Reusable Rockets

Summary

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Hey everyone, we’re going to dive into the reusable rocket section of this year’s Big Ideas. I’m Sam Korus, a Director at ARK Invest and joined by Daniel Maguire, who’s an analyst on our team and has done great work for this section.

All right, so we believe and our research indicates that space is going to be a huge economy, A lot of growth is happening here. But when we look at what is going on right now, it’s less of a space story and more of a SpaceX story. And so, you can see that reusable rockets have really sparked this, and SpaceX has just absolutely dominated the number of satellites in orbit as well as the up mass in orbit.

And so right now, SpaceX, via its Starlink constellation, has more than 9000 active satellites, which is, you know, 66% of all active satellites orbiting Earth. And so of course, there are other companies that are actively trying to do this, but SpaceX being the first one to really commercialize orbital reusable rockets as this massive head start in putting mass into orbit.

And this gets to this next slide here, which is how important reusable rockets are and how they’re driving launch costs decline. And really, when we look at the space economy, the key input here is launch costs. It’s like if you get launch costs low enough, all of these things that people are talking about start to become economic. And so, we’re already seeing that with Starlink and bandwidth in space. But the next thing that’s a really exciting opportunity that people are talking about is orbital data centers. And this all opens up as launch costs come down. And so, you can see this is driven by a rights law curve. And you know, SpaceX has brought costs down roughly 95% from over $15,000 per kilogram to under $1000 per kilogram. But they’re not done there. As we progress towards Starship and rapidly reusable rockets, this could come down another order of magnitude closer to that $100 per kilogram point where all of this really starts to open up.

Hey, Daniel McGuire here, research analyst on ARK autonomous tech and robotics team. So as Sam mentioned, declining launch cost is just one component of the reusable rocket equation, and we believe the entire stack is changing. So, what we’ve seen so far is that the near-term opportunity for cash flow generation is coming from satellite connectivity.

And this is largely thanks to Wright’s law, which states for every cumulative doubling in gigabits per second to orbit, the cost per Gigabit per second is declining by roughly 44%. And that’s one of the reasons why we have seen exponential growth in satellite connectivity. Take for example, Starlink, which has amassed over 9 million active subscribers. But we’re at the very early stages of this.

For example, looking at the chart here in the right, at the start of the Millennium, people were paying the same amount today for marginal capability in only a small portion of the United States, roughly 1% according to our estimate. When you Fast forward today, you get amazing capabilities in the majority of the United States. But we believe there is still a way to go and satellite connectivity is the bridge to that gap. According to our research, for a marginal cost, satellite connectivity will bring us to a future where you can be connected anywhere on the globe 24/7 should you wish.

All right. So, for market sizing, when you combine the likes of direct to sell connectivity and Internet connectivity from satellite, we believe the overall satellite connectivity market could represent $160 billion annual revenue opportunity at scale or roughly 15% of our 2035 global communications forecast. For context, that’s up from less than 1% today.

So, this really is a big idea and an exciting opportunity for those companies pursuing satellite connectivity. So, in summary, for reusable rockets from our perspective, full reusability is key. Really, we live in an exciting time to be able to watch this all unfold. And at times it feels like a sci-fi movie, but we’re really looking forward to watching it all unfold in 2026.