Six years from now, the International Space Station (ISS) will be no more. Plans are in progress to abandon ISS in 2030, and to push the space station down Earth’s gravity well, to burn up in the atmosphere. But not to worry — even as the countdown to the ISS’s demise accelerates, the coalition of companies working to build a new international space station to replace it keeps getting bigger.
This initiative established by privately held Starlab with assistance from Northrop Grumman, Hilton Hotels, and Airbus, has roughly doubled in size over the last couple of months with the inclusion of Japan’s Mitsubishi, Canada’s MDA Space, and most recently, America’s Palantir Technologies (NYSE: PLTR).
Welcoming Palantir to the party
Fool.com contributor Geoffrey Seiler covered this story in June, noting that Starlab is bringing Palantir on board to help predict the maintenance needs of its new space station (which will launch in 2028), and use “data modeling … to enhance Starlab’s operations throughout the enterprise.”
That sounds like a valuable contribution. Building the original ISS cost upward of $100 billion and operating the space station costs NASA roughly $3 billion a year. When you consider the high cost of running the original space station, perhaps the biggest question about Palantir’s role in the Starlab project isn’t what its software can do for the station, but rather how much Palantir will contribute to the project financially.
On this subject, unfortunately, Starlab’s press release announcing Palantir’s participation was silent — suggesting that Palantir’s role will be more in the subcontractor line, and less that of a true partner in the project (even though the company is described as a “strategic partner”). Absent evidence to the contrary, investors should perhaps view Palantir’s involvement less as a true partner, with a financial stake in the venture’s success, and more like Coca-Cola being named the “official soft drink” of the 2024 Summer Olympics.
Which is to say, Palantir will probably make some money off of Starlab — but adding Palantir to the team probably doesn’t make Starlab a more likely replacement for the ISS.
Starlab’s competition
Speaking of which, it’s worth mentioning that despite Starlab dominating the headlines lately, in the race to replace ISS, it’s not the only space horse in this race. In fact, three other teams of companies (or single companies) are still vying with Starlab for the right to replace ISS. These include privately held Axiom Space (which has been talking about building a private space station longest) and also privately held Vast Space (a company founded by cryptocurrency billionaire Jed McCaleb).
At the same time, Starlab’s biggest competition probably comes from a different billionaire, Jeff Bezos, who is backing a project called Orbital Reef with his (many) billions of dollars and his Blue Origin space company. With Sierra Space, Redwire, and Boeing also involved in the project, Orbital Reef arguably commands the greatest financial heft, aside from Starlab — making it at least the second-most likely company to be able to bring a private space station project to completion. (In that regard, in March, NASA announced that the Orbital Reef project passed a major milestone in testing the life support system it plans to install on its space station).
What it means for investors
So which of these four teams is most likely to build a replacement for the International Space Station? Despite Palantir’s only incremental contribution to the effort, I still believe that the Starlab team has the most momentum, and that the hundreds of billions in annual revenue commanded by its backers (according to data from S&P Global Market Intelligence, Northrop, Airbus, and Mitsubishi combined generate annual revenue in excess of $230 billion — a sum even greater than Jeff Bezos’ net worth) give it the best chance of success.
Even if I’m wrong, though, the good news for investors is that with so many publicly traded stocks involved in this effort across multiple teams, whoever does end up building a new space station, the chances are very good that you’ll have the ability to invest in that winner.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies and S&P Global. The Motley Fool has a disclosure policy.
With Palantir on the Team, the Coalition to Build an International Space Station Replacement Just Keeps Getting Bigger was originally published by The Motley Fool
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