March 22, 2024

E106: Noland Arbaugh controls a computer with his brain (Neuralink), Reddit IPO +48% day 1, Astera Labs IPO +72% day 1, $891b SpaceX 5yr valuation forecast, $610b OpenAI 5yr valuation forecast

10 minutes

00:09 | Noland Arbaugh controls a computer with his brain (Neuralink)
- 29yr old is a quadriplegic, Neuralink implanted into his brain last month
- Live stream of Arbaugh using only his brain to move a computer cursor, play chess, and play video games
- Implant is size of a large coin; 1,024 electrodes connected to brain for neural signal transmission
- Neuralink is pre-revenue; $4b secondary market valuation, +14.5% from its last round in Nov 2023

01:52 | Reddit IPO +48% day 1
- Social me2dia platform, entering the AI data business
- $9.5b market cap after day 1 of trading
- Raised $519m in IPO
- Advance Publications (Conde Nast) shares worth $2.1b, OpenAI CEO Sam Altman’s at $613m, Reddit CEO Steve Huffman sold 500,000 shares ($17m net)
- If higher price holds can be good signal IPO market is opening for private tech companies

03:37 | Astera Labs IPO +72% day 1
- AI-focused data warehouse infrastructure business
- Strategic partnership with Amazon
- $9.5b market cap after day 1 of trading
- Raised $713m in IPO
- If higher price holds can be good signal IPO market is opening for private tech companies

05:12 | $891b SpaceX 5yr valuation forecast
- Current Valuation = $184 billion
- 5yr Estimated Valuation = $891 billion
- 5yr Estimated Cash-on-Cash Return = 4.8x
- 2023 Revenue = $9.0 billion
- 2024 Revenue Forecast = $15.0 billion (source SpaceX)
- 5yr Estimated Revenue = $44.0 billion
- Current Revenue Multiple = 20.0x
- Starlink Subscribers, Jan 2021 = 0
- Starlink Subscribers, Mar 2023 = 2.6 million
- Starlink 2023 Average Monthly New Subscribers = 100,000
- SpaceX Falcon 9 Launches, 2023 = 98 (China was #2 with 67 launches)
- SpaceX Falcon 9 Launches, 2024 Forecast = 144 (source SpaceX)

07:19 | $610b OpenAI 5yr valuation forecast
- Current Valuation = $100 billion
- 5yr Estimated Valuation = $610 billion (base case), $1,000 billion (bull case)
- 5yr Estimated Cash-on-Cash Return = 6.1x (base), 10.0x (bull)
- Dec 2023 Run Rate Revenue = $2.0 billion
- Dec 2024 Run Rate Revenue Forecast = $5.0 billion (source OpenAI)
- 5yr Estimated Revenue = $12.2 billion
- Current Revenue Multiple = 50.0x
- $0 to $2b run rate revenue in only 1 year
- Google 5 yrs to reach $1b in revenue, Meta 6 years
- 92% of Fortune 500 use OpenAI
- 100m weekly users
- 18,000 OpenAI business customers through Microsoft Azure

09:40 | Pre-IPO -1.02% for week, +7.61% for last 1yr
- Week winners: eToro +9.0%, Chainalysis +5.4%, Brex +4.1%, Klarna +3.7%, Anthropic +2.8%
- Week losers: Chime -30.0%, OpenAI -12.7%, ScaleAI -5.4%, Anduril -3.7%, Discord -2.1%
- Top valuations: ByteDance $277b, SpaceX $183b, OpenAI $89b, Stripe $67b, Databricks $49b