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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

#341

Post by [deleted] »

theturtletalks wrote: post #287
runako wrote: post #281

Since the S-1 filing, xAI has taken over and is likely the largest share of revenue. I would estimate that ~95%+ of xAI revenue, and 100% of its profit, is from renting their datacenters. This is a datacenter REIT bolted onto a social media company bolted onto launch business bolted onto a niche ISP. The expected price to sales is ~100x. The best datacenter REITs trade at ~10x and pay a dividend, which SpaceX does no…

Do companies like Uber, Tesla, etc ever intend to pay dividends? If a stock never intends to pay dividends, the value of the stock is simply the price the next shumck is willing to pay.

[deleted]

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

#342

Post by coke12 »

amluto wrote: post #300
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…

I sincerely hope the market is not willing to value this sort of deal at a P/E ratio anywhere near 94. Off the top of my head, there is a very well established business involving buying expensive things and leasing them to the companies that intend to operate them so they can sell services: aircraft leasing. AER is the biggest player and they have a P/E ratio of, drumroll please, 6. And I expect that GPUs, despite cu…

Comparing SpaceX to an aircraft leasing company seems more foolish to me than a 94x multiple.

I understand the gist here, but come on. This is a generational company. It’s the only relevant space launch business, and has its tentacles deep in AI infrastructure as well. Maybe the AI bet is foolish — I don’t know — you should short it!

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

#343

Post by [deleted] »

trollbridge wrote: post #290
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…

Could you please describe the other satellite launch services whose prices are competitive with SpaceX?

[deleted]

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

#344

Post by Alive-in-2025 »

ajross wrote: post #199
comboy wrote: post #162

Google renting infra from xAI, I did not see that coming. My understanding of what computers are doing, what companies are doing and what governments are doing seems to be getting worse day by day.

> 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…

Xai seems pointless, and they've got gpus needing to be used for something.

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

#345

Post by cindyllm »

mock-possum wrote: post #332
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…

Utterly nauseating. Why would google help prop up this company and its figurehead? Maybe this is finally the straw that breaks the camel’s back for me and google.

[dead]

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

#346

Post by nibbleyou »

benl wrote: post #273
noir_lord wrote: post #272

Earlier quoted context omitted.

> Truly a brilliant deal for everyone involved. Except for people who have pensions/investments in whole market class investments who become exposed to an over valued company with a propped up value.

If whole market means whole market, then such investments are exposed to companies who are fairly valued, companies who are massively overvalued, and companies who are massively undervalued, and the whole range in between. If you want to start picking and choosing which companies are overvalued and which are undervalued, don’t invest in whole market funds. But most people are not good at that!

I don't understand this logic. Does whole market mean scamming companies too?

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

#347

Post by nestes »

missedthecue wrote: post #324
theturtletalks wrote: post #287

Earlier quoted context omitted.

Do companies like Uber, Tesla, etc ever intend to pay dividends? If a stock never intends to pay dividends, the value of the stock is simply the price the next shumck is willing to pay.

The value of the stock is your share in the underlying business. Because underlying business changes over time (hopefully for the better) you are not simply hoping another shmuck pays you more, like with tulips, whose underlying value does not change with time. You own a portion of a concern that is improving its own fortunes. Furthermore, dividends are approved by the board once per quarter or once per year. A divid…

Well, the value of the stock for people who essentially do not have any meaningful control of the business must essentially be tied to the expectation of some liquidity event down the line -- future cash flows. So this could come in the form of dividends, sale of the stock, bankruptcy proceedings, or a purchase of the business.

If I knew for certain (big if) that a business would never have a liquidity event and I couldn't transfer my ownership then it's dead capital for all intents and purposes and you could consider its value essentially $0, right?

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

#348

Post by raincole »

comboy wrote: post #162

Google renting infra from xAI, I did not see that coming. My understanding of what computers are doing, what companies are doing and what governments are doing seems to be getting worse day by day.

Financial shenanigans aside, xAI seems to be buying hardware at breakneck speed. So why not?

https://techcrunch.com/2026/05/20/musks-xai-is-being-sued-ov...

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

#349

Post by tony69 »

nibbleyou wrote: post #346
benl wrote: post #273

Earlier quoted context omitted.

If whole market means whole market, then such investments are exposed to companies who are fairly valued, companies who are massively overvalued, and companies who are massively undervalued, and the whole range in between. If you want to start picking and choosing which companies are overvalued and which are undervalued, don’t invest in whole market funds. But most people are not good at that!

I don't understand this logic. Does whole market mean scamming companies too?

Yes. That’s what passive investing is. You give money to the passive fund, the passive fund buys the market. No regard to price or any other metric.

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

#350

Post by wavefunction »

mock-possum wrote: post #332
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…

Utterly nauseating. Why would google help prop up this company and its figurehead? Maybe this is finally the straw that breaks the camel’s back for me and google.

It seems like Silicon Valley has decided on solidarity among tech billionaires and they're gonna take average Americans' wealth to keep themselves semi-relevant globally as China assumes global dominance. This is after insulting and demeaning the rest of the world, they plan to try to sell anemic services to other countries in whose politics they're also meddling. Circular agreements promising to purchase goods and services without the money in the bank, but you can show your promissory note to a guy with his own promissory note who then writes you a new promissory note based on your first one to take to another guy with his promissory notes, look at all the paper.
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