Michael Burry Challenges SpaceX $1.8 Trillion IPO Valuation

Michael Burry challenged the valuation of Space Exploration Technologies Corp., arguing that the company's IPO filing did not justify a $1 trillion valuation, nor its eventual $1.8 trillion debut. Burry characterized the business as a fragmented mix of small space, niche telecom, and struggling social media operations, while describing its AI efforts as "CoreWeave-light."

Space Exploration Technologies Corp. has countered these criticisms by securing several major AI computing contracts. These include agreements with Anthropic for $1.25 billion per month and Alphabet Inc.'s Google for $920 million per month, as well as a $150 million monthly deal with Reflection AI, Inc. These contracts project annual revenues of $40.8 billion for the company's AI division.

Despite the revenue growth, the AI division remains unprofitable, having spent $15.8 billion on infrastructure in the second quarter alone. Critics point to short 90-day termination clauses within these contracts as a risk. Burry maintains that AI technology will eventually become commoditized, which could reduce compute providers to low-margin utility companies.