. He's not going to be able to go through the MNO partners. That's going to be a wall for him. And so there's, there's not a way for him to access the customer. Uh, at least there's not a cheap way. And this has always been my contention is people don't sit down and think about the various barriers to entry and the various barriers to market. And I don't think that ASTS's super wholesale model with the MNOs is totally appreciated by people because I think SpaceX bros, God bless their heart, are just of the view like, Papa Elon said, so it will be. And I just don't think they're thinking of the nuances that Papa Elon has done well where he can go direct to the consumer and vertically integrate. And maybe he will start his own telecom company. I mean, I actually wouldn't put it past him, but that's an expensive proposition to do the whole stack. And in the meantime, and maybe he can do it, I don't know. But I do know it's going to be super expensive to do and take forever. And never mind his tech doesn't work, but so it's going to be a crappy service. So he has to solve a lot of problems before the service is actually good enough to go out there. But in the meantime, he's just totally frozen out any M&O from wanting to work with him, which was already the case. But do they need a reminder? Why in the world would they work with this guy and help him improve his technology and get cash flow so they can turn turn around and see a SpaceX phone. They're not going to do it. And it's the same thing, which wasn't in the weekly, but over the weekend, obviously Elon went crazy on the EU. And I know we have a lot of Europeans in Space Moms. I don't know. And I'm not a European expert, so I'm not going to pretend to be, but I kind of side with Elon on this. I'm like, yeah, Europe seems kind of overregulated. And his joke of, you know, there's a government for governments is like not lost. And I guess I was thinking about, I'm like, well, we have the federal government and we have state governments, but you also have provincial governments in Europe. So you really have governments for governments for governments. That aside, the EU probably doesn't appreciate what he's saying about the EU. And so the bureaucrats are probably pretty pissed off when he's going after the bureaucrats, which is ironically something that is different from when he went after Trump with the big beautiful bill. He was going against Trump because, you know, he thought he was right and maybe he is, but he certainly was not doing Trump's bidding in that moment, which was very bad for him. Here, by attacking the EU, he is doing Trump's bidding. And so this is actually what's so interesting is no one's going to put the brakes on him. He's not going to get slapped around and disinvited from a dinner or have Trump return the Tesla. He's going to be having J.D. Vance and Marco Rubio and Trump being like, rah-rah, Papa Elon. So what's going to happen to SAFKow? I mean, this is just honestly June all over again, where if people remember in May and June, a big part of that revaluation in my view was, yeah, sure, some expectations on FM1, FM2. I think the market invisible hand said, There was one person on earth that could slow Elon down, and that was Donald Trump. And Elon decided to piss that one person on earth off. And that caused us to have a permanent change in our opportunity at ASTS vis-à-vis government business, national importance, and general strategic perception. And now I think we're having round 2 of that. in what's actually a bigger market, the European Union. So it's, I don't know, is it better to be lucky or smart?
[01:00:33] Speaker A: Both.
[01:00:33] Speaker B: But I think the space mom once again just sort of is in the right place of a competitor that is erratic and love him or hate him, no one made him do this. And so he's basically just guaranteeing the EU is Not going to use SpaceX for self-defense or anything, and we already have Satco now a German-based company ready and willing to to serve. And so that I think is going to have a material impact in our future there. Again, not a day goes by where the story doesn't seemingly get better. And then we also have Blue Origin, which I I continue to think of ASTS as. Really kind of a sum of the part investment with Blue Origin. And I'm going to say that until Blue Origin has a misstep, and I'm going to walk that back entirely and pretend I never said it. But when you think about how these companies are acting together, they, I think, see this mutually beneficial relationship where Blue Origin has by far the best looking rocket. And as we all know, in defense applications, whatever looks the coolest is therefore the best. And the Blue Origin rocket, I'm just looking at a picture of it now, is so beautiful and it's so big and so awesome and it works. And it's a great partnership because Bezos needs weight. Again, going up needs to be for a purpose. You only go up because the weight needs to go up. And ASTS has a lot of weight that needs to go up and therefore it gives Blue Origin purpose to do things. And it seems like the U.S. government has taken stock that these 2 things are also a little bit of a package deal, not exclusive, but Blue Origin working all of a sudden changes some of the calculations, I think, for the Department of War. And Blue Origin seems like it's really firing up its cadence. And that's exciting to see. And I personally just, nevermind my, you know, understanding of how Blue Origin is important for AST SpaceMobile. I'm super excited to see them really shake out the launch cadence and continuing to prove this vehicle. I mean, I have to believe at some point Blue Origin has a failed launch, but knock on wood, hopefully not for many, many years to come. And it's exciting. We're really closely tracking New Glenn 3, trying to get a read on what's happening there. And so then just the last thing is, it's a holiday season. I just put a plug in there for Redrum. I know I got my daughter a SpaceMobile necklace for Christmas and I'm going to make her wear it because I remind her she's an ASTS shareholder directly. And I tried to explain to my kids, you know, what that means. Like, what's a share? Like, you're a boss. But then I explained to them, you're actually a non-voting boss because Abella has super voting shares. So you really have an economic interest, but your vote doesn't count, which is an interesting message to send to young children. But Um, then I was with Danny. I did some shopping on the official ASTS Space Mobile website and then did some shopping on the Redrum website and, um, reposted that link too, 'cause he's made some super cool products and I know I value his feedback or his, uh, reception feedback when you want some custom stuff made too. That's all I have for you this week. Um, let's hope we have some cool announcements this week and then stay tuned for when we do our kind of FM1 launchathon, which will be pretty fun. And if anyone has real expert insight on some of these math issues with AI data centers in space, if you could DM me or, you know, the usual suspects just to say we can start to figure this out, I wouldn't mind having some of this in the DD document update. It doesn't have to be timely, but It's something I want to get a little bit smart on, uh, smarter on. So if anyone has expertise there, I'm always looking to incorporate, and I'll give full attribution, of course, for anyone's work because we're just trying to collect it all. Have a great night.
[01:04:28] Speaker A: Bye. Thanks for listening to the AST Space Mobile Podcast. 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. To catch all the latest news about AST SpaceMobile, make sure to subscribe. Thanks again, and I'll see you next time. We're doing something very, very big, and I think with this technology we can really affect billion lives. AST SpaceMobile is the only company that has proven technology to deliver cellular mobile 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 NMOs.
[01:05:35] Speaker B: Mmm, waffles.