SpaceX, Adding It Up: Reading the Whole Release
Two instructions, both on the record: read the entire prospectus, and test the AI assumption. We did both.
The prospectus summary, where the largest numbers sit, carries its own caution. It “does not contain all of the information you should consider,” and the reader “should read this entire prospectus carefully.” The free writing prospectus that disclosed this week’s contract points back to the same document. And the most-cited valuation of the company asked its readers to check one number for plausibility. Two instructions, from the filing and the analyst, each pointing past the headline. This piece follows them.
The assumption
On June 4, Aswath Damodaran published his post-prospectus valuation, the work we would send a reader to first. On his numbers the equity is worth $1.25 to $1.35 trillion, and the offering price stands at 138% of it. In reaching it he made one change he flagged above the rest. He doubled his target for the AI business: “I will double my target revenues for AI from $80 billion to $160 billion.” He raised it on the company’s stated ambition, the Cursor acquisition (the enterprise AI coding company it holds an option to buy) and “the indications in the prospectus,” while noting he had “not much to go on” on enterprise revenue, and that the filing’s “focus ... is more on the increase in compute capacity ... than it is on revenues.”
He then named the risk he weighed most: “the one that I would be concerned about the most is that it will overreach in the AI business, beginning with an overestimate of the target market for AI products and services and the strength of its own competitive position in that market.” And he set the task for the reader: “listen but check the numbers for plausibility and make your own judgments.”
That is the assumption. The AI revenue line, doubled, named as the one to watch, handed to the reader to test.
The headline
The summary supplies what looks like the answer. Two compute agreements, both disclosed within the month. Anthropic, signed May 3, at $1.25 billion a month through May 2029, roughly $45 billion across the term. Google, disclosed June 5 in a free writing prospectus, at $920 million a month from October 2026 through June 2029, about $30.4 billion. Together near $75 billion of AI compute revenue, contracted and named. Read at the headline, that carries the doubled assumption. Close to half of the year-ten AI target, in signed contracts, inside a single month.
The release
The instruction was to read the rest, and the same documents price the commitment behind the headline.
Both agreements are terminable by either party on 90 days’ notice. Anthropic’s runs from signing. Google’s holds until after December 31, 2026, and its first dollar is contingent on SpaceX delivering 110,000 GPUs by September 30, with Google free before then to terminate or take fewer. Counting each notice period at the full rate, with delivery met, the most the disclosed terms can require is near $9 billion. The firm figure sits below that. The balance of the $75 billion is the part the customer may decline, and the part the filings price “at a reduced fee” with no amount stated.
The capacity reads in the same register. Colossus and Colossus II “collectively provide approximately 1.0 gigawatt,” and that cluster is at work: “Grok 5 ... is currently being trained at COLOSSUS II.” The leasing is described as selling “excess capacity ... to a limited number of third parties,” under a “dual monetization strategy,” with the company “permitting reallocation of the capacity for our own internal initiatives if needed in the future.” The next build carries the same claim: “the next phase of expansion at COLOSSUS II is designed to train our next-generation Grok 5.” The third-party revenue is the residual on a cluster whose first claim is the company’s own model.
There is a second reading the release supplies. Damodaran’s doubled figure is for “AI products and services from businesses,” priced in his model at a 25% operating margin. The two contracts are compute rental, the company as landlord, monetizing capacity it has by its own account in surplus. The headline that meets the products assumption comes from a different line than the one the assumption prices.
The counterparty
The release names one thing the summary does not. Google is among the “existing investors” party to the company’s Investors’ Rights Agreement, and Donald Harrison, President of Global Partnerships and Corporate Development at Google, “has served on our board since February 2015.” One of the two named contracts, the Google agreement, is with a shareholder represented on the board. The contract sits in the free writing prospectus; the ownership and the board seat sit in the related-person section and the director list of the May 20 prospectus. Each is disclosed, in a different place, in a different document.
Adding it up
That is what the release returns, read against the assumption the reader was asked to test. The AI line was doubled and named as the one to watch. The headline that appears to confirm it totals near $75 billion. The terms behind it commit a cancellable fraction, on capacity the filing calls excess and recallable, from a segment that is the company’s own, with one of the two held by an owner.
Every one of those facts is filed. The headline stands alone in the summary; the commitment, the capacity, and the relationship sit apart, in the risk factors, the subsequent-events note, the related-person section, and a separate free writing prospectus. The answer is in the documents and assembled in none of them. It reaches the reader who reads the entire prospectus and checks the numbers for plausibility, which is what the filing asked and what the analyst asked.
We did the reading and the arithmetic. Tested at the headline, the assumption holds. Tested at the terms, it waits on a delivery, a notice period, and capacity the company may take back.
Part of a continuing read of the SpaceX offering documents, taken one at a time and in a single currency. The earlier notes totaled the disclosed cash requirement against the raise, and read the two compute contracts against their terms. This one tests the AI revenue assumption the prospectus and its leading valuation both put forward.