SpaceX’s IPO is about much more than just SpaceX. It is a signal that the next phase of the digital economy may reward actors who control multiple layers of the digital stack, including in space: launch, satellite connectivity, chips, AI, cloud platforms, and applications.
SpaceX has metamorphosed from a space company into a conglomerate aiming to build a full digital stack. While in 2023, only 10% of SpaceX’s capex investment went outside the space and communications layers, by 2025, over 60% was allocated to the AI layer. This layer has expanded or is foreseen to expand into Earth-based data centres, orbital data centres, chip manufacturing, social media, and consumer and enterprise applications through Grok AI. The company now aims to supercharge its ambitions by raising up to USD 75 billion in what could become the most valuable IPO in history at a targeted valuation of USD 1.75 trillion.
This transformation reflects a world shaped by geoeconomics and the digitalisation of societies. Other Big Tech companies are developing and integrating ecosystems of their own, combining critical infrastructure, platforms, and services under one vertical service offering. As the world eases the throttle on globalisation and accelerates into multipolarity, where geoeconomics rule, the cost-benefit analysis of outsourcing critical dependencies is shifting. Risks increasingly outweighing the cost savings. Concurrently, the world is increasingly digital, a trend that could be supercharged by AI and other technological developments, creating demand for the next wave of infrastructure investment.
In this competitive environment, Europe has thus far been a clear loser. Over 80% of our digital infrastructure and technologies are imported. Building a digital stack is not just an economic calculation, in a digital world driven by geoeconomics, it is a sovereign imperative.
There are legitimate questions about the SpaceX IPO targets and numbers, and it is therefore not a given that the strategy will succeed. And if it does not, it could create negative ripple effects across the modern space economy, potentially far surpassing the previous SPAC-driven public market shock. While the space economy is developing at lightning pace, it often does so in circular dependencies. Many proposed business models will only succeed when other complementary models are already in place. The easiest example to spot is how many space companies’ value propositions rely on a single point of failure: SpaceX’s Starship.
But from Europe’s point of view, it would be a mistake to take comfort in shaky fundamentals of the company or to focus on calling foul over seemingly irrational markets. The fact that SpaceX is fast-tracking its inclusion into major indexes and reserving up to 30% of IPO shares for retail investors could very well mean it will succeed in obtaining a USD 75 billion cash injection. With this level of cash infusion, SpaceX may no longer be dependent on outside customers to justify its next industrial leap. This IPO means that a company with plans to change the space (and global) economy is here, and it potentially has the capital to do so.
The IPO makes one thing crystal clear: for better or for worse, the digital stack is again open for takers. Parts of the digital stack are new (e.g., AI & orbital data centres) while others, currently consolidated around globalised supply chains and legacy infrastructure, have reopened.
On the network layer, Starlink Mobile made clear to U.S. telecom operators that SpaceX was not merely a connectivity partner, but a potential competitor. In turn, this prompted AT&T, T-Mobile, and Verizon to form an improbable joint venture for satellite connectivity. Similarly, on the chips layer, the prospect of huge cash injections has propelled SpaceX to plan to manufacture its own semiconductors.
In many respects, Europe’s closest equivalents to hyperscalers are its telecom companies. And similarly to their U.S. peers they have not acknowledged that firms such as SpaceX and Amazon are ultimately their competitors. If the threat was not clear enough to push for investment in the space layer of the digital stack, perhaps the business opportunity will be.
SpaceX’s rise was driven by two key forces: strong and stable public sector support through NASA, which by some estimates amounted to USD 22.5 billion in contracts, and the ability to convert that public funding into USD 10 billion in follow-on private capital, towards value creation, including investment from hyperscalers, such as Google. Put simply, without public intervention, there would be no SpaceX today, and SpaceX took full advantage of this opportunity.
Europe is starting to step up with public investment, but it is as much about firepower as it is about having good aim. If public money gets lost in fragmented programmes, each aiming to catch up with the past decade, Europe will fail to create the strong demand base necessary for its industry to justify development of the technology and infrastructure required.
This is both an alarm bell and an encouraging signal for Europe. If one company – no matter its size – can set out to build a full digital stack, then surely an entire continent ought to be capable of the same ambition. SpaceX’s IPO signals that the race has begun anew – and for Europe, a second chance it should not waste.
Authors:
João Falcão Serra is the Lead of Industry & Finance at ESPI. Previously, he served as a Diplomat at the Portuguese Ministry of Foreign Affairs, focused on European Economic and Financial affairs. He has also worked at the European Space Agency (DG Services) and as a freelance researcher on enhancing UN peacekeeping training. João holds an LLM in European and International Law and a BA in Political Science and International Relations from NOVA University.
Jermaine F. Gutierrez is a Research Fellow at the European Space Policy Institute (ESPI). He
previously worked as a YGT in Data Analysis and Ecosystem Development at the European Space Agency. He holds a Masters of Space Studies from the International Space University and a BSc
in Banking and Finance from the Frankfurt School of Finance and Management.
