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A
The space industry sits at the center of technological innovation, economic growth and national security. But as activity in orbit continues to expand, so do the opportunities and the challenges facing the sector. So are we still in the early innings of a new space age or are expectations running ahead of reality? I'm Alison Nathan and this is Goldman Sachs Exchanges. Joining me today to help unpack all of this are Eric Sparks and Michael Tarulli from Goldman Sachs's Global Banking and Markets Group. Eric is our head of Global Resilience, leading our coverage of space technology, satellite communications and national security infrastructure. And Michael is our global head of Aerospace and Defense, bringing deep corporate expertise and relationships with the world's largest companies in the sector. Michael, Eric, welcome to the program.
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B
Thank you for having us.
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C
Thank you, Michael.
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A
Let's just start first with the big picture here. We're obviously seeing tremendous growth in the global space economy right now. So talk to us about what's really driving that interest and that momentum.
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C
The single most important factor is the cost to launch a kilogram into space. So that cost during the height of the space shuttle era was about $55,000 per kilogram. That's down to $3,000 per kilogram today. So it's really democratized space. It's given access to space to almost every anyone that has a desire to be in space today. So it's no longer the domain of the richest countries and the largest companies. It's really opened up access. And what that's done is promote a significant amount of development, of investment and innovation that's just driving a lot of activity and further interest in space.
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A
And it's been that innovation that has driven that sharp reduction in cost. Talk to us about what are some of the major innovations we've seen.
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C
The key innovation has really been rocket reusability, and that's what's really brought down the cost of launch. That innovation in and of itself has brought down costs by 95%. And we're not done where we are right now. There is visibility to getting launch costs down to $1,000 per kg and eventually $100 per kg. At that level, almost anyone will have access to space.
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A
And when we think about the access, we're also thinking about what people are involved in this space. So it's traditionally been very government dominated, but now we are seeing obviously the private sector a huge component here. Talk to us about that evolution and what you've observed from your seat.
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C
Yeah, it started with governments because it was expensive, it was risky. What's happened really is today Most of spending in the space economy is really driven by commercial companies. About 80% today is driven by commercial companies. A generation ago it was 80% government. And again that's been driven by the steep reduction in launch costs, which has invited in a lot of new investment and a lot of new innovation that has just created a flywheel effect of attracting more investment and development.
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A
Eric, let me bring you into the conversation. When we talk about this emerging space economy, what does it actually consist of? We think of these rocket launches that we see on our screens. But talk us through the different aspects of this economy.
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B
It's been absolutely remarkable what the transformation has been. And it starts really with telecommunications. For example, on your iPhone you have now backup comms. You have this SOS function which will allow you to receive alerts in remote locations. But it goes beyond that to Starlink, which is providing you WI fi during your flight at basically real time speeds that you would get over broadband Internet. It goes to Earth observation. So being able to see what's going on in your Google Maps and getting more up to date maps at more regular intervals. And then look, ultimately it's going to get beyond orbit and beyond just supporting the terrestrial economy into space stations, into a lunar base, and then ultimately making humanity multi planetary.
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A
It's fascinating when we think about this potential scope of this. It's also fascinating to think about the size in terms of the dollar amount. A lot of people talk about this as a trillion dollar space economy. We've heard about that number for years. What are the latest forecasts and what do we actually need to see happen to bring those forecasts to life?
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C
Sure, I think we're right now it's about 625 billion. I think the market view, the consensus view is that we'll probably hit a trillion in the mid-2030s or 2040s or so. And again, I think it comes down to just reducing the cost of launch to achieve that. But I think it's a matter of when, not if.
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B
Absolutely. And so Mike really hit it earlier. What will open up this economy is increased access to space. So there are a number of companies that are working on providing increased capacity. There are service providers that then move satellites from where the launcher gets them into orbit, like into leo, into other parts of LEO and then ultimately potentially into GEO and beyond. LEO is the acronym for low Earth orbit. This has been a sea change and is one of the most important evolutions for what's gone on in space. Decades ago you had these high geo, large bespoke Satellites. You can remember sort of satellite communication where you'd have to put a dish on your roof and point it at a satellite in Geo. So what LEO does, and again, this has happened over kind of the last decade, is like literally move satellites closer to your terminal and so the latency is much lower. And so this enables much faster communication and opened up all these other possibilities for technology. But it all comes back really to launch and increased access to space.
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C
One thing I would just add to that is I also think at the other end of the spectrum, it's continued successful exits for investors, which is going to drive more capital formation and support more of that development.
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A
I do want to get into the investment side of all of this because ultimately when we think about investors trying to understand how to value these companies, it feels like a very difficult task. There's so many unknowns in the sector. How do you advise investors to think about that?
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C
Yeah, it's really difficult because many of these companies are early stage. They're very high growth. Some have unproven technologies and very limited customer bases. And it's very hard, I think, for investors to separate winners from losers or winners from those that are maybe a little bit more speculative. What we typically look at, and I think investors have been looking at is the quality of the backlog. They have the quality of the customer, the quality of the manifest. Because I think ultimately that's probably the key determining factor for success. It's really difficult for companies that are this early stage to really figure out what technology is going to be successful or not. And I think investors are looking to the customers to validate that that for them. And in many cases where we have customers that are national security agencies or governments, I think that even further reinforces the potential success of a company. But what people are really looking at, the specific metrics are revenue and revenue growth more than anything else because most of these companies are not profitable yet.
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A
And Eric, do you have anything to add to that? Because these are very long timeline, capital intensive projects.
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B
Sure. It is risk adjusted certainty on revenue. And so we'll take like Launch for example, which has been quite challenging actually. We've seen a lot of rockets blow up on the pad. And so investors quite rightfully heavily discount launch companies. Even though there is this great economic opportunity, launch is really, really hard. Whereas when you have more developed business models, you have bus companies that are making satellites that have already been on orbit and you're just kind of strapping on better payloads, providing better technology, better equipment, better observation capabilities, that's just less of a discount that you have to provide. And then you go back to those fundamental metrics. And what investors do is they take that backlog, they overlay it on their revenue expectations for however many years out you can see, and then you apply a multiple to it. And that's generally the approach we see investors take.
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A
And the other unknown or uncertainty around the space is, of course, on the regulatory side. You mentioned all these different initiatives. We often hear about a lot of junk in space. It's getting pretty crowded up there. What type of regulation do you think we need to see for the space economy to really reach its full potential?
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C
Michael, I think you hit the nail on the head. I think it really is regulating traffic. You've got, at this point, tens of thousands of objects operating in low earth orbit right now. I think the challenge is keeping them from colliding with each other because I think one collision creates a real risk of a domino effect in creating vast areas of space that just are not even accessible. So I think the real challenge now is regulating how objects are being controlled and avoiding collisions in space.
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A
And how do we actually see that being executed in practice given so many countries around the world operating in this low orbit space at this point?
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C
That is, I think, the fundamental challenge. I think on the one hand, the lack of regulation is what has really promoted innovation and access to space and all this investment that we're seeing. On the other hand, it's been really difficult to align all these various countries and agencies to agree on sets of protocols and standards for regulating space right now. So I don't have a good answer. But I think everyone is aware of the problem and recognizes that it needs to be addressed.
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A
And there is another component to all of this, of course, which is the geopolitical competition that exists across all of these different countries and in many ways is playing out in space. So how does that complicate the sector?
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C
Space is a critical war fighting domain today, full stop. Having assured access in space right now is as fundamental as having a standing army, a navy or an air force. And I think every country now that is playing on the global stage is investing around having access to space. I think it's going to become increasingly important. You're seeing how much the US is spending around initiatives like Golden Dome. China's spending $20 billion a year on space right now. They're actively arming themselves in space and preparing themselves to basically defuse or attack enemy satellites in space. It is a war fighting domain. There's an active war happening in the skies above us right now.
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A
That actually was a little scary, Michael. But thank you for clarifying that for us, Eric. I wanted to spend a little bit more time on this human element because there's so many commercial opportunities, there's military opportunities, as Michael just said. But of course, when you talk about launch, and that is what many people think of as the future of space, what is the strongest economic case for a human presence in space? Some of these initiatives that some of these companies are exploring and investing heavily in at this point?
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B
Yeah, look, there are some absolutely wild opportunities, and it's tremendous to be a part of it. So there are companies that are working on the evolution of the iss. And so we know that the ISS will demise in the coming years. And there are a number of companies that are putting up their own space stations. And for the first time, those space stations are going to be able to have commercial activities. And so maybe that's pharmaceuticals. It's testing new GPUs, it's making new products that we never even thought about because you can actually manufacture and test in zero g, which is pretty exciting. And then, look, ultimately it gets to a lunar base, a Martian base, so that we can start to do these ideas that people have been talking about in terms of mining asteroids, bringing back precious metals, and just other elements that are not really present here on Earth. And you just don't even have any sense of where that's going to go. But it's going to be pretty exciting, right?
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A
I mean, it's a wide array of opportunity you just discussed. Give us a sense of the timeline on some of these. How close are we to some of these opportunities?
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B
Look, I think in the next couple of years you're gonna start to see modules for new space stations and whether there are one, two, maybe three space stations that come in. We've already got companies that are starting to manufacture in space autonomously and then re entering Earth, which is really exciting. I think a lunar base is probably a decade plus off. It's a very complicated exercise. We have yet to land a person on Mars, but that's maybe the 2050 sort of scenario. So in space, things do take a long time.
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A
I cannot have a conversation, it seems, on this podcast without talking about AI. So I did want to ask, has AI changed the landscape and the opportunity set in the space as well?
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C
It definitely has. In fact, I think space was one of the earliest adopters of autonomous flight. If you think about just the requirements of operating in space, with latency of communications, limitations on bandwidth, some of the earliest things that were operating in space were doing so semi autonomously. Think about how many things are in space. As we mentioned before, navigating and avoiding collisions in space requires autonomous flight. You now have autonomous takeoffs and landings. You have autonomous navigation through space. So it's sort of fundamental to space right now. So the next step is, I think you've got autonomous edge computing where satellites are less so just focused on collecting information and transmitting that back down to Earth. What they're doing actually now is actually digesting that, analyzing that and making decision making on Earth a lot faster. That's all being driven by AI.
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A
Interesting. So just to close things out, let's look a bit further down the road. If we were having this conversation in 2050, Michael, what development in aerospace would you most hope had occurred and what development would most surprise people listening today?
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C
I hope we land people on Mars. I think that would be incredible for humanity to see that during our lifetimes. What I think will most surprise people, I think by 2050 the biggest companies operating in space won't be space companies. I think space is going to be fundamental to almost every business and I think it's very similar to what happened with the Internet. In the early 2000s. You had Internet companies and now the Internet is fundamental to every. I think that's what we'll see by 2050.
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A
Interesting. And that does surprise me. But perhaps it won't be surprising in 20 years. Eric.
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B
I think it's a next generation propulsion system that allows us to move faster really through the galaxy and people are working on this. I'm not sure what is even in development now is what ultimately we will find. But I'm confident that someone will find a solution that moves faster through the
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A
universe and who knows what that will bring. Thanks so much. It's rare that I get to have a conversation talking so much about the future. I appreciate it. Michael and Eric, fascinating.
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C
Thank you.
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B
Thanks.
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This episode of Goldman Sachs Exchanges was recorded on Tuesday, July 7, 2026. If you enjoyed the show, we hope you'll subscribe on Apple Podcasts, Spotify or wherever you listen to your podcasts and leave us a rating and comment. I'm Allison Nathan. Thanks for listening.
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D
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