The AI Arms Race Is Moving to Space | Brett Rentmeester on the Orbital Economy
Speakers
Summary
- The "Orbital Economy" Thesis: Space is no longer just about exploration; it is the convergence of AI, Energy, and Defense. The winner of the AI race will likely be determined by space-based capabilities (compute and energy).
- Energy Bottleneck: Terrestrial energy is constrained. Gas turbines are backordered until 2030. Space-based solar offers 5x efficiency and potentially 1/10th the cost due to constant sun and lack of atmospheric distortion.
- The "Toll Road" to Space: Reusable rockets (pioneered by SpaceX) have fundamentally changed the unit economics of orbit, creating a "toll road" business model for launch providers.
- Geopolitical Catalyst: Governments are treating space as a critical domain for national security ("Golden Dome" missile defense), ensuring sustained public funding alongside private innovation.
- 2026 Catalyst: A potential SpaceX IPO in 2026 is viewed as a major liquidity event that will bring massive attention and capital flows to the entire space sector.
Trade Ideas
"People are better off in the public markets probably buying a diversified mix of things acknowledging that nobody's going to be able to map who the winners and losers are." Because the sector has "valuation risk" and many startups have no revenue, picking individual winners is dangerous (binary outcomes). The safest way to capture the "Sector Lift" from a potential 2026 SpaceX IPO and the general AI/Space trend is through broad Aerospace & Defense ETFs. LONG. A diversified basket mitigates the risk of single-stock blowups while capturing the macro tailwind. Broad market downturns; sector rotation out of industrials.
Brett Rentmeester
Founder and Managing Director, Windrock Wealth Management
"The defense industry is funding a lot of these companies, doing projects with a lot of these companies... established defense companies." + "Government is intricately involved... it reminds me of the East India Company... backed by the royal family." The "Orbital Economy" is not just a commercial venture; it is a national security imperative. The US government will funnel capital through its "Primes" (Prime Contractors) to build the "Golden Dome" and secure orbital dominance. Lockheed Martin (LMT), Northrop Grumman (NOC), and RTX Corp (RTX) are the primary conduits for this government spending. LONG. These are the "picks and shovels" of the militarization of space, backed by guaranteed government contracts. Budget cuts or political shifts reducing defense spending; failure of legacy primes to innovate against agile startups.
Brett Rentmeester
Founder and Managing Director, Windrock Wealth Management
"We have energy issues on Earth... gas turbines are now in back order basically... until 2030." While the long-term vision is space-based solar, the immediate reality is a desperate scramble for terrestrial power to fuel AI data centers. A backlog until 2030 for gas turbines implies massive pricing power and revenue visibility for the dominant turbine manufacturers. GE Vernova (GEV) is the market leader in this specific hardware. LONG. A direct play on the "energy scarcity" theme mentioned as the bottleneck for AI. Regulatory shifts against fossil fuels; supply chain inability to fulfill the backlog.
Brett Rentmeester
Founder and Managing Director, Windrock Wealth Management
"Companies like Elon Musk, SpaceX have demonstrated that hey maybe you can have reusable rocket launches... it's kind of like owning a toll road to space." SpaceX is private (for now), making it inaccessible to most public investors. To play the "Toll Road" thesis—where launch providers charge rent for access to the orbital economy—investors must look to the next best pure-play competitor with proven launch capabilities. Rocket Lab (RKLB) is the only other entity with a consistent launch cadence and a growing "Space Systems" (satellite manufacturing) division. LONG. It serves as the public market proxy for the "reusable launch" and "orbital infrastructure" thesis. Launch failures; capital intensity; SpaceX dominance crushing competitors.
