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Investing in Space: Who wins in the Elon Musk versus Jeff Bezos moon race

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A variation of SpaceX’s Starship rocket for NASA’s HLS program, left, and Blue Origin NASA SLD lander rendering.
NASA; Blue Origin

CNBC’s Investing in Space newsletter offers a view into the business of space exploration and privatization, delivered straight to your inbox. CNBC’s Michael Sheetz reports and curates the latest news, investor updates and exclusive interviews on the most important companies reaching new heights. Sign up to receive future editions.

Overview

The billionaire race to the moon is on, but it doesn’t matter whether Elon Musk or Jeff Bezos gets there first – either way, NASA wins.

Last week the U.S. space agency announced Bezos’ Blue Origin had won a $3.4 billion contract to build an astronaut lunar lander. The company pledged to invest more than that amount of its own funding. Blue’s award was widely viewed as a boon for the space industry, but the lunar-scale battle of egos has a variety of advantages for government-backed efforts.

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On the criteria of becoming the first to put astronauts on the moon, the “race” metaphor doesn’t apply here: NASA awarded Musk’s SpaceX a contract to use Starship for its Artemis three and four missions. Blue’s lander is scheduled for its first crew mission on Artemis five. And NASA has already paid out nearly $2 billion to SpaceX under its contract, granting the company effectively an 18-month head start.

But this race is a marathon, and it’s now underway.

Both companies will first aim to land uncrewed demonstrations on the moon in the next couple of years. Flying early missions successfully will build NASA’s trust and confidence in the companies’ respective vehicles – and help them toward the race’s ultimate prize (i.e. follow-on contracts).

Both SpaceX and Blue Origin heavily self-capitalize, meaning NASA can partner on the projects without significant increases to its annual budget. (NASA acknowledged in public documents that both companies underbid their competitors to secure the contracts.)

The private funding also means NASA is insulated from excessive costs. The lander contracts are filled with milestones the companies must hit in order to see paydays, and the fixed-price nature of both awards means that any cost or delay overruns are absorbed by the private ventures, rather than taxpayers – a contrast to the billions in over-spending of NASA’s existing SLS rocket and Orion capsule programs for Artemis.

The projects will also grant invaluable experience to the companies’ talent. The pair each count national workforces in the 10,000-employee range, and the scale of the lunar Artemis lander projects has the companies hiring even more. Just as talent who worked on rockets that reached orbit are highly sought after in the industry, the folks who work on these vehicles will be valuable to companies and organizations for years to come.

I’ve spoken to dozens of space executives in the past year whose companies are not directly involved in the Artemis program, but are already reaping the benefits of the excitement and interest of establishing a “cislunar economy.” The ripple effects of the Artemis program, powered by the dual engine (so to speak) of Musk and Bezos, will push the technological boundaries in space and, in turn, benefit life on Earth – as has happened countless times before in the industry’s history.

As NASA chief Bill Nelson told my colleague Morgan Brennan yesterday, “We are a capitalist economy” and “people take risk; often where there is risk there is high reward.”

What’s up

  • Virgin Orbit shuts down after bankruptcy sales. Rocket Lab, Stratolaunch and Vast’s Launcher each bought pieces of the former rocket company’s facilities and assets for a combined $36 million. – CNBC
  • SpaceX’s 10th human spaceflight reaches the ISS for Axiom, with the Ax-2 mission carrying four people for an eight-day stay at the space station. The flight marks Peggy Whitson’s return to space, and the first orbital trip of businessman John Shoffner as well as two Saudi astronauts. – CNBC
  • SpaceX aims to join FAA in fighting environmental lawsuit that could delay Starship work: In an intervening motion, SpaceX requested the federal court allow the company to join the FAA as a defendant against the lawsuit. The company said the FAA does not adequately represent SpaceX’s interests, and outlined the stakes at hand given the lawsuit could heavily delay development of its monster rocket. – CNBC
  • Astranis’ first commercial satellite working, with service to Alaska expected to begin in June: The alternative satellite broadband company gave a post-launch update on Arcturus, with CEO John Gedmark saying “we have a new way of connecting people in some of the most remote and underserved parts of the world.” – CNBC
  • SpaceX launches additional OneWeb and Iridium satellites, with its Falcon 9 rocket flying the company’s 34th launch of the year. The company has kept up a blistering pace of a launch every four days on average in 2023. – SpaceflightNow
  • Starlink connects Mexican villages through new program: SpaceX’s satellite internet business announced its inclusion in the “Internet para Todos” program, saying the company is helping bring service to about 3,300 communities, representing about 1 million people in the country. – SpaceX
  • AT&T petitions the FCC to block the SpaceX and T-Mobile direct-to-cell plan, in a filing that argues that the companies’ strategy to use Starlink is “woefully insufficient” in avoiding interference with systems on the ground. – Ars Technica
  • NASA’s Lunar Reconnaissance Orbiter spots ispace lander impact site on the moon’s surface: The LRO team said it will continue to image and examine the crash landing location in the coming months. – LROC
  • Federal agencies studying safety of recently popular rocket propellants: The FAA’s space advisory group said the regulator is working with NASA and the Space Force to study the safety and explosive nature of rockets that use liquid oxygen and methane as propellants, with five major rockets in development that feature the new mixture. – SpaceNews
  • Umbra and Ursa collaborating on satellite radar imagery:  The companies are partnering to have Umbra analyze data from imagery collected by Umbra’s constellation of synthetic aperture radar (SAR) satellites, in an effort to further intelligence gathering. – SpaceNews
  • The Spaceport Company demonstrates offshore launches, using a platform in the Gulf of Mexico to launch a quartet of sounding rockets, in a proof-of-concept test. – SpaceNews

Industry maneuvers

  • European Commission approves Viasat acquisition of Inmarsat, paving the way for the deal to close. The company said it expects to complete the translation by the end of the month. – Viasat
  • The European Investment Fund puts about $64 million behind Alpine Space Ventures, a Germany-based venture fund that focuses on the sector. – Alpine
  • Terran Orbital aims to raise $37 million in direct offering, with the spacecraft builder saying the round of common stock is expected to close by May 30. – Terran Orbital
  • Australian startup Fleet Space raises $33 million at a $232 million valuation: The company, which aims to use satellites to detect mineral deposits on Earth, raised the funds from Blackbird, Grok Ventures, Alumni Ventures, Hostplus, TelstraSuper, Bonding Partners and Pavilion Capital. – Fleet
  • Zeno Power Systems wins $30 million Air Force award for a nuclear-powered satellite, with the contract for delivery by 2025. – SpaceNews
  • Ursa Major revealed new “Draper” rocket engine and an Air Force contract, as the propulsion company unveiled a new hypersonics-focused product. The new engine comes under a Air Force Research Laboratory contract, and the company plans to test fire the engine within a year. – Ursa
  • In-Q-Tel has made multiple investments in Stoke Space, with the strategic investor of the U.S. intelligence community interested in the capabilities of the company, which is developing a fully reusable rocket. – TechCrunch
  • U.K. startup Satellite Vu raised $15.8 million in venture funding, from investors including Molten Ventures, Lockheed Martin Seraphim, A/O Proptech, Ridgeline Ventures, Earth Sciences Foundation and Stellar Ventures. – Satellite Vu
  • Space video startup TRL11 raises over $3 million from venture and angel investors, including BoostVC, Wonder Ventures, Anorak Ventures, Geek Ventures, Space Cadets and Launcher’s Max Haot. – TRL11

Market movers

  • Virgin Galactic attempts first spaceflight in nearly two years. The Unity 25 mission marks the final verification step before beginning commercial flights. – CNBC
  • BlackSky and Spire partner on maritime monitoring service, with the companies saying they will create a combined “Maritime Custody Service” that will automatically track more than 270,000 ships around the world. – BlackSky
  • Planet partners with the United Arab Emirates to build climate risk platform: The satellite imagery company signed with the UAE’s space agency to build a regional measure of how climate risks threaten the country. – Planet

Boldly going

  • Thomas Zurbuchen named director of ETH Zurich Space, returning to his home country of Switzerland after leaving his role as NASA’s science chief last year. – ETH
  • Andrew Rush joins Massachusetts-based Copernicus Space Corporation as President and CEO. Rush joins Copernicus, which is building small space probes, after leaving his role as COO of Redwire in November. – Copernicus
  • Melissa Quinn, leader of Spaceport Cornwall in the U.K., is stepping down: Quinn is leaving her role at the end of the month for another job. – The Independent

On the horizon

  • May 25: United Launch Alliance test firing Vulcan rocket’s Blue Origin engines in a preparation for launch from Florida.
  • May 25: Rocket Lab’s Electron launching NASA’s TROPICS mission from New Zealand.
  • May 25: NASA Aerospace Safety Advisory panel public session.
  • May 26: SpaceX’s Falcon 9 launching Arabsat’s BADR-8 mission from Florida.
  • May 30: SpaceX’s Falcon 9 launches Starlink mission from Florida.
  • May 31: SpaceX’s Falcon 9 launches Starlink mission from California.

 

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Lenders Rally After India’s Central Bank Eases Investment Curbs – BNN Bloomberg

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(Bloomberg) — Indian banks and shadow lenders rose Thursday after the country’s central bank eased capital requirements for a unique type of investment, a move that may free up more funds for loans.

The gains came after the Reserve Bank of India issued Wednesday modified rules on lenders’ required provisions for exposure to alternative investment funds, or AIFs, that invest in the lenders’ borrowers. Under the new policy, a lender needs to set aside capital only for the amount the AIF invested in the debtor company, and not the entire investment of the lender in the AIF.

Shares of Piramal Enterprises Ltd., which reported among the biggest provisions for such investments, closed 1% higher after rising as much as 6% during the day. A gauge of financial services firms climbed 1%, the most since March 1.

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Lenders led the rally in the broader market, with the NSE Nifty 50 Index registering its best day since beginning of the month.

The RBI’s softening stance came after industry players raised concerns over clarity and uniformity after it announced in December restrictions on lenders’ exposure to AIFs that hold stakes in their borrowers. The latest move will likely help firms including Piramal, HDFC Bank Ltd. and IIFL Finance Ltd. reverse some of their relevant provisions made previously, according to analysts at Citigroup Inc. and Jefferies Financial Group Inc.

Read more: India’s Crackdown on Financial Risks Puts Industry on Watch

“Select private banks and NBFCs like Piramal had provided for their entire AIF exposure during 3Q and could see some write-backs in 4Q if they decide to reverse the excess provision,” Jefferies analyst Bhaskar Basu wrote in a note.

Regulators introduced a flurry of new rules last year to prevent a buildup of financial stress at a time when India’s economy remained resilient in the face of rising interest rates, slowing global growth and unabated geopolitical tensions.

©2024 Bloomberg L.P.

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What is Islamic halal investment and why is it on the rise?

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The global Islamic halal economy is set to reach a market value of $7.7 trillion by 2025, more than double the $3.2 trillion it reached in 2015 and significantly higher than the $5.7 trillion it was valued at less than three years ago in 2021, according to industry experts.

A report by the General Council for Islamic Banks and Financial Institutions revealed last year that the global Islamic funds market has grown by more than 300 percent over the past decade, with nearly $200bn now under management globally.

The statistics depict a rise in both demand for halal – or “sharia compliant” – investments and opportunities.

Investing is permitted under Islam, but certain aspects of investment practice – such as charging or paying interest – are not. This has traditionally meant a lack of opportunities for Muslim savers and investors in the past.

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What is halal investment?

Halal is an Arabic term meaning “permitted” and stipulating that:

  • Transactions cannot involve “riba” (interest).
  • Investments must not be made in “haram” (unlawful) assets or commodities such as pork products, alcohol or military equipment, among others.
  • Investments cannot be made based on “gharar”, which has been described as “highly uncertain transactions or transactions that run contrary to the idea of certainty and transparency in business”.

“Halal investment is basically managing your money and finances in line with your faith,” Omar Shaikh, director of Islamic Finance Council UK (UKIFC), told Al Jazeera. “Muslims believe that earning money in a way which is halal is better than earning money (even if that is more) in a way that is harmful to society and against the morals of the religion.”

Umar Munshi, co-founder and managing director of Islamic finance group Ethis, said sharia compliance is key, but institutions and investors looking for ethical investments need to go even further to ensure a business is completely ethical.

“The actions of a business must not have a negative impact on society or the environment,” Munshi told Al Jazeera. “So it’s not only compliant, but refraining from having a negative impact. Investing in a tobacco company, for example, may be sharia compliant, but it’s not good for society.”

How does halal investment work?

One example of halal investment is Islamic business financing, which works using new models of profit-sharing, sharia-compliant insurance and sukuk, an Islamic financial certificate that represents a share of ownership.

Unlike with conventional bonds – a form of IOU that investors can buy in order to receive interest payments – sukuk investors receive partial ownership of a business and then receive profit payments, which are generated over time. These payments are made instead of interest in order to ensure sharia compliancy.

“Islamic finance as a sector is barely 30 years old, with the past 15 years seeing the most development,” Shaikh from UKIFC said. “It takes time to educate and create awareness and as this has happened, more banks have focused on servicing the demand for halal investing. This in turn helps to create more products, which then creates more demand.”

Stock markets used to be the traditional modes of investment for many [Marcin Nowak/Anadolu via Getty Images]

A Goldman Sachs report published in December 2022 estimated that by 2075, five of the world’s 10 largest economies – India, Indonesia, Nigeria, Pakistan and Egypt – will have Muslim populations amounting to more than 850 million people.

As the population rises, so does its demand for financial products. According to the State of the Global Islamic Economy Report 2023, published by research group DinarStandard, some $25.9bn was invested into sharia-compliant investments in the financial year 2022-23, marking a 128 percent year-on-year growth.

“In general, it [halal investment] is on the rise. People are a lot more educated and more aware of how their dollar impacts the socioeconomic landscape globally,” said Siddiq Farid, co-founder of SmartCrowd, a real estate investment platform based in Dubai.

“They are a lot more cautious, too, hence leading to more ethical investing, which halal investing is a big component of. It’s on the rise, particularly around the younger generation. The millennials, they are a lot more aware socially. People realise exactly where their money is going and how it’s being used.”

An increase in opportunities for halal investing and their ease of access are also cited as reasons driving the rise in demand.

Israel’s war on Gaza and its impact

More recently, the rise in demand for halal investments has received an additional boost as consumers boycott brands seen as supporting Israel and its war on Gaza.

The war, which has seen more than 32,000 Palestinians killed by Israeli attacks in Gaza, has “adjusted” the mindset of these investors, Farid said.

“Halal investment has been increasing steadily and it has accelerated further in the past six months, mostly among millennials and people under 40,” he said.

“But in the past, it’s more of these people just looking for something halal. As long as it’s not haram, it’s fine. Now, there’s more awareness of not only halal, but halal aligned with values and faith. All these boycott movements have got people much more aware that something may be halal, but you might not necessarily want to use it, be associated with it or invest in it.”

bds
The Boycott, Divestment and Sanctions (BDS) movement has made many people consider where their money goes before they spend or invest it, say experts [Martin Pope/SOPA Images/LightRocket via Getty Images]

How has technology contributed to the rise of halal investing?

FinTech Magazine reported in December last year that while Muslims make up nearly a quarter of the world’s population, barely one percent of financial assets qualify as sharia compliant. This is set to change, say experts, with the arrival of “fintech” – financial technology that can make investing much more accessible for ordinary consumers and individual investors.

“Muslims are generally not as well educated when it comes to investing, and this is partly due to a lack of available options for them as Muslims. Even basic information pertaining to sharia-compliant investments is often not available to most of the Muslim population,” said Ibrahim Khan, co-founder of the online financial platform Islamic Finance Guru, in an interview with FinTech Magazine.

However, the rise of social media has contributed to an increased awareness and significant growth in sharia-compliant finance. In addition, fintech has made halal investment options, which are often much more convenient and easy to use with a smartphone or laptop, more accessible.

Consultancy group McKinsey & Company published research in January this year showing that “revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2023 and 2028”.

“Your phone is often physically the closest thing to you. Fintechs are able to start from this paradigm and build solutions that are efficient and enhance transparency and choice for retail customers. This is where a lot of the action is at. Many banks are now creating fintech-based solutions or acquiring fintech players,” said UKIFC’s Shaikh.

Munshi added the selling point for fintechs is the age of the target audience.

“The younger generation is more open to investing online,” said Munshi, whose company operates an online platform and community for alternative finance and investment opportunities.

The same research by McKinsey & Company showed that the fintech industry raised record capital in the second half of the 2010s. Venture capital funding grew from $19.4bn in 2015 to $33.3bn in 2020, a 17 percent year-over-year increase.

As of July 2023, publicly traded fintech companies had a combined market capitalisation of $550bn, double that of 2019, the research said.

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Amazon completes $4B Anthropic investment to advance generative AI – About Amazon

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Amazon concludes $4 billion investment in Anthropic.

Customers of all sizes and industries are using Claude on Amazon Bedrock to reimagine user experiences, reinvent their businesses, and accelerate their generative AI journeys.

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The work Amazon and Anthropic are doing together to bring the most advanced generative artificial intelligence (generative AI) technologies to customers worldwide is only beginning. As part of a strategic collaborative agreement, we and Anthropic announced that Anthropic is using Amazon Web Services (AWS) as its primary cloud provider for mission critical workloads, including safety research and future foundation model development. Anthropic will use AWS Trainium and Inferentia chips to build, train, and deploy its future models and has made a long-term commitment to provide AWS customers around the world with access to future generations of its foundation models on Amazon Bedrock, AWS’s fully managed service that provides secure, easy access to the industry’s widest choice of high-performing, fully managed foundation models (FMs), along with the most compelling set of features (including best-in-class retrieval augmented generation, guardrails, model evaluation, and AI-powered agents) that help customers build highly-capable, cost-effective, low latency generative AI applications.

Earlier this month, we announced access to the most powerful Anthropic AI models on Amazon Bedrock. The Claude 3 family of models demonstrate advanced intelligence, near-human levels of responsiveness, improved steerability and accuracy, and new vision capabilities. Industry benchmarks show that Claude 3 Opus, the most intelligent of the model family, has set a new standard, outperforming other models available today—including OpenAI’s GPT-4—in the areas of reasoning, math, and coding.

“We have a notable history with Anthropic, together helping organizations of all sizes around the world to deploy advanced generative artificial intelligence applications across their organizations,” said Dr. Swami Sivasubramanian, vice president of Data and AI at AWS. “Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI. Generative AI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next.”

Global organizations of all sizes, across virtually every industry, are already using Amazon Bedrock to build their generative AI applications with Anthropic’s Claude AI. They include ADP, Amdocs, Bridgewater Associates, Broadridge, CelcomDigi, Clariant, Cloudera, Dana-Farber Cancer Institute, Degas Ltd., Delta Air Lines, Druva, Enverus, Genesys, Genomics England, GoDaddy, Happy Fox, Intuit, KT, LivTech, Lonely Planet, LexisNexis Legal & Professional, M1 Finance, Netsmart, Nexxiot, Parsyl, Perplexity AI, Pfizer, the PGA TOUR, Proto Hologram, Ricoh USA, Rocket Companies, and Siemens.

To further help speed the adoption of advanced generative AI technologies, AWS, Anthropic, and Accenture recently announced that they are coming together to help organizations—especially those in highly-regulated industries including healthcare, public sector, banking, and insurance—responsibly adopt and scale generative AI solutions. Through this collaboration, organizations will gain access to best-in-class models from Anthropic, a broad set of capabilities only available on Amazon Bedrock, and industry expertise from Accenture, Anthropic, and AWS to help them build and scale generative AI applications that are customized for their specific use cases.

Deepening our commitment to advancing generative AI, today we have an update on the announcement we made to invest up to $4 billion in Anthropic for a minority ownership position in the company. Last September, we made an initial investment of $1.25 billion. Today, we made our additional $2.75 billion investment, bringing our total investment in Anthropic to $4 billion. To learn more about the broader strategic collaboration between Amazon and Anthropic, of which this investment is one part, check out the stories below:

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