The SpaceX IPO Should Help Rivian. Here's How.

After its record-breaking initial public offering (IPO), Space Exploration Technologies (NASDAQ: SPCX), known as SpaceX, is now primed to go on a spending spree. In total, the company believes it is chasing an addressable market worth $28.5 trillion. More than 90% of that value, however, is tied up exclusively in artificial intelligence (AI) opportunities, not rockets or satellites.

With IPO proceeds totaling $86.7 billion, plus a possible $20 billion bond sale, SpaceX will aggressively invest in its AI business during the coming months and years. Which AI opportunities in particular will SpaceX and its founder, Elon Musk, target?

Scaling its data center infrastructure will be at the top of its list. That increase in compute power, however, will be used for a variety of purposes, one of which will surely be advancing the models that power autonomous driving systems.

Earlier this year, Tesla (NASDAQ: TSLA) -- another Musk company -- invested $2 billion into xAI, Musk's AI start-up. One month later, SpaceX merged with xAI.

It's not hard to connect the dots here. AI is a key enabler of self-driving technologies. And the future of Tesla is no longer relegated to simply selling cars but to operating a global robotaxi fleet -- an opportunity some experts value at $10 trillion long term.

xAI will perhaps be the biggest recipient of SpaceX's post-IPO spending. And because Tesla holds a direct stake in that business, expect xAI to allocate some of its resources to advancing AI systems that will help Tesla better capture the emerging robotaxi market.

Oddly enough, this situation could help an unrelated EV stock: Rivian (NASDAQ: RIVN). There's a surprising connection here that many investors fail to appreciate.

How SpaceX's AI spending will end up helping Rivian

The global rollout of robotaxis is coming sooner than many expect. And the value of this market may also exceed most expectations.

"We think $8 trillion to $10 trillion for the entire autonomous taxi opportunity throughout the world, from almost nothing," predicts Cathie Wood, CEO of Ark Invest. "That's how quickly AI is going to cause these things to happen."

Other experts agree. "While L4 robo-taxis are now available in the first cities in the United States and China, the global rollout of robotaxis is now expected to become a reality at a large scale in 2030," concludes a research report from McKinsey. "Overall, experts expect that robotaxis will be the first commercial application for L4 in mobility -- not privately owned cars."

Image source: Rivian.

Major tech firms are already raising billions of dollars to tackle the nascent but high-potential robotaxi market. Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), the parent company of Google, recently raised $16 billion for its Waymo robotaxi service, valuing that business at $126 billion. Uber Technologies (NYSE: UBER) has also committed more than $10 billion to scale its own robotaxi service.

But unlike Tesla, neither company can produce its own vehicles in-house. So if Tesla can ramp its autonomy capabilities quicker than before, thanks to SpaceX's elevated spending on xAI, other robotaxi competitors may fall behind in the critical area of physical vehicle production.

We're already seeing competitors respond to this reality. Earlier this year, Uber invested $1.25 billion in Rivian in exchange for as many as 50,000 Rivian vehicles -- which will be used to power Uber's robotaxi arm.

In a nutshell, the SpaceX IPO could indirectly accelerate the transition to robotaxis. Tesla can both produce its own vehicles and deploy its own self-driving software. Most of its competitors, however, lack physical manufacturing capabilities.

All this should help Rivian, a company investing heavily in producing robotaxi-capable vehicles, but that does not yet seem to be pursuing the launch of its own robotaxi service. In the coming years, I expect Rivian to become a key supplier to the robotaxi industry. Its deal with Uber is an early testament to that potential.

Down the road, I wouldn't be surprised to see a capital-rich big tech competitor buy the company outright to ensure its robotaxi arm remains as vertically integrated as Tesla's.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Tesla, and Uber Technologies. The Motley Fool has a disclosure policy.