Baillie Gifford is an Edinburgh investment partnership founded in 1908, famous for ultra-long-horizon, high-conviction growth investing — its early stakes in Amazon, Tesla and NIO are classics. Its "actual investors" philosophy holds world-changing companies on 5-10 year views; AUM is around $120bn. The Insights column carries its managers' investment views and thematic research.
SpaceX went public at an eye-popping $1.7 trillion valuation. But Baillie Gifford, a long-time private investor, still bought in. Why? They see real substance: SpaceX launches over 80% of global payloads, Starlink has over 10 million users, and Starship could slash costs by 90x. They even sold some Tesla to fund this. The lesson: even extreme valuations can make sense if you have deep knowledge and long-term conviction. This article shows how pros think—worth a read for context, not a copy-paste strategy.
Baillie Gifford holds an optimistic stance on the SpaceX IPO, based on a seven-year holding track record and the visible foundation of launches and Starlink, but views Starship and AI as only high-risk options. [Optimistic]
| Position | Direction | Author's View (One Line) | Key Data |
|---|---|---|---|
| SpaceX | New Position | Based on seven years of tracking and visible revenue from launches and Starlink, willing to accept extremely high valuation, but demands 'delivery of extraordinary things'. | IPO valuation US$1.7 trillion (92x 2025 revenue); Starlink revenue share 61%, over 10 million users; 165 launches/year. |
| Tesla | Reduce | Reduced part of holdings to raise funds for the SpaceX IPO, a routine operation for dynamic risk management adjustment. | Reduction size not disclosed, but used to support the initial SpaceX IPO position. |
BG purchased SpaceX private shares at a valuation of approximately $30 billion in 2018, opting to reassess rather than simply follow on at the IPO. The author emphasizes, "Just because we invest in a company when it is private does not guarantee we will buy it if it goes public." The seven-year holding record provides an evidence base far exceeding the prospectus. The IPO valuation of $1.7 trillion (approximately 92x 2025 revenue) requires the company to "deliver something extraordinary," but aligns with its strategy of seeking long-term market winners. Before investing, evidence is needed to verify a sustainable business, a credible expansion path, and an operating model capable of supporting new revenue streams.
SpaceX has delivered over 80% of global orbital mass since 2023, with Starlink contributing 61% of revenue and exceeding 10 million subscribers, anchoring the valuation. In 2025, the company completed 165 launches (nearly one every two days), with high frequency driving improvements in manufacturing scale, operational data, and reliability. Starlink has over 10 million users, expanding from rural broadband to aviation, maritime, remote industrial, emergency response, and defense. Direct-to-device services can connect ordinary mobile phones, and "customers are paying for the service today." These observable, billable businesses form the foundation of the author's analysis for estimating the broader space economy potential.
If Starship succeeds, it could increase payload capacity by 4x and reduce costs by another order of magnitude (potentially over 90x), while AI and orbital computing offer enormous yet high-risk optionality. The author admits, "We do not treat Starship's success as guaranteed." If realized, it would further improve Starlink's economics and support larger satellites and infrastructure. On AI, SpaceX integrates xAI, X.com, and extensive data centers, with existing contracts where Anthropic pays $1.25 billion per month and Google pays $920 million per month for compute resources (combined annual revenue of approximately $26 billion). However, the author views this as "optionality rather than the foundation of our valuation" — high capital requirements and execution risks coexist, while Musk excels at "making the impossible merely late."
BG reduced some of its Tesla holdings to raise funds for the SpaceX IPO, taking an initially small position and locking in profits after the listing, with ongoing management of multiple risks required. The author explains the decision to buy at IPO rather than wait: a deep knowledge base built over seven years of tracking, IPO liquidity of only 3-4%, and potential demand from early index inclusion. Risks include governance structure (concentrated voting power), financial complexity from xAI, environmental costs, and defense exposure. Position sizing and continuous communication with management are key. Institutional perspective bias: Baillie Gifford, as a long-term growth investor, is willing to accept extremely high valuations for extraordinary potential, but manages overall exposure through dynamic adjustments (e.g., reducing Tesla, partial profit-taking post-IPO).