These sort of numbers are really easy to estimate and it sounds like you haven’t done.

For the sake of a reality check:

IPO is raising approx $75bn of new equity

SpaceX has negotiated substantially below market fee of 0.75%

Total fee pool = ~550mio USD

Fee pool will be split between 23 banks, so average of 23mio per bank, likely skewed heavily towards Goldman Sachs and Morgan Stanley as the lead bookrunners.

Clearly everyone has incentives for spaceX to go up, but important to keep in mind the order of magnitudes we are talking about, the monthly google compute spend in the headline totally eclipses the one off banking fees

Before people jump to conclusions, if you look at the details there seems to be a plan for a major profit sharing and licensing agreement with Bytedance. The numbers floated around are that 50% of the profit would go to Bytedance plus.

This would significantly impact its valuation to outside investors.

it was always more about control than making profit tbh

It’s almost certainly more profitable to make to make 1,000 $100k loans from a banks point of view as the single loan will be much riskier (effectively not benefiting from the law of large numbers). Not to say there are benefits of dealing large loans such as cross selling other financial products to the large business.

Your second point is totally correct, but it is exacerbated as a result of (broadly good) government policy. A bank wouldn’t mind making uncollateralised loans any more than a mortgage, although it might charge more interest for the risk. However the government penalises banks based on (approximately) the sum of their risk weighted assets [0]. Here mortgages, as collateralised loans, are greatly incentivised over uncollateralised loans to business.

It’s hard to say if the situation would be worse without it, it’s possible we might have more risky business loans leading to growth, but also more likely we could see a serious global financial crisis.

[0] I am simplifying here slightly but you can see how the US ranks major banks here, higher is worse from the banks point of view https://www.fsb.org/uploads/P261124.pdf

Yes, one $100M loan in isolation is risky (I was just giving an example), but my point was that a portfolio of a small number of large loans to big businesses is much more profitable than a portfolio of many more smaller loans to small businesses. Large companies are much less likely to go bankrupt and the overhead of making the loan relative to the profit from interest is much lower. 50% of small businesses go bankrupt in the first 5 years. It's simply less profitable to lend to them...

they won't hold the risk for very long at all

because the bank will immediately sell the loan on

(but they will have collected a fee on both sides...)

It's also a benefit to the consumer in the option of cheaper tea - you can still have choose to pay more for loose leaf.

In the UK it would be very unusual for it not to be made out of paper, I was shocked when I visited the US