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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

#231

Post by chrisandchris »

tristanj wrote: post #227
lelanthran wrote: post #212

Earlier quoted context omitted.

> 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.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

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

#233

Post by zozbot234 »

thefounder wrote: post #223
zozbot234 wrote: post #215

Earlier quoted context omitted.

> 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.

Grok has plenty of "non-woke AI" cred which will make it a preferred choice for lots of government-side and politically sensitive workloads.

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

#234

Post by benl »

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 valued at that revenue multiple because of its expected revenue growth rate.

This deal is part of that revenue growth. So the new revenue would be already partially or even fully priced-in.

Perhaps it reduces uncertainty around the growth rate, but expectations were already sky-high, as shown by the multiple!

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

#235

Post by fooqux »

chrisandchris wrote: post #231
tristanj wrote: post #227

Earlier quoted context omitted.

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.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

This sounds exactly like the kind of thing that will be outlawed in thirty years after tracing back the root cause of the second great depression.

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

#236

Post by cityzen »

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?

He’s a drug addict and sociopath. Also has very thin skin (and hair) so he does stupid shit. Somehow we are all left holding the bag on his BS.

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

#237

Post by dgellow »

fooqux wrote: post #235
chrisandchris wrote: post #231

Earlier quoted context omitted.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

This sounds exactly like the kind of thing that will be outlawed in thirty years after tracing back the root cause of the second great depression.

That would require regulators to actually pay attention, something they haven’t done actively since a long, long time

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

#238

Post by SlinkyOnStairs »

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…

> Truly a brilliant deal for everyone involved.

Same thing they used to say about Lehman.

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

#239

Post by dyauspitr »

fooqux wrote: post #235
chrisandchris wrote: post #231

Earlier quoted context omitted.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

This sounds exactly like the kind of thing that will be outlawed in thirty years after tracing back the root cause of the second great depression.

Outlaw what? Prevent companies from selling goods and services to each other?

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

#240

Post by dgellow »

windexh8er wrote: post #192
tosh wrote: post #106

Is there any data on whether Google, Amazon, Microsoft, Anthropic, OpenAI etc are most cost efficient in getting datacenter compute online and operating it? I'd be interested in how large the range is here across company and region and specific data center and how it relates to companies like Hetzner if at all.

Well, Elon seems to take the fastest path possible to these DCs. One can envision a future where these get shut down for the severity of the pollution, not to mention being built and operated illegally [0]. [0] https://www.selc.org/news/xai-built-an-illegal-power-plant-t...

Which is precisely why there has been a push to weaken the EPA and other regulating agencies
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