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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

#361

Post by jazzyjackson »

trollbridge wrote: post #292
stuxnet79 wrote: post #225

Earlier quoted context omitted.

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.

I sure wish my company were failing the same way Musk’s allegedly are.

Personally I can go without owing money to Saudi royals.

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

#362

Post by MrMorden »

kennywinker wrote: post #327
MrMorden wrote: post #271

Earlier quoted context omitted.

That's the neat thing: you don't, or at least not in the megawatt range. A kilowatt can be done with radiative cooling but doesn't get you far with a hypothetical datacenter satellite.

So, somehow the servers can run hot in space without a problem?

No; if you try to do this you don't launch in the first place because the amount of servers required to be useful can't be cooled within your payload budget.

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

#363

Post by BobbyJo »

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…

P/E is price to earning. Price to revenue is P/S. AER's P/S is like 3, so the discrepancy is much worse than you think.

Sidenote: 3 is actually high. 94 is absolutely ridiculous.

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

#364

Post by spwa4 »

mihaic wrote: post #289
dyauspitr wrote: post #239

Earlier quoted context omitted.

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

Yes, if it's done with an intent to defraud the general population, which could be the case here. Effects and intent really matter when deciding actions.

Except the regulators first outlawed what is generally considered to have caused the great depression (savings banks allowed to invest, which translates to very, very rich people being allowed to take massive risks with poor people's money) ... then re-legalized it.

So not only are the regulators not going to allow things that cause another great depression, they're allowing the things that caused the first great depression too. They must want a rerun.

(Because if you don't allow this you're effectively demanding the extremely rich make good investments to stay rich ... and not even France, otherwise pretty socialist, dares to go that far)

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

#365

Post by amoss »

deadbabe wrote: post #318
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 you want to play “active investor” and pick and choose what companies you invest in, don’t be surprised when you underperform the whole market. SpaceX could rise to be a major winner that makes people a lot of money. And then what? You missed out and underperform the whole market.

Alternatively you may want to be a passive investor using the current rules for index inclusion, rather than having them altered to favor this loss-making trashcan on fire.

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

#366

Post by PeterStuer »

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…

So SpaceX is selling inference capacity. Who else is? What were the competing offers for Google and Anthropic?

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

#367

Post by jazzyjackson »

Rover222 wrote: post #252
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…

It has nothing to do with Grok, at least not the current iteration. SpaceX is the only company that can concievably launch large scale orbital compute.

I’m out of the loop, why is compute better /after/ being launched into space? Is the idea just to be co-located within the ISP to reduce round trip time to the LLMs?

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

#368

Post by [deleted] »

dgellow wrote: post #240
windexh8er wrote: post #192

Earlier quoted context omitted.

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

[deleted]

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

#369

Post by jaycroft »

simoncion wrote: post #313
happosai wrote: post #152

Earlier quoted context omitted.

> if anyone at all can make space-based datacenters economical, it's SpaceX Let's hope burning ten thousand tons of toxic e-waste annually in upper atmoshphere never becomes economical. Or mankind gets to senses and bans externalizing your e-waste problem by burning in atmosphere...

> ...burning ten thousand tons of toxic e-waste annually... Expressing water usage in gallons makes it seem really large, too. NASA says[0]: Scientists estimate that about 48.5 tons (44 tonnes or 44,000 kilograms) of meteoritic material falls on Earth each day. If we assume that they're all the heavier v2 units, the total mass of the orbital portion of Starlink is ten point four tons. [1] If we assumed that they last…

I think you missed a factor of 1000 somewhere in there: Each satellite weighs about 1 ton, there are about 10,000 of them. That is 10,000 tons in orbit for the constellation, not 10. Assuming a 5 year decay, that's 10000/5/365 ~= 5 tons / day. Still about 10% of the natural incoming material, but considerably more than your "six hours worth per year".

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

#370

Post by stogot »

BobbyJo wrote: post #363
amluto wrote: post #300

Earlier 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…

P/E is price to earning. Price to revenue is P/S. AER's P/S is like 3, so the discrepancy is much worse than you think. Sidenote: 3 is actually high. 94 is absolutely ridiculous.

The question on my mind is-is this IPO designed to rip off recreational passive investors and those of us that invest in retirement accounts?
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