The great SpaceX IPO is looming, allowing outside investors — including regular Joe Schmoes, or retail investors — to buy a stake in one of the buzziest and most controversial companies on the planet for the first time. Depending on who you ask, it’s either the best investment opportunity you’ll see this decade or a fool’s errand to rip off credulous Musk fanboys. With valuations of the company going to sky-high levels, over $1 trillion according to some estimates, there’s certainly a furor around the potential for rich returns.
But is there really any money to be made in space?
Let’s be clear: There are plenty of companies making money right now by providing space services. From Earth observation satellites to communications to launch services, there already exists a whole ecosystem of companies working in low Earth orbit, providing invaluable services to people on the ground.
Where the question gets trickier is when we start to look at the economics of launching humans into space, or sending missions to the Moon or beyond into deep space. These are SpaceX’s stated aims — or at least, the loudly stated aims of Elon Musk, so it’s reasonable to assume that’s where the company has set its long-term sights. And SpaceX is the dominant force in the space economy right now, so if anyone can make this work, it can. There have been suggestions that there’s money to be made in mining asteroids, or extracting rare earth elements from the Moon, or performing drug research in microgravity, but there is vigorous debate among experts over the business cases for these plans.
It’s essentially just very, very expensive to do anything in space, with costs ballooning due to the price of a ride on a rocket, the extremely high level of reliability and safety needed for any hardware that you launch, the weight constraints, lack of opportunity for maintenance, and the need to secure power and shield from space radiation. That’s all without mentioning the astronomically higher costs that come when humans are being launched as well. It’s much cheaper to do your work on the ground, whether it’s research or re
In practice, it’s unlikely that anything you could dig up from an asteroid, for example, would justify the cost of sending a mission there right now. Take NASA’s OSIRIS-REx mission, which traveled to an asteroid to acquire a sample and bring it back to Earth for scientific purposes. It cost over $1 billion and was a decades-long undertaking of tremendous engineering skill and expertise that succeeded — impressively — at returning around 120 grams of material. Even in the case where an asteroid is known to be made of potentially valuable metals, even if a mission were purpose-built for the goal of mining and did manage to return and land those metals safely on Earth, trying to flog huge quantities of those metals would likely lessen their value anyway as the market became flooded.
Then there is the new crop of up-and-coming space economy ideas, like AI data centers in space or space-based solar power. These are technologies that work on Earth, and could theoretically be made to work in space, with their affordability aided as the price of doing anything in space drops as technologies and markets mature. The justification is that data centers gobble up electricity and water for cooling, using up power and creating pollution, but if they were in space then they could take advantage of plentiful solar energy and cooler ambient temperatures — though experts warn that the issues of space debris and orbital overcrowding are a risk, and that emissions of infrared radiation could interfere with astronomy. So could a company make money in these enterprises? Potentially. Has any company got a concrete plan for how to do it yet? Nope.
Some of the teething problems of space commercialization can be seen in NASA’s uncertainty over the future of the International Space Station. Now old and outdated, the ISS will need to be deorbited in the next few years, and the plan was to replace it with a number of different commercial space stations. NASA would financially support the development of these stations, then become a customer of them, sending its astronauts on stints there to perform the same space research the agency has always done.
At least, that was the plan. Progress on the commercial space stations was slow, and last month NASA pivoted to an entirely different approach due to a limited budget. The hope had been that private space stations could be funded by space tourism and other commercial ventures, but that Montalbano, acting associate administrator for NASA’s Space Operations Mission Directorate, acknowledged that NASA had expected the space tourism market to take off and pump money into the sector, but that had failed to materialize. Now, the fate of humans in space is up in the air.
