The Trillion Dollar Gap | Aswath Damodaran on SpaceX, AI and the Big Market Delusion – Excess Returns

Professor Aswath Damodaran joins Kai Wu on The Intangible Economy to break down how to value SpaceX, AI companies, intangible assets, and the future of value investing.

We discuss why big markets do not automatically create big value, how AI CapEx is changing the character of major technology companies, and why the best investment stories still have to connect to the numbers.

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Topics covered:

Valuing SpaceX after its IPO and why price matters even for great companies
How Starlink, space launch, and xAI fit into SpaceX’s valuation story
Why total addressable market can mislead investors in AI and other disruptive industries
The problem with AI unit economics, data centers, power, water, and reinvestment needs
Why growth can destroy value when margins and returns on capital are weak
How intangible assets, R&D, future growth, and narratives should show up in valuation
The Big Market Delusion and how overconfidence drives boom and bust cycles
Why AI CapEx is different from the dot-com boom and could create broader risks
How AI is changing the character of the Magnificent Seven and semiconductor companies
Why value investing became rigid, ritualistic, and righteous, and how it can evolve

Timestamps:

00:00 Why great companies can still be bad investments

01:03 Introducing Aswath Damodaran and The Intangible Economy

01:49 SpaceX IPO, Starlink, xAI, and the challenge of valuing uncertainty

05:31 Why Starlink became the core of SpaceX’s current revenue

10:31 How Damodaran valued SpaceX across launch, connectivity, and AI

14:07 Why AI’s huge market may still have difficult unit economics

17:10 The tension between SpaceX competing in AI and renting data centers to competitors

20:00 Why valuation should use distributions instead of false precision

22:39 How stories and numbers work together in valuation

26:45 Why investors confuse promises, potential, and businesses

30:49 The Big Market Delusion and overconfidence in AI investing

33:02 Why the AI CapEx boom is different from the dot-com bubble

35:17 How AI infrastructure is changing the Magnificent Seven

38:36 Nvidia, Micron, semiconductors, and the risk of peak cycle earnings

41:00 Why the biggest AI market stories could be scary for society

43:37 AI disruption, labor markets, and the speed of technological change

46:30 Measuring which jobs and companies are most exposed to AI automation

49:00 Why AI cost structure may look more like Spotify than software

51:13 The unresolved business model questions for LLMs and AI agents

52:29 Why traditional value investing lost its edge

56:03 Passive investing, book value, and the blame game in value investing

58:13 Why rigid value investing is vulnerable to AI disruption

01:00:58 How value investing can adapt to intangible assets and uncertainty

01:02:21 Why any company can be a good investment at the right price

01:04:57 Why investing mistakes and track records are harder to judge than they look

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