Anpanman - Pentagon Over a Barrel: Why the DoD is Pivoting to AST SpaceMobile

[00:00:07] Speaker A: This is the AST SpaceMobile Podcast.
[00:00:11] 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 C: Hey everyone, thanks for joining. What, what an amazing day, amazing week. It's going to be an amazing few weeks, few months, rest of the year. But, uh, but yeah, thanks for joining. Uh, I, I was on a space with Dagnam PI— what a cool name— uh, talking about AST SpaceMobile and, and defense. Um, and I didn't— I did talk about this Reuters article briefly, but I, I did want to go into more detail. But, um, Yeah, thanks for joining. I wanted to cover a few topics about AST and hope everyone had a great long weekend. I know usually on days where the market's closed, I feel pretty good about taking time off and spending it with family, which is what I did this past week, but then— or this past long weekend. But then given all the news that kind of came out around AST and And then seeing the stock prices of the space companies overnight, I was very anxious. I couldn't actually sleep because I got to bed late because Cook unfortunately has taken up an interest in hockey. And so his base went till, I guess it was like 1:00 AM. And then I tried to go to bed and because I'd stayed up too late, it was hard to go to bed. So I just got up at, I think I tried to go to bed at 1:30 and I got up at 4:30 or so. And I just had some coffee and I had a lot of things going on in my mind. And so I'm operating on very little sleep, which I'm sure plenty of you, that probably happens to you as well. I remember when I was working in the hedge fund industry, if there was groundbreaking news and it was a positive for my portfolio, it would be hard to sleep overnight. And so I would just wake up early and go into the office, um, because just laying in bed and just sitting there, um, really didn't do it for me. So, um, so yeah, I kind of went through that, but now I'm operating on, uh, adrenaline. So, um, but yeah, there's a lot to be excited about. So I, I did want to talk about, uh— oh, and by the way, like, if you have questions or comments, feel free to, uh, drop it down, uh, in the, in the, in the space, the chat, um, or the comments below, and I'll try to get to them. any questions or, or things that you want to say. But anyway, so, um, big piece of news that came out today from Reuters. Obviously you've got to take, uh, any reporting from mainstream media with a grain of salt, but, um, this morning there was this article from Reuters talking about how the Pentagon is sparring with SpaceX over Starlink price. Uh, it appears that Starlink, um, is— it's hiking the price for using their terminals. Um, so Starlink has kind of 2 vectors that they're providing service that are at least are is being discussed in this article. One is the communications connectivity for drones. In particular, the US has these new kamikaze drones, which have a little Starlink dish terminal on top of it, which then communicates with the Starlink network. It appears that originally the— this is kind of crazy— the military was paying $5,000 per terminal in order to use them. Whereas now, I guess Starlink is trying to push them to pay somewhere on the order of $25,000 to $30,000 per unit, which is insane. Which, you know, that kind of highlights the pickle that the US government is in right now, where if you only have one contractor that you're working with and they're a sole source, you know, you can only get the service from one guy, then they can dictate price. And that's what SpaceX SpaceX is doing right now. Um, they basically have— in their article, there's this person who covers the industry who says that SpaceX has the Pentagon over a barrel, which is true because there's no real alternatives. And so this just kind of highlights the, the opportunity for ASD Space Mobile where, um, you know, we can provide communications to those drones. And instead of charging $25,000 or whatever it is, um, you know, $30,000, um, we could charge them a much more reasonable fee. And because it's 3G, VPP compatible, you wouldn't need these large dishes on the drone in order to communicate with them. You actually can use a very small receiver because we're using low-band spectrum to communicate. And so if you can imagine, and in this article it talks about, you know, the Pentagon looking for alternatives, that's— this is probably a conversation that the Pentagon and the Department of Defense is having with AST SpaceMobile right now. But this article, you know, this just highlights that the Pentagon is looking for alternatives. And that's why, for example, we've got 13 different military contracts, whether that's with the DIU, SDA, Department of War, all these different acronyms. But yeah, whether it's providing communications to the warfighter, and so, you know, We saw, for example, this device that Anduril came out with last week that can communicate over 4G LTE. That's the primary communications method. And so that could be, for example, for a unit within a specified area, there might be a private network that they send out LTE signals to communicate with all these soldiers, or more importantly, from satellite. And so there's only one satellite provider that can do 4G LTE in low band, which is what these radios are gonna use. And that's AST SpaceMobile, which, you know, will we see a PR, you know, touting that Anduril's working with AST in the future? Who knows? But I wouldn't be surprised if that happens in the coming months. But that just kind of underscores one of the use cases that we have, which is, you know, connecting battlefield assets, whether that's people, drones, you know, tanks, what have you. And then of course, you know, that includes aircraft as well. But aside from that, in this article, it talks about how the Pentagon is leveraging 2 networks. So it's not just Starlink, the commercial side, and of course Starlink kind of pushed back on the potential use of the commercial constellation for military use. And so they do have this other constellation, which we don't really know much about, which is called Starshield. And that's a government shell, right? And so I think it's important to highlight that because I know when I had tweeted this and I'd posted on Reddit, there were some people who kind of felt uneasy about the idea of the commercial constellation being used for military purposes. And I would, I guess I would point out a few things. One, the commercial constellation is going to have some military use, uh, for communications at a minimum, but then also, you know, for some of these, um, other applications, whether it's, it's sensing, it's radar, PNT, especially for PNT backup GPS. you could totally leverage the commercial constellation for that. But I think when it comes to secure communications, and for example, if other countries or MNOs are uncomfortable with that, then I do think the whole idea, and Scott has talked about this now, I guess for 3 quarters, is this idea of actually putting forward a government shell, right? A constellation that's solely focused on government applications. And so I think The idea of going from this cadence of producing 6 satellites a month to up to 12 satellites a month, that additional capacity of call it 4 to 5, maybe 6 satellites a month, that would actually go towards building this government shell. So the equivalent of Starshield, but maybe we always joked around that ASC, the government shell will be called, instead of Bluebirds, it'll be called Blackbirds. But that whole idea actually exists, right? Because the, for example, the FM1 and FM2 satellites, which were, from what we understand, based off our own due diligence, you know, the company hasn't said anything, but, uh, we believe that those were SDA satellites. And so they were probably prototypes for what will become part of a government shell. And I did ask the company once about, you know, hey, do we need to replace FM2? Like, should you just build another one and go send it up in space? And And the feedback was that having just one satellite was good enough. FM-2 is actually a backup to FM-1. But then building that particular satellite now would be irrelevant because they've moved on to the next design. And so that's a little nugget. Next design meaning whatever they're doing for the government, they're working on the next one. And so that's pretty exciting. But yeah, this article, I think the other really important element of it is that the Pentagon specifically is also asking and trying to work with Starlink. And of course, they're most likely talking with this AAC SpaceMobile about providing direct-to-cell connectivity to Iranians in order to, you know, Iranian civilians, in order to bypass their Iranian government. And so we've talked about this idea in the past where if you had the ability of a satellite to beam down internet connectivity directly to mobile phones, and more importantly, and this is not true for Starlink, but it's true for AST, to unmodified phones. So existing phones, older phones, then this is a huge application, right, for the US government. So if you could imagine trying to communicate with civilians that are perhaps trying to organize, or, you know, there could be an uprising, whether that's in Venezuela or Iran or in the future, maybe North Korea, this is a very, very powerful asset, right? Because then not only do you have this ability to kind of bring information flow and the ability for people to organize together and they get access to the internet, but yeah, that's like one of the fastest ways to get to liberating a country is giving its citizens access to information, right? And so how that would work, there are some questions around that, I think, Obviously, in that context, ASE satellites are not going to be integrated into the Iranian, whatever Iranian MNO core. It would probably be something that, you know, I'm just making stuff up here, but if you had a friendly country nearby, then they could serve as a network core and you would then transmit internet connectivity to phones down on the ground. Now, Those phones would have to— well, I guess there could be some interesting ways to get around it. Like you could kind of spoof the network and pretend, make it look like you're the MNO, the local MNO, and so the phone would then talk to the satellite. But I'm sure there's like a bunch of different ways you could pull this off. You could even drop like SIM cards to people on the ground and then they could stick it into their phone. But one of the cool things is that once you do this, it's not as obvious, right? Like people who have phones, They're walking around with phones in their pocket, and there's nothing that looks extraordinary about that. Whereas in previous cases in Iran, people who were trying to set up these Starlink dishes, they would get caught, right? They would get caught by the authorities and then face pretty severe punishment. And so one of the cool covert things about this is that you can enable mobile phones, which everybody in most countries have, and then it would be hard for the authorities to figure out like who's who's accessing this other network. And part of that too is that you would take down the— in Iran, you would actually take down the local network and then you would just only allow people to connect to this, I mean, whatever you want to call it, like the freedom network, right? That's being provided by AST or Starlink. But yeah, this is a use case that we've always speculated about, but now it's here front and center in this article that the Pentagon is trying to negotiate with Starlink to provide the service in Iran. And so talk about a powerful application, bringing internet connectivity to people in an area that has an oppressive regime and freeing them by giving them internet access, not just like in Starlink's case, SOS text messaging, but full broadband. And there's a ton of potential use cases for that, whether you want to help people organize or even if you have, I guess, people working covertly, you can create— you can give them this ability to access information anywhere where they are. I mean, I guess it would be kind of similar to how some people might have a satellite phone in a hostile country and they're able to communicate even though And that would be their sole way to communicate outside of the country. But here, because you're communicating to unmodified phones over cellular network from a satellite, then you can do a lot more. You can reach more people. It doesn't have to be covert. People already own a phone. So very cool stuff. The reason why I think this article is, for me, I joked that I came in this morning very bullish, but clearly not bullish enough because of this article. The key thing is that, you know, we've got like 2 key, 2 important use cases. I think for the US drone applications, in the article, it talks about that being potentially worth hundreds of millions of dollars. So just one application for this specific drone, hundreds of millions of dollars. So that, I mean, just think about like the TAM for ASD SpaceMobile, you multiply that across multiple drones, different products, or this direct-to-cell use, right? Like providing extraordinary usage in a country, that's very valuable. Or again, doing some of these other applications, whether it's PNT, radar sensing, you name it, right? There's just a whole host of applications, which is why, again, the US government is interested in what AST has. Like, if you can imagine these large phased arrays, you've got over 100 in low Earth orbit, there's a lot of cool things that you can do when those things are working together. But yeah, this article, it comes at a timely time. That's a bit redundant, but back in 2025 in May, that was a time when I think there was a spat between Elon Musk and Donald Trump, and then the entire space sector rallied hard, right? Because I think they had a pretty big fallout. And so here you have the ingredients of a potential fallout where Starlink is saying, hey, we know we were charging you $5,000 for each drone. We want to make that $25,000 or $30,000, which is kind of insane, right? And then in particular, this article, and maybe it's a public shot across SpaceX's bow before them going public. In here, it specifically says, um, you know, Pentagon officials said the office responsible for acquiring the terminals, the Commercial Satellite Communications Office, is working to find other competitors. And so, yeah, I mean, if, if, um, and I think this is good for the entire space sector where, um, this overreliance on SpaceX, uh, is not good for the country. I mean, and, you know, Obviously, competition is good and you want to have multiple vendors, but I think having vendor lock into one provider for communications or one provider for launch is not good, especially if the founder— there's one person who controls the entity and depending on their political views, they could go one way or the other and that could be obviously maybe in harmonization with the administration or against the administration or in the EU, for example. Obviously, Elon has had a number of conflicts and differences of opinion with the EU, which I guess it is interesting to point out. There was an article, I'll try to find it, I'll tweet it out today, but there was an article kind of prepping the market for the fact that the EU is probably going to favor European entities for allocating the 2 gigahertz of MSS spectrum that's coming up in 2027. And so this, I mean, I'll just read this headline. This headline is pretty telling. It says, EU to favor European satellite services to prevent Starlink's, Musk's Starlink's expansion. And so that's about as bullish as it gets for AST's Satellite Connect JV with Vodafone and Orange and Telefónica. And I believe Deutsche Telekom will join that. group as well. But yeah, there's a lot of positive things that are falling into place for the company here. But going back to what I was saying before, I think SpaceX and its dominance of the field is a liability for the company. And just given how front and center and how much attention Elon gets, and he's obviously very politically, um, he has— he, he's very politically charged. And so I think it's just going to be, uh, something that's beneficial to, to the remaining players where, um, US is, you know, looking to diversify. So whether that's AST SpaceMobile, it's, you know, Rocket Lab, Firefly, um, you know, any number of these companies, um, I think, I think will benefit from this. Also Blue Origin, of course. Speaking of Blue Origin, um, I did want to say that, uh, There's some speculation that, and to me it seems like it might be a bit early, but who knows. But there is this possibility of Blue Origin New Glenn actually launching this Friday, which is pretty insane, right? Like they, all the industry specialists and legacy guys and consultants were saying that Blue Origin, the FAA investigation was gonna take anywhere between, I saw as little as 4 months, but as long as, you know, a year. And then of course they got that resolved in a month. And so the reason why it's important obviously is that AST is looking to New Glenn as a primary launch vehicle. The New Glenn is probably going to put up most of our satellites. And so the importance of having New Glenn up and running and on commercial cadence is critical for the company. And so as most people know, we've got 2 to 3 Falcon 9 launches coming up, but then New Glenn, my guess is based off of, um, the, the FAA investigation wrap-up, and then, uh, you know, this next launch for New Glenn 4 is likely going to be an Amazon LEO mission, um, which is good because you want to make sure that the vehicle, uh, is successful and there's no issues. But, uh, I think we could see a New Glenn launch as early as, you know, July. But more likely August. I mean, we've obviously got to have satellites prepared for that, but you could see a batch of 4 go up on Blue Origin New Glenn by the end of the summer, which is pretty insane. And that's important because I think this is a catalyst that perhaps isn't really pricing in just yet because it was a negative catalyst before. What I mean by that is when the New Glenn 3 launch was unsuccessful, but the delivery of Bluebird 7 into orbit was a failure, the stock actually traded down. I think from the peak, we were like at around $90 or high $80s prior to that mission. And then of course the stock cratered all the way to $63. And then that was kind of the bottom and we started to get some positive news flow and partially that was Space Mob doing their due diligence and we started talking about New Glenn coming back online. But I do think if New Glenn 4 has a successful launch and is able to deliver Amazon LEO cargo successfully, I think instead of having a 20% to 30% drop in the stock price that we saw, which the stock has been trading at some level of discount, you've seen that underperformance relative to Rocket Lab, by the way, which I've pointed out Um, this reversion to mean, this pair trade where, where, um, I know some people have poo-pooed it over the last few days, but, uh, we're closing that gap. Like, uh, that, that, uh, you know, we've, we've always traded at some— and this is a very simple, like, stock price, stock price versus stock price premium. Obviously Rocket Lab's got a much bigger market cap at this point, but, um, the 2 stocks actually trade as a pair. And so at various points of time, we've traded at a pretty decent premium At some short periods of time, Rocket Lab has traded a premium, and of course recently Rocket Lab has traded for an enormous premium. And when I when I had tweeted, I guess a few other a few days ago, you know that premium I talked about this this reversion to mean which is actually happening, which has happened over the last few days, and and then today is like a pretty big gap or jump to you know we're up I think what nineteen dollars and thirty cents, and and Rocket Lab is up. Uh, $6.28. So I think eventually we'll close that gap, um, which is a good thing. Like, I, I hope Rocket Lab keeps going up. I hope it goes to $200 and we close the gap and we're both at $200. That's great. But, um, the reason why I mentioned that is, is we've been underperforming because of this uncertainty around Blue Origin New Glenn. However, um, if they actually launch this Friday or in the next week or two and it's successful, I do expect there to be a pretty significant relief rally in AST where Um, you know, you had like Tim Farrar and, and, uh, this new ding-dong Stuart Lucky or whatever his name is, Stuart Taylor. Um, some of these multiple consultants saying like, oh hey, you know, um, our satellites, uh, won't fit in the fairing on F9. Which by the way, like when the F9 goes up with, uh, with 3 of our satellites, when people actually see the satellites in the fairing of the F9, like maybe I guess we'll rally a little bit because this was actually a, a rumor that was perpetuated by these clowns. And then these hedge funds who were short, they actually were very serious about it. And so it was something that was passed around the street. There was also like an expert network conversation where, or actually there were a few where the person, the hedge fund who was asking questions of some of these industry people, they were referring very specifically to the fact that it was their belief that our satellites would not fit in a Falcon 9 fairing. So when that launch happens, when people see that those 3 satellites are interfering, I do expect there to be some small positive reaction. Obviously the bigger reaction will be a successful mission, but going back to Blue Origin, I think if we do see a successful Amazon LEO mission on Blue Origin New Glenn 4, I think our stock's gonna rally. I don't know, maybe like there'll be a relief rally of 15, 20%. Um, just on this notion that the vehicle is working and it's fine and, um, there's no issues with it and they resolved everything. And so that overhang is going to get removed. And so that's something to look forward to. Um, and that could happen as early as this Friday. Um, I mean, we'll see. Uh, obviously they've got to do a static fire, um, soon, uh, before that happens. But, um, but yeah, I, I think Jacqueline, the, the barge that catches the booster, that, that was, um, That was back in for some maintenance, but as of yesterday, they started pushing the barge out. And so we could see a launch very soon here. And so some of these bears who— and this is a good segue to short interest. Some of these bears actually— let me just pull up my post here. So when looking at real-time short interest, it's been pretty stubborn. It stayed at the same levels, call it around 67 to 69 million. shares, but we're still at all-time highs. And so there probably has been some level of short covering, but then offsetting that are convertible ARBs who've shorted the stock. Their deltas increase as the stock price goes up, so they'll have to hedge. But we're basically flat. As of yesterday, the latest report is at 67 million shares. And so we haven't really budged. And I think as Cook talked about last night, last June, when we had this unidirectional movement up of the stock was up 100%, a decent amount of that was short covering because we saw short interest go from all-time highs to what was then more moderate levels over that period of time. And I think we're at the beginning of that. For whatever reason, these guys are— whoever's short, I guess they're feeling lucky or stupid or they don't like money, they have been stubborn. They've kept their position out there, even with the stock price going from $63 to $126. And so I did put out this poll earlier where asking people what they thought the June peak high would be. And so let me just see what the results are because I actually didn't go back and look at it yet. But I think a lot of people were trying to be pretty conservative. I mean, I didn't have the most conservative prices in here. So I had $175 at the low end, $200, $250, and then $300. So I think I think 45% or 46% said $175. $200 had about 26% of the respondents. $250 was 8.6%, and then 20% voted for $300. And so, um, I think a number of people were like, hey, these prices are— maybe they're too high. Um, you know, I'd be shocked if it gets there. And as, you know, we've talked about, like, when you have, um, multiple catalysts and you've got the SpaceX IPO and all the, all the interest and excitement around that, be prepared to be surprised. Thinking 2 years ago when the stock was at $2, I would've never fathomed the stock being at $127. And we're basically, by the way, folks, we're about to hit our all-time high. I think our all-time intraday high was $128 and we're at $127. But I remember Kuk and I talking about how we would be happy if the stock got to like $20, And then when it got there, it's like, oh, we'd be happy if the stock got to 50. And then it got there, and then we'd be happy if the stock got to, you know, so it was like this moving thing. But what accompanied that was the fact that the company was, um, you know, hitting all these different milestones, right? Whether it was like raising capital in order to fund the constellation, uh, winning all these like military awards, signing on Saudi Telecom. I mean, people forget, like, that was only a few months ago where Saudi Telecom came in, committed over $1 billion over 10 years, also prepaid $175 million of revenue. And then of course, Saudi Telecom operates in a lot of the Gulf countries and then has, by the way, 60 megahertz of S-band spectrum that they purchased in auction, which we'll be able to light up. And so yeah, as the company executed and hit these milestones, the stock went up and then of course, that unlocked more. Um, you know, as these milestones, you know, kept, kept, uh, as they kept knocking out these milestones, it unlocked more and more value. But, um, but yeah, we're, we're heading into this period, uh, with all-time high short interest. And then, you know, we've got, um, the Bluebirds 8, 9, and 10 launch that's going to happen in mid-June. Uh, obviously the SpaceX IPO is happening at the same time. We also have, uh, the index inclusion, which is gonna occur towards the end of this month. And I think that's gonna Or not index inclusion, but reconstitution. So we're currently in the Russell 1000, but our weighting cap is going up as well. So that's going to create index buying as well. But yeah, there's a lot of exciting things to look forward to. And I think there's a lot of little side things that are going on. For example, Brazil just granted us the ability to operate there. And with that, I haven't even dug into that one, but there's, on a country-by-country basis, there's a lot of things that are going on for the company where, for example, in Brazil, we were given an allocation of S-band spectrum, and that's in the face of the FCC here, where I think there is this opportunity where some of the S-band spectrum has not been exclusively, let's say, allocated to Starlink, where we have an in possibly for a 10 by 10 10 by 10 band of spectrum allocation for the US and Brazil, and then that would also probably roll over to Europe. And so yeah, there's a lot of, a lot of these things that are going on. But, um, the last thing I wanted, I wanted to talk about, and then I'll see if there's any comments, um, you know, the Starship update. I think Katzi wrote some pretty interesting stuff which I hadn't really thought about, um, over the weekend, which is, um, this whole idea of using too many engines versus using just enough engines, uh, because You obviously, like in a launch vehicle, you wanna have redundancy. And so, you know, you don't wanna have one engine, you wanna have like a few engines in order to create an environment where if one engine fails, you can still get to orbit or, you know, still accomplish your mission. Whereas the point that Katya was making is that when you have too many engines, so for Starship, for example, you've got, I guess, 33 engines in the first stage.
[00:30:26] Speaker B: Yeah.
[00:30:27] Speaker C: you create this environment where there is a higher probability of an engine failure. And then what happens is then there, because of the way, and I'm not a technical guy, but because of the way that the engines are linked, you could have a situation where there's a cascading failure, right? Which is actually what we saw with this new vehicle. And so I think the reason why I bring this up is that, you know, I hope SpaceX is able to get Starship going. I mean, it's good for the industry and I wish them all the luck in And whenever I see them launching the next Starship mission, I'm always hopeful that everything will go well. But I think it's also important to kind of recognize this stuff is really hard. And comparing, for example, Starship to Blue Origin New Glenn, it's almost night and day difference, right? Because I didn't really fully understand the difficulty of burning a second stage until I kind of dug into it more. In the case of Blue Origin New Glenn, they've landed the booster, and so that's great, but then they have an expendable second stage to deliver the cargo. And they're working on also a reusable second stage, but that problem is really, really hard. And with Starship, one of the biggest issues is returning the second stage in such a way that you can refurbish it, replace tiles or clean the tiles, and then it back on the pad and then launch it again. And that's the holy grail, right? Reusability, not only for the booster, which makes a ton of economic sense, but where the economics can be a little fuzzy is like the second stage, because the second stage goes through a lot more, you know, it's traveling way faster than the booster when it comes on reentry, it has to get through the atmosphere. And so this idea of like having these heat tiles that protect that second stage, but then once it returned to Earth, I mean, we all saw it. It returned and it was completely charred, which is better than it was before in prior missions, but then obviously exploded. But perfecting that and getting it to a commercial cadence where you can launch it regularly, and then when it lands, you're able to then go refurbish it and get it ready for the next launch, what's the turnaround time on that? And so I think there's this debate going on whether Starship, the second stage, is going to get to a point where it's reusable, or maybe they scrap that idea and eventually shift to an expendable second stage. But the reason why that's important is that Starlink's direct-to-cell V2 satellite is solely dependent on Starship becoming commercially viable and up to a regular cadence. And so Um, that is something that, you know, as an ASD SpaceMobile shareholder, you know, folks should watch closely. Um, because then once that, um, once that vehicle is up to commercial cadence, then they'll have the ability to actually, you know, deploy satellites that are going to be a bit more competitive. Uh, well, the current version is not competitive, and the next version, which, um, will be able to use Star spectrum Uh, I think, I think most likely you'll see that starting in 2028, maybe 2029. Um, but yeah, that's— it's all, you know, if Starship does face setbacks, then it's going to also drag out the time that it takes in order to get those V2 satellites up. Uh, the other thing I would mention is that, um, the FCC did approve EchoStar's sale of spectrum to, um, to SpaceX. And so some people might wonder, well, why are they targeting November 2027 as as a close date? Well, there's a few things around that. One is, I think, the timing of some debt payments, and in order to close that deal and avoid some of these, I think, financial penalties, then the companies are waiting to close the deal a year and 2 months from now. But then also, it's not just US regulators, they have to get through international regulators. So there's country-by-country approvals that still need to happen for SpaceX and EchoStar. And so You know, for all intents and purposes, I think they probably are going to be okay, but, um, you never know with these regulatory, um, reviews. And so I think that's something to keep an eye out for. Uh, and then obviously we learned in the SpaceX, um, you know, IPO prospectus that SpaceX is not working with handset guys. They're totally, totally depending on the MNOs in order to push, um, compatibility. Um, and so for, you know, handsets to adopt the, the spectrum that they're planning to use. So we'll see. They obviously have to maintain positive relations with the MNOs. And as I've pointed out in some of my recent posts, some of these guys are getting cold feet. So we saw T-Mobile join the AT&T and Verizon joint venture, which to me, that means like they're— and from what I understand, they'll be joining AST SpaceMobile service. That's just not as explicit as can be said just due to regulatory issues. But then Deutsche Telekom They had a, they had a, um, uh, uh, in their earnings announcement, uh, last week, they, they talked about how, you know, they, they feel okay with their Starlink relationship, but then they're also open to working with other providers because they do not want to be locked into one vendor. And, um, they understand the risks of, you know, obviously if Starlink does eventually start competing more directly with them, which I did point out, um, you're starting to see that narrative hit more. So initially, by the way, the narrative around direct-to-cell being a threat to incumbent businesses, that originally was focused on the tower companies. And so we saw American Tower, Crown and Castle, some of these guys, they all traded down and traded at pretty crappy valuations, I think starting mid last year on these concerns that satellite connectivity was going to crimp their growth and potentially remove some of the areas where they provide tower services that may not be needed, or for example, some of these carriers might look to save some money. But then that has now shifted towards the MNOs. And so looking at some of the latest sell-side research, and then of course, If you just listen to Verizon, AT&T, T-Mobile earnings calls, maybe a year ago, no one really cared about satellite, but now each one of them, like clockwork, are getting questions around direct-to-cell, direct-to-device. It's like, hey, so I know you're working with these satellite companies, and so is this a potential threat? And each of the executives, obviously they're going to say, not much of our traffic. We don't think much of the traffic will go onto these networks. Obviously solving the last mile is very important, and for customer satisfaction, you need to have broadband connectivity 100%, no matter where you are, because that's the holy grail, right? And that's what people pay a premium for. But then they'll talk down about the potential for satellite networks to be competitive, which they should, right? Because it's not really, at least for AST SpaceMobile's model, it's not to be competitive, right? It's to be complementary and in times when needed, augmenting the core network. Whereas— and the reason why people are getting this question is that obviously Starlink is out there buying spectrum and they're looking for more. And when you have Elon Musk publicly saying, yeah, I want to become an MNO, a global MNO that will compete with all these companies, it's hard for these MNOs to avoid those questions. And so I think the narrative is shifting and it's now at a point where Like Deutsche Telekom, they were asked on the call about it. And so was AT&T and Verizon and T-Mobile. I mean, everybody's going to be asked about it. Like, what do you think about Starlink? And when they start competing with you. And so I think that's where the narrative— it's interesting how the narrative has changed where before direct advice was kind of poo-pooed on and not really viewed as a market, whereas now it's like an existential potential threat. And that is now prompting some of these boards and management teams to think differently about their relationships, which is where I think Starlink, they disclosed in the S-1 that they've got 30 MNOs that they're working with globally. And another interesting disclosure, which I covered last night in a tweet, is that these contracts are for multi-year, 3 to 5 years. However, the MNO customer can terminate them at any time, which I found kind of funny. Because I think for some of these companies who made this commitment to Starlink, once they find out you know, what, what Starlink is trying to do and what a threat it is. I think, I think you're probably going to see a big shift away from Starlink to AST, um, you know, over the coming months and years, uh, which, you know, we saw the big one first, which is T-Mobile. So, um, anyway, that's kind of all that I had. Uh, I'm gonna take a look and see if there's any comments. But yeah, it's a very, um, very exciting time to be invested in AST and also to be invested in the space sector. Uh, someone— okay, here's a— here's one comment. I love you, Ant-Man. I love you too. Uh, hard not to be, uh, optimistic and positive given what's been going on. But, you know, I, I will say, we, you know, everybody, um, in this space and, and folks who have invested in the space sector, like, we, we saw this like many months coming, right? Like, the writing was on the wall that the SpaceX IPO was going to be a pretty big catalyst. Why is that? Well, you've got the largest in the proxy, the largest company in the proxy for the entire space sector, now at what, a $2 trillion valuation. The management team's out on the road right now. They're going to do meetings in Boston, Chicago, Denver, LA, where all the big mutual fund assets are. And so people are learning about the space sector and they're learning that there's a tremendous TAM potential here. It's not just something that's focused on consumers, but it's also government applications. And they're learning about this new vertical called AI data centers in space, which I'm sure they all read about it and heard the skeptics say, ah, it's not possible. But then imagine the SpaceX executives like Gwynne Shotwell sitting in a meeting with Fidelity and saying, hey, well, this is what— and maybe Elon's there too, but they're talking about the opportunity around Starlink connectivity launch, putting a Mars colony Moon colony, all these things. And then they talk about, well, the killer app in terms of commercial use is beyond what we're doing with Starlink, is this idea of putting data centers in space. And so if you were sitting in the room with Elon Musk and Gwynne Shotwell, and they're explaining to you in detail how you solve all these different issues and why AI data centers is not just a dream, but a requirement for the future, then you're going to become bullish. And then coming out of that meeting, in that presentation, by the way, it shows some of the other comparables. So other companies in the space sector that you're benchmarking in terms of valuation, and that's where a lot of these new institutional investors are learning for the first time about some of these smaller companies like Intuitive Machines or Planet Labs, Rocket Lab. They're learning about it for the first time. And so they're going to come away from the meeting and figure out like, okay, well, we can invest in SpaceX at a $2 trillion valuation, and/or we can look at some of these other companies that are more of a pure-play way to express the trade. Because I think the issue for, and I've talked about this before, is like with SpaceX, you're getting a bunch of other stuff. You're getting x AI, you're getting x with all the baggage and CapEx spend that comes with that versus being able to invest in a pure play like Rocket Lab. Maybe that's more interesting to you. Or the other thing that they've got to think about too is governance. So what is Elon going to do? Obviously he's a successful entrepreneur. He's been successful in most of the things that he's he's been doing. But, you know, is he going to merge it with Tesla at some point, maybe within a few months? Like they did this acquisition of Cursor. Um, and so they can do all these deals, by the way, without shareholder vote because Elon basically controls the vote. So, um, anyway, uh, maybe I'll just end it there. Um, I did want to get people together and talk about this Reuters article, which I think is very important. It just highlights the 2 important use cases for AST, and that the Pentagon is chomping at the bit, uh, trying to get, you know, Starlink to work with them. But obviously they're looking— I mean, this article specifically says they're looking for competitors, and we know that AST is working with the Department of War, SDA, DIU, and the Pentagon. And so it's just a matter of time, right? Like, these, these, um, contracts are going to— on top of the 30 contracts we have, like some of those will expand into multi-billion dollar contracts, and then we're going to get additional contracts. And so, uh, if you liked the commercial business, you're going to love the defense business. But, um, thanks everyone for joining. I'll just end it there. Maybe we'll do another space, um, when stock gets to $150 in a few days. Um, anyway, hope everyone's having a good day, and we'll catch up again soon.
[00:44:09] Speaker B: Take care.
[00:44:09] Speaker A: Thanks for listening to the AST SpaceMobile 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.
[00:44:37] Speaker B: I believe 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 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 to bring this into reality, always in partnership with the animals. Listen. Mmm, waffles.