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Google to pay SpaceX $920M a month for compute capacity at xAI data centers

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Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#221

Post by embedding-shape »

uxhacker wrote: post #218
embedding-shape wrote: post #203

Earlier quoted context omitted.

But what is xAI? I thought that was the company that had the compute + Grok, the AI company? Since when does SpaceX (which I thought was a space company?) own AI-compute hardware and/or can do model hosting? Are all of Musks companies just one big thing now where the names no longer matter, or how is it supposed to work? Edit: seems I'm just a bit behind: "xAI — now part of SpaceX ", seems really strange for a space…

I think some justify it as SpaceX plans to offer hosting in space, and then use Starlink to distribute it.

[dead]

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#223

Post by thefounder »

zozbot234 wrote: post #215
ajross wrote: post #199

Earlier quoted context omitted.

> Google renting infra from xAI, I did not see that coming. Actually that seems to be fairly logical? Hardware is what xAI has , and it's in great demand. So sell what makes you money. The real story here is that that xAI hardware is going to be running Gemini and not Grok. Which is to say: Grok basically failed as a frontier AI and they need to pivot to a business model which makes money. Obviously not everything Mu…

> Which is to say: Grok basically failed as a frontier AI and they need to pivot to a business model which makes money. They can just run Grok as a local AI inside Tesla cars. It's actually really efficient as a compute platform because the Tesla cars are in motion at highway speeds, which gives you lots of free airflow for shedding waste heat via the car radiator. Way more efficient than trying to run AI on space sa…

Grok is just DOA. No need to beat a dead horse. Even Musk got that thus the reason why he is renting the stuff it planned for Grok.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#224

Post by IshKebab »

lelanthran wrote: post #212
tristanj wrote: post #205

This is a masterful piece of financial engineering by Google and SpaceX. Google purchased 10% of SpaceX over a decade ago. After dilution they probably own around 5%. SpaceX is valued at a whopping 94x revenue. This deal increases SpaceX's revenue by $11 billion per year. If SpaceX maintains this revenue multiplier, then this single deal boosts SpaceX's valuation by 94 x 11 billion = $1 trillion dollars. Google owns…

> SpaceX is trading at a whopping 94x revenue. This deal increases SpaceX's revenue by $11 billion per year. If SpaceX maintains this revenue multiplier, then the single deal boosts SpaceX's valuation by 94 x 11 billion = $1 trillion dollars. That final number doesn't make sense: if you're trading shares at $X revenue, increasing the revenue by $Y multiplier doesn't increase the share price by the same multiplier.

You're right. Share price isn't based purely on a multiplier of current revenue.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#225

Post by stuxnet79 »

embedding-shape wrote: post #219
peterspath wrote: post #213

Earlier quoted context omitted.

Not really strange... if the goal is to go to mars, you probably need robots, those need intelligence -> ai. It fits pretty well, especially because you want to own all the core technologies as a company.

Why 4-5 companies instead of one then? I thought the goal of SpaceX was to get to Mars, why does xAI need to have that same goal? Or he didn't think xAI was suitable for that goal, then changed his mind so merged the companies?

You are overthinking this. The whole purpose of the SpaceX / xAI merger is for Musk to launder his failing companies to make them more palatable to the public. Not unlike the complex Mortgage Backed Securities of the GFC era which had a ton of low quality debt but yet were somehow assigned spotless credit ratings. Twitter is also being rolled up into SpaceX for the same reason.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#226

Post by thisisit »

embedding-shape wrote: post #203
tmountain wrote: post #200

A huge chunk of SoaceX value in their filing is attributed to their AI technology (aka Grok). I believe it’s 90% or more… Now, it seems they’re leasing the infrastructure required for Grok to scale to Anthropic and Google. I wonder how that math works…

But what is xAI? I thought that was the company that had the compute + Grok, the AI company? Since when does SpaceX (which I thought was a space company?) own AI-compute hardware and/or can do model hosting? Are all of Musks companies just one big thing now where the names no longer matter, or how is it supposed to work? Edit: seems I'm just a bit behind: "xAI — now part of SpaceX ", seems really strange for a space…

Next up Tesla and SpaceX are going to merge and that will another round of synergies where Tesla and Vision AI (in FSD) and xAI.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#227

Post by tristanj »

lelanthran wrote: post #212
tristanj wrote: post #205

This is a masterful piece of financial engineering by Google and SpaceX. Google purchased 10% of SpaceX over a decade ago. After dilution they probably own around 5%. SpaceX is valued at a whopping 94x revenue. This deal increases SpaceX's revenue by $11 billion per year. If SpaceX maintains this revenue multiplier, then this single deal boosts SpaceX's valuation by 94 x 11 billion = $1 trillion dollars. Google owns…

> SpaceX is trading at a whopping 94x revenue. This deal increases SpaceX's revenue by $11 billion per year. If SpaceX maintains this revenue multiplier, then the single deal boosts SpaceX's valuation by 94 x 11 billion = $1 trillion dollars. That final number doesn't make sense: if you're trading shares at $X revenue, increasing the revenue by $Y multiplier doesn't increase the share price by the same multiplier.

Sure it might not stay at 94x. But as long as SpaceX trades above 20x revenue, Google makes money from this deal.

And the bigger play is this deal pushes SpaceX over the finish line for S&P 500 inclusion. That's worth tens of billions for everyone involved.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#228

Post by kklisura »

ACCount37 wrote: post #184
H8crilA wrote: post #141

Earlier quoted context omitted.

Why would it ever be more economical to put datacenters in orbit, rather than on some dirt cheap land?

There are no NIMBYs in space. No government permitting on land use. And solar power is plentiful. It's like having a dollar store Dyson sphere. Making use of that is predicated entirely on being able to put a lot of hardware into space cheaply. SpaceX is the undisputed best at that, no one comes close. The question is whether their "best" is good enough to make space datacenters economical.

But you don't have to build it in someone's _backyard_, just build it in a middle of nowhere.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#229

Post by robmccoll »

embedding-shape wrote: post #203
tmountain wrote: post #200

A huge chunk of SoaceX value in their filing is attributed to their AI technology (aka Grok). I believe it’s 90% or more… Now, it seems they’re leasing the infrastructure required for Grok to scale to Anthropic and Google. I wonder how that math works…

But what is xAI? I thought that was the company that had the compute + Grok, the AI company? Since when does SpaceX (which I thought was a space company?) own AI-compute hardware and/or can do model hosting? Are all of Musks companies just one big thing now where the names no longer matter, or how is it supposed to work? Edit: seems I'm just a bit behind: "xAI — now part of SpaceX ", seems really strange for a space…

Musk sold Twitter into xAI which he then sold into SpaceX as a financial engineering effort to lessen the impact of massive debts and cash burn. The IPO and some clever structuring is the final step in the process.

Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers

#230

Post by ninkendo »

diordiderot wrote: post #207
ninkendo wrote: post #131

Earlier quoted context omitted.

> Starlink generated over 10B last year An entire one-hundredth of their proposed valuation!

Yeah, crazy for a company with nothing but the largest civilian satellite network and what amounts to a monopoly on space flight.

Profitability of space flight has a hard maximum. It’s not anywhere close to what their valuation would suggest.

There’s a reason Elon keeps trying to get investors to believe his “data centers in space” lunacy, because you need that sort of magic pixie dust to justify why any of this valuation makes sense, let alone have anywhere to go but down.

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