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The rocket gets the headline; the infrastructure gets the money. |
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One Number
Novaspace’s estimate of the global space economy in 2025. Space Economy Report, 12th edition, January 2026 Rockets account for just $9.3 billion of it, or less than 2%. The single largest slice of $155 billion is equipment on the ground. |
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One Argument This issue came from a subscriber question. Several of you asked about the business of space — here is the argument. The space economy is not a launch story, it is an infrastructure story.The SpaceX IPO made us think of space as a rocket business. However, rockets are just the delivery vans of this economy. They are necessary and visible, but represent just a rounding error next to the value they deliver. It is not the launch frequency that counts. SpaceX flew more missions in 2025 than the rest of the world combined, according to BryceTech/OrbitalRadar, yet its rocket division lost $657 million nevertheless.. The space economy’s largest single segment ($155 billion) is consumer electronics that most people never think of as “space” at all. It is the equipment that uses satellite signals - GPS chips in phones, navigation units in vehicles and ships, satellite dishes and internet terminals. Services delivered from orbit generated $108 billion in 2024, according to SIA/BryceTech. These include everything satellites send down - television, satellite internet, communications for ships and planes. This is the subscription layer where the profits concentrate. For instance, Starlink, essentially a 10-million-customer internet subscription business, was the only profitable segment for SpaceX with $11.4 billion in revenue and $4.4 billion in operating profit in 2025, according to the company listing documents. Building the satellites and launching them are activities that fill the headlines but generate relatively little money - $20 billion and $9 billion respectively. Both serve as enablers for all the other activities but as a business are competitive and loss-making even for the market leader. Governments add a further $138 billion a year into the space business, mostly on security. This is a separate topic for another issue. The small layers are small because they are early. Meanwhile, growth rates favour rockets and launch is growing 25-30% a year. Private investment into the space economy recovered in 2025 back to $9 billion, according to Novaspace, the largest annual increase since 2021. If SpaceX’s internet and artificial intelligence ambitions materialise, the market can actually get redrawn by a single company. However, SpaceX lost $4.9 billion overall in 2025 carrying the losses of Elon Musk’s AI company, according to the listing documents, while hundreds of companies on the ground earned real money the same year.
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One Position Anyone treating the SpaceX IPO as the beginning of the space investment story is a decade too late and is looking at the smallest segment of it. Money and returns are going to remain in the less glamorous undertakings. I may be wrong if SpaceX achieves profitability by 2027-28 and absorbs the ground business faster than independent operators can scale. The value would then concentrate inside one stock rather than across the infrastructure base. If satellite navigation and satellite data stopped working for 48 hours, what would break first in your business? |
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