Jim Cantrell on founding Phantom Space, co-founding SpaceX, and the rise of orbital AI inference

you about Finn, the number one AI agent for customer service. If you want AI to handle your customer support, go to finn.ai. Uh, and without further ado, we've been running along, but we will bring in Jim Crantrell from the Phantom Space Corporation. Sorry to keep you waiting, Jim. Thank you so much for taking the time to join the show. How are you doing?

Uh, please, uh, you have a fascinating background. give us a little bit of your background leading up to this company and then I want to talk about how you're thinking about the business and also just the orbital economy more broadly.

Yeah. So I've been in the uh automotive and aerospace uh industries for north of 35 years and uh had positions everywhere from the French space agency to early SpaceX. I was the guy that took Elon to Russia to buy Russian missiles. And uh when that didn't work, we started SpaceX. And uh after that, I I'm on my 12th space or automotive startup. And Phantom Space is the last one of them. But uh several of them have gone public since then. And uh you know, Phantom Space was sort of the ultimate

uh of all these startups that that looking to solve the problem that really needs to be done.

Yeah. that that story of going to Russia to try and buy the ICBM has been has been told and written about in books, but what what does the current narrative get wrong? What's your side of the story? What were expectations like going into that meeting? Uh did you was it seen as a long shot at the time or uh did you think that it was likely to work?

Yeah. No, it was a complete long shot. You know when he when Elon called me he had just left PayPal

and had this idea of you know trying to inspire humanity to become multilanetary he still talks about

and he wanted to do what amounted into a stunt to to you know show that we could send creatures to Mars that turned into uh something that we put together which was a growth chamber to land on Mars on a lander and we needed Russian rockets to buy it. So by the time we got done dealing with the Russians they didn't want to sell it to us. they were just being Russians. And uh Elon announced to all of us in a sort of shocked way, we we we heard that he wanted to start the company SpaceX and build the rocket ourselves. So I will tell you that very few people gave us a snowballs chance in hell to make that happen. Now we we can see 25 years later where that ended up. But you know, everybody betted against Elon and the rest of us. and uh you know what the story's gotten wrong uh and what it gets right. What it gets right was you know this determination of this guy who knew nothing about rockets who decided to learn everything he could and he he got a bunch of uh space cowboys around him and most of us were sort of revolutionaries in thought at least and wanted to uh stick it to the system and do something that everybody said we couldn't do. What the story got wrong uh sometimes people write and say I was never part of it. I don't know why that got written in, but I was definitely employee and had found her stock in the whole nine yards. So, here I am.

There you go. Uh, what's the modern version of the the long shot in space? We've heard about colonies on the moon, colonies on Mars, space data centers. What do you think is the most practical problem right now in space that people are maybe undercounting?

So, I think there's three tracks that it's going down. One is is you know the military use of space which we see ongoing today right wake up and read the news every morning.

The second one is planetary settlement which is what SpaceX is trying to accomplish and everything that Elon does I believe is aimed at that planetary settlement goal. And then the third is kind of more recent even though I've been thinking about it for almost a decade is putting compute in space. So now AI is the killer app that enables this much like the internet came along was the killer app that enabled Starlink. So I think what we'll see is the next generation of AI in space, these so-called space data centers, but not in the way that the the common narrative is going to portray it.

Okay. Uh how will it be different? I I mean Jensen Wong at GTC earlier this week was standing on stage saying that, you know, he will be providing chips. Elon has given some uh some outlines around what that might look like. We've talked to StarCloud, a startup that's planning to put data centers in space. There's a whole bunch of other people that are approaching this problem, but how do you think people are getting it wrong and and how do you think you fit in?

Yeah. So, you know, Nvidia to just address that is is nailed the silicon, right? So, so they're they're going to be the winners on that, I believe. I think so.

Among others, right? But they're going to be one of the primary winners and and thank you for doing that, Nvidia. Uh, number two is there's going to be a camp that I think is mostly hype that says we're going to put, you know, these these large language model hyperscalers into orbit.

If I'm generous, that's maybe 20 years out, right? And and it's like flying a big factory on a on a huge rocket that doesn't exist there.

So everything that's going to happen in the future is going to be distributed data centers on a much smaller scale. Everything's more expensive, right? So we're at least 10 times, maybe a hundred times more expensive to do something in space today. Uh so so the the the the really killer app I see is to put AI inference in orbit close to where the data tsunami is being generated and it's today it's a tsunami and tomorrow it's going to be a mega tsunami and what the problem is is is being able to get that data back. So there's there's this this funnel that restricts how much of that can get back. So AI is a natural way to reduce that data load and get it back to the earth. Maybe later we'll solve the the the issues with uh you know with with with the earth uh power and heating but you know Phantom you know we've been at it for 10 years one form or another writing patents writing about it speaking about it. It's nothing new for us and we're putting together micro data centers to address exactly this along with with with data back hall from the satellites to uh really exploit what we think is the next killer app there and create a space app store environment in an ecosystem for others to implement their their creativity on.

So where do you think in the supply chain or the rest of the orbital economy uh there is enough maturity that you will never really need to uh build? I imagine you're not going to build a new rocket. Uh but are you planning to do connectivity through Starlink? Like where will the partnerships happen? And then where will your you know your core value prop live within the supply chain?

Yeah, it's it's a great question because this is exactly where I think all the the differences between the approaches become evident. So it's my belief that uh in order to be successful in this you really have to vertically integrate much the way we did in the early days of SpaceX. We saw that building the rocket and building their satellites and then implementing in their case Starlink and now you know their version of XAI in orbit. You really have to have that and you know SpaceX is is going to dominate a lot in that phantom space. We have exactly the same playbook. So those who don't have that vertical integration are always going to be at the risk of what amounts to a very scarce launch supply. Even today, you know, there is a perception that there's more launch than we need. And it's not true at all. It's very scarce. You know, Phantom were building something we call the Daytona, which is quite a bit smaller than anything SpaceX builds. So we're more the taxi, they're more the, you know, the freight liner. And uh so so you know, we find a real market for that. People are buying our things. And there aren't that many people that can actually build launch vehicles that work. It's a really tough business and it takes 5 to 10 years. So, so that's going to always be scarce. The rest of it is really a matter of supply chain control.

So, so the uh you know, the silicon, Nvidia, uh you know, all the rest of the satellite parts, suppliers, but you know, you have to have somebody put it all together, operate it, and manage it. So we think of ourselves as building the railroad to space and then ultimately a space app store on top of it so that so that people can build their own code.

Yeah. Uh talk about some of the trade-offs of the launch vehicle decisions. Uh are you thinking about reusability? Is that less of a factor at this scale? Um how frequently do you want to be launching? Like I imagine taxis they go everywhere. They launch from everywhere. Like how else like play out the taxi analogy for me a little bit more. Well, so, so launch is like the critical cost of getting any data system into orbit, period. And so, you know, it's it's incumbent on companies to control that cost. And if you can build it internally, if you can gather the capital and the talent to do it, you're in better shape. So, there's there's a trade on getting that cost down between building them super large like Starship

and reusability and then mass production. So mass production like the car you drive probably cost $100 million and you may be paid $100,000 for it

and there's a huge cost reduction through the sheer number. So at Phantom we're going to apply both reusability and the mass manufacturing because we're smaller we can do that whereas Starship as an example uh won't necessarily be mass manufactured but probably mass used.

So reusability is a core thing more for the the logistics of these things. And then the other side of it, here's the other choke point in the business is launch sites. We are really out of range capacity, launch range capacity in the United States. And we will be, I think, at that limit within 5 years. And so companies that control that range capacity are going to be in a position to control, you know, the railroads or the shipping lanes as it were.

Interesting. So are you looking

who's working? What's the process to create more capacity?

So uh it's very complicated. is very bureaucratic and it's very political. So we have uh five different launch ranges in the United States. Yeah, exactly. Just what

music to my ears.

Yeah. Right. So most of them are all federal ranges that that we built during the Cold War. And there's one in California, one in Florida. We we know at least about the one in Florida very very nicely, King Canaveral.

And so there are so many pads you can put on there. Most of what we're using today is legacy from what what was built in the Cold War. and we're were grandfathered into the, you know, the the p the the the bureaucratic process that approved those pads. So any new ranges, you're going to run into huge opposition. There have been people tried to build new ranges on the coasts of of this country and everybody not in my backyard comes out of their home to to oppose it, right? And even in California at Vandenberg. Yeah.

Uh you know, SpaceX recently got into a lawsuit. we had about half their capacity which was governed ultimately by the coastal commission in California and uh you know SpaceX had to sue and they got a little bit more capacity but that that's what we're heading into. So that's why you see these launch ranges around the world coming into play

and the problem for US companies is we're restricted from taking our launch vehicles to these foreign countries without government approval.

Yeah. Yeah. It's so tricky because I I can imagine living next to uh you know a launch pad and the first time the rocket goes up you're like wow that was amazing and then if it's like we're going to be launching those every 20 minutes you're like my windows are shaking a lot I actually would like the the novelty wears off pretty quickly so yeah and so and so yes obviously as a country we need to figure out where these go that are not disruptive and are scalable and are tied to the supply chain maybe actually near railroad. Who knows? A physical railroad.

Give us uh give us any predictions around uh the moon economy.

I was going to say moon

over the next

Yes.

decade.

Yeah. I have to say I'm surprised by the by the SpaceX pivot to the moon.

Okay.

Um it's been something, you know, since I was first in this business that a lot of us saw as a logical pivot and uh there was it was almost like a religion between do we go to the moon first? Do we go to Mars?

So you thought it was logical like 20 years ago, right?

Yeah. And so you're surprised at how late the pivots happen.

Yeah.

Uh it it doesn't really matter honestly in terms of their technical capability. It's it's it's more incremental in terms of the development of the technology which is probably why they did it. I really don't know why they did it. It could be a business decision. There's certainly I think a more near-term economy there. I think of Mars, you know, as as being so far away eventually that economy will have to form on its own. kind of like this new world where we all sit formed as an independent economy from Europe 500 years ago it began forming and Mars someday will have its own manufacturing bases and you you know you might have products labeled made on Mars right but that's a longer term thing and uh that's really where Elon's mind always was you know from the early days that I was with him that it was all about Mars and to me the moon's just a stepping stone on on that way and I think there's a lot of people who see that as a you know sort of an effectively a theological choice. Uh where it's really not. It's it's just a technical issue.

Mhm.

Economic opportunities on the moon.

Yeah.

That you think are interesting.

We've heard about regalith and the and and maybe like a mass driver, but there's so many opportunities obviously besides tourism.

The most obvious one is helium 3. So this is pushed out by the sun. There's something like 18 kg of it in the United States and it's a strategic resource. It's a byproduct of nuclear weapons manufacturing. Now, what are you going to use it for? Well, you can use it for a couple of things. Clean fusion energy. It's one of the few fuels that doesn't create radioactivity as a byproduct. So, that's obviously desirable, right? The second part is for uh quantum computing, which a lot of these have to be near zero. So, this is one of the few substances that you can cool to near zero temperature and the other is an absolute zero in temperature. So there there's a huge demand on that. Now once you start mining it, does that you know that price collapse? Probably to some degree. The second one that I see is this this mineral this rare earth mineral kinds of deposits. And we honestly don't know enough about what's up there. We have a pretty good idea from the Apollo missions, but there's probably a lot of rare earth deposits. My guess um and I'm no geologist, but it I would guess there's probably some rare earth minerals that you know mining from the moon, which would be more palatable than tearing up our beautiful Earth would be as long as we can solve the transportation problem. It all comes back to the rocket by the way.

Yeah, makes a lot of sense. Uh well, thank you so much for taking the time.

Yeah, great. Congratulations. And uh we'll we'd love to talk to you soon.

Yeah, come back soon.

Have a good rest of your day, Jim. Let me tell you about Cisco. Critical infrastructure for the AI era. Unlock seamless real-time experiences and new value with Cisco. And let me also tell you about Console. Console builds AI agents that automates 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. And without further ado, let's bring in Tom H from GV. Tom, how you doing?

What's going on?

Hey guys, can

we could hear you for a second. Can you hear us?

You're back.

You're back. Where are you calling in from? Can you hear us? No. Yes. No.

Check.

It's okay.

Check.

Can you hear this? I'm going to tell you about Sentry. Sentry shows developers what's broken and it helps them fix it fast. That's why 150,000 organizations use it to keep their apps working. Could you hear that? Because I could also I can also potentially tell you about the New York Stock Exchange. Uh because if you want to raise the cap if you want to raise capital, Tom, you got to do it at the New York Stock Exchange. I'm sure a lot of your companies are aiming for IPO. Let's get them live on the exchange. We'll

get Tom back as soon as he's ready.

There is some breaking news that we do got to talk about which is that Jeff Bezos more fired up than a personalized ad. Okay, breaking news.

Jeff Bezos in talks to raise a hundred billion for AI manufacturing fund. The Amazon founders traveled to the Middle East Singapore in fundraising effort linked to project Prometheus.

That is incredible. We have the red lights breaking news. uh advanced talks. I don't care if it's just advanced talks. I'm hitting the relations to Jeff Bezos.

He's meeting with some of the world's largest asset managers to raise funds for the project. A few months ago, he traveled to the Middle East to discuss the new fund with sovereign wealth representatives. More recently, he went to Singapore to raise funding for the effort as well.

Uh he's it's being described as a manufacturing transformation vehicle.

I going up against TK, right? I mean TK is not as directly focused on manufacturing like this something as

vehicle right

no no he's saying manufacturing transport like it's a vehicle a fund for transforming manufacturing

yeah yeah yeah it's like an investing vehicle

it's aiming to buy companies in major industrial sectors such as chipmle aerospace let's try again with Tom get out of here Tyler it's Tom time

here we go hey Tom can you hear us

oh No, we don't have audio. We don't have audio.

Okay. Okay, guys. Try it out. Nothing.

Okay. We We You can hear us. We can't hear you, but we can tell you about this post that we enjoyed from La. Got my horse to water. Now for the easy part. I'm going to continue. Uh, the fund is aiming to buy major industrial sectors laughing about that

such as chipm, defense, and aerospace. It would dwarf the size of some of the world's largest bio funds and rival Soft Bank's hundred billion dollar fund. I got to wonder how much how much do you think uh how much do you think Jeff is pitching in himself? I could see him, you know, anchoring. He's like, I'm good. I'm good for 30, you know, something in that range.

Yeah.

Uh

yeah. Yeah, he's he's got some fun stuff.

But this is such a white pill.

Yeah. Why? I mean the whole this is like you know we we need to manu we need to manufact you know basically we need to re-industrialize America we're not going to do it by just copying everything from the past there's some element of transformation that needs to happen as well as new efforts

and uh this is uh this is tremendous news

yeah and I mean there has been like a venture capital boom in re-industrialization but most of the funds that we talked to that are in that category are 50 million, couple hundred million, certainly nothing at this scale. And this has got to be uh incredible news for uh the the founders that we talked to that are part of the re-industrialization effort because they they they have a new potential investor. Uh did you see that OpenAI has acquired Astral who will be joining the codeex team? So finally, OpenAI has Astral Codeex, which of course is a great play on Astral Codeex 10, the uh the blog, which has some fantastic articles. Let me tell you about Octa. Octa helps you assign every AI agent a trusted identity. So you get the power of AI without the risk. Secure every agent, secure any agent. Uh will open AAI increase the cost of chat GBT? This is a Kelshi market out there. It's at a 46% chance. If either ChatGBT Pro or Plus have a price increase after January 2nd, 2026 and before January 1st, 2027, so in the

based on the current pricing of $20 a month and $200 a month.

What do you think? I I feel like I I this isn't financial advice, but I feel like they're not going to move the price points because they're focused on so many other things.

Yeah. The only the only thing is I could imagine an an additional plan on top of it. Yeah, but that would be an incremental plan. Max is right there. We got pro, we got plus, we got pro. Sign me up for the max plan. Uh, and I think they also have a light plan and and I I would imagine go. Yeah. So, I would imagine that there's more tiers within there. At the same time,

give Tyler the goat.

Ripping the band-aid off of price adjustments is extremely painful. And the probably the earlier you do it, the better. Like Netflix. Yeah. Yeah. Like