Earlier quoted context omitted.
I thought elon hates demis
Demis? Democrats or something else? Elon likes money and power.
Demis Hassabis - head of Google DeepMind.
Google to pay SpaceX $920M a month for compute capacity at xAI data centers
351–360 of 1001 posts
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#352Earlier quoted context omitted.
If he’s so smart why isn’t grok using all that capacity?
Building excess capacity from the start and selling it for a billion a month to constrained competitors. I only wish I could be so dumb.
Short memory. When musk was buying all of this capacity it was billed as xai is going to take over the world. Instead grok is a flop and now he has extra capacity. If xai was a data center he’d be smart. But it is a failed Ai venture.
It’s like training your dog not to jump on the sofa. But then you fail to train to stay off and then brag about how you trained it to stay ON the sofa.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#353Since 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…
TSLA has a forward PE of ~200x. That is probably the most logical comparison with SpaceX. Proof that the market can stay irrational for quite a long time. It fills me with a bit of dread about the future of the market. I am 10 years out from retirement, have a bit over 1M sitting in that market, and I wonder if it will implode in the meantime. I am fairly committed to the "invest like a dead man" (i.e. index funds, n…
Plenty of hedged equity funds out there. Trade some performance for peace of mind.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#354This 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…
> masterful piece of financial engineering
Love how we assign positive adjectives to unethical practices by corporates
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#355Earlier quoted context omitted.
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!
I would short xAI but the market can remain irrational longer than I can remain solvent. Plus all the foolishness to prop it up with other businesses just seems like bad accounting.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#356Earlier quoted context omitted.
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!
I don't think you can short it before the IPO happens. Well, unless you've got a few millions and go to a bank and have them make a product for you specifically. But for normal people, for now, not happening.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#357This 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…
> masterful piece of financial engineering Love how we assign positive adjectives to unethical practices by corporates
I think the op was being a bit satirical
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#358Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#359What exactly is SpaceX's core business?
Elon Musk.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#360Earlier quoted context omitted.
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!
I am comparing SpaceX’s datacenter-and-GPU leasing business to aircraft leasing.
It’s possible, and common, for one large company to have multiple business lines, each worthy of a very different P/E multiplier. In principle you end up with a weighted average of some sort.
edit: Matt Levine has some great articles about this phenomenon and how some companies try to juice it.