S&P Global (SPGI) Orbit as the Next Data Frontier: Capital Flows, Risk, and Realities summary

Market overview and recent developments

• SpaceX's IPO in early 2026 raised $86 billion, over half of the $146 billion total U.S. IPO proceeds in H1 2026, catalyzing renewed interest and capital flows into the space technology sector.

• Space technology M&A and fundraising reached $338 billion across 193 transactions in H1 2026, up from $22 billion in H1 2025, with SpaceX's $250 billion merger with xAI and Amazon's $11 billion acquisition of Globalstar as major highlights.

• Amazon's acquisition of Globalstar and Rocket Lab's $8 billion purchase of Iridium reflect a trend of vertical integration and competitive positioning against SpaceX in satellite broadband and launch capacity.

• The new space economy is driven by lower launch costs, reusable rockets, and the proliferation of small satellites, enabling commercial opportunities beyond traditional government-led programs.

• The number of satellites in orbit has surged to about 17,000, with Starlink accounting for two-thirds, and filings suggest ambitions for over 100,000 satellites by 2033.

Satellite broadband and market dynamics

• Satellite broadband has grown from 23,000 customers in 1998 to over 3% U.S. market share in 2026, driven by Starlink's rapid expansion and price competition.

• Starlink's ARPU is declining as it competes for market share, with U.S. rates as low as $30/month, and EBITDA margins in the 60% range projected for 2025.

• Satellite broadband is most prevalent in large, sparsely populated countries, serving rural areas where terrestrial infrastructure is uneconomical.

• LEO satellites enable lower latency and higher speeds compared to legacy GEO satellites, with Starlink operating about 17,000 subscribers per satellite.

• The cost to build and launch a LEO satellite is about $1.4 million, with a typical five-year amortization, compared to $500,000 for a terrestrial tower with a 30-year lifespan.

IoT, edge computing, and new use cases

• Since 2019, dozens of startups have launched small LEO satellites for IoT, with 67% of oil and gas enterprises using satellite connectivity, mainly for remote asset monitoring.

• CubeSats have become the standard for small satellites, offering lower costs and shorter lifespans than traditional GEO satellites.

• The war in Ukraine accelerated the use of commercial satellites for military and open-source intelligence, with Starlink essential for drone navigation.

• FCC filings in 2026 show a surge in plans for orbital data centers, with ambitions for up to 1 million units, driven by AI's energy demands and the promise of space-based cooling and solar power.

• Space edge computing is emerging, with initial data processing in orbit to reduce downlink constraints and support Earth observation and lunar operations.