Elon Musk: Earth's economy is less than one trillionth of K2 economy
Musk posted on X that the scale of the Earth's economy is less than one trillionth of the "K2 economy." K2 refers to a Type II civilization in the Kardashev scale, which is a civilization capable of harnessing all the energy output of its star. Musk implies that, in terms of energy, all current human economic activities are negligible compared to a civilization that can control an entire sun.
The Kardashev scale was proposed by Soviet astronomer Nikolai Kardashev in 1964, classifying civilizations based on their energy consumption: Type I can utilize all the energy from its home star, approximately 10^16 to 10^17 watts; Type II can harness the total output of a star, with the sun's total power being about 3.8×10^26 watts; Type III can utilize the energy of an entire galaxy. Carl Sagan later provided a continuous calculation formula, which indicates that humanity is currently at about 0.73, not yet reaching Type I civilization.
This figure withstands scrutiny. Global primary energy consumption is about 620 exajoules per year, equivalent to an average power of about 2×10^13 watts, or approximately 20 terawatts. Dividing this by the sun's total power of 3.8×10^26 watts results in about 5×10^-14, roughly one two-hundred-trillionth, which is an order of magnitude smaller than Musk's claim of "less than one trillionth." Even the total solar energy reaching Earth, about 1.7×10^17 watts, accounts for only about one two-billionth of the sun's total output.
K2 has entered Musk's capital narrative. At the end of April, a proposed SpaceX compensation plan discussed externally linked rewards to human civilization levels: achieving Type I civilization corresponds to $100 trillion, and Type II civilization corresponds to $1 quadrillion. Musk responded that if humanity could "approach K2," it would be a good deal, but "by then, we won't use dollars as currency, only mass and energy."
SpaceX has brought this narrative into the secondary market. In February 2026, SpaceX acquired xAI entirely in stock, with a post-merger valuation of $1.25 trillion. On June 12, SpaceX went public on NASDAQ at $135 per share under the ticker SPCX, raising $86 billion, far exceeding Saudi Aramco's record of $29 billion in 2019, becoming the largest IPO in history. It closed on the first day at $161, up 19%, with a market capitalization of about $2.1 trillion. Musk holds about 42% of the shares and controls 82% to 85% of the voting rights through Class B super-voting shares. In 2025, SpaceX had total revenue of $18.7 billion and a net loss of $4.94 billion; Starlink revenue was $11.4 billion with about 10 million users; xAI revenue was $3.2 billion, with a simultaneous loss of $3.2 billion.
In market mechanics, buyers are institutions and retail investors betting on the long-term narrative of "space plus AI," while sellers are early shareholders cashing out during the IPO and funds taking profits after the listing. After reaching a high of $202 on June 16, SpaceX's stock price fell significantly; at one point, its price-to-sales ratio exceeded 100 times, nearly double that of the highest-valued company in the S&P 500. The core supporting valuation is the orbital data center: using nearly uninterrupted solar energy in space to power AI computing. Musk's Tesla, SpaceX, and xAI have also formed a chip joint venture, Terafab, aiming for a 2-nanometer process with an initial capacity of 100,000 wafers per month. Beneficiaries include Musk's ecosystem providing launches, energy, and chips, while those under pressure are secondary market investors needing to digest extremely high valuations based on long-term narratives.
Source: Public information
ABAB AI Insight
Musk consistently uses grand long-term goals to price current businesses, but timelines often fall short. In 2002, he founded SpaceX with the initial goal of sending greenhouses to Mars; in 2016, he proposed a plan to migrate one million people to Mars at the International Astronautical Congress; in 2017, he promised to send cargo ships to Mars by 2022, which has yet to be realized. Tesla has repeatedly delayed its promise of full self-driving "next year" since 2016. In 2018, Tesla's $56 billion compensation plan was revoked by a Delaware court in January 2024, after which he pushed for Tesla to relocate to Texas. In November 2025, Tesla shareholders approved a new plan linked to an $8.5 trillion market cap target, potentially worth about $1 trillion.
The capital path is a chain of layered consolidation. In 2022, he privatized Twitter for $44 billion; in March 2025, xAI acquired X through a stock swap, with X valued at $33 billion and xAI at $80 billion at that time; in February 2026, SpaceX further merged xAI, ultimately going public and raising $86 billion, followed by issuing $20 billion to $25 billion in bonds within days after the listing. Starlink is the cash cow of the entire chain, providing blood supply for Starship and AI computing. xAI is building the Colossus supercomputer in Memphis, installing 100,000 H100 chips in 122 days, and has been sued by environmental organizations for running gas turbines without permission. The motivation for integrating AI into a rocket company is straightforward: the bottleneck for computing power is electricity, and the ultimate source of electricity is the sun; having launch capability equates to having the channel to deliver computing power to space.
The most direct intellectual source is physicist Freeman Dyson's 1960 proposal of the "Dyson Sphere," which involves wrapping a star in a giant structure to collect all its energy, representing the engineering form of a Type II civilization. In the 1970s, Princeton physicist Gerard K. O'Neill proposed the concept of space colonies, which directly influenced Bezos: he founded Blue Origin and publicly proposed in 2019 that "one trillion people live in the solar system." In the capital market, Cisco and Nortel Networks had price-to-sales ratios exceeding dozens of times in 1999, relying on the long-term narrative of "the internet changes everything," and after the bubble burst, Nortel Networks went bankrupt in 2009. Musk's ecosystem is currently in an expansion phase, financing extremely high valuations through narrative.
Essentially, it is a transfer of pricing power: the measurement scale of economic value is shifting from currency to energy. The mechanism is that AI makes computing power the core production factor, and the essence of computing power is consumed electrical energy; the amount of energy an economic entity can harness determines how much intelligence it can operate. Historically, GDP has been highly correlated with energy consumption, and the essence of the industrial revolution is to increase per capita available energy by several tens of times. Musk's statement that "only mass and energy will be used as currency" means that whoever controls power generation, chips, and transportation will hold the future economic pricing power, with the dollar merely a transitional accounting unit. The capital market is currently paying a premium for this long-term control, while the risk lies in the fact that energy constraints are physical, but the valuation realization cycle is determined by financial reports.
ABAB News · Law of Cognition
The economy is priced in dollars, while civilization is priced in energy.
The end of computing power is electricity, and the end of electricity is the sun.
The more distant the narrative, the more expensive the valuation.
Notes:
Compensation Plan: The proposal linking "K1 to $100 trillion, K2 to $1 quadrillion" is based on a single report, and I could not confirm whether it is an official SpaceX board plan or an external idea, so it is referred to as "an externally discussed idea" in the text.
Post-IPO Decline: Various sources report differently; the text only states "significantly fell from the high point on June 16."
Unverified Background: The contents in the AI interpretation come from publicly available English information I possess; this round did not verify each item online, including:
The outcome of the Tesla compensation lawsuit.
The valuation of xAI's acquisition of X.
Details of the Colossus construction.