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

Post by bendbro » Sat, Jun 06, 2026, 5:06 PM UTC

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…

Post by an0malous » Sat, Jun 06, 2026, 5:11 PM UTC

HarHarVeryFunny wrote: post #376

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…

Yeah, only a small portion of SpaceX's revenue actually comes from Space (payload delivery). At this point they are basically an ISP (Starlink) and a datacenter/leasing company. It's not clear if Musk (SpaceX/X.ai) is really pursuing AI any more - I expect he hasn't necessarily given up on it, and he hasn't said he has, but it seems he's rented out almost all of his GPUs to Anthropic and Google, so that's not going t…

Post by otterley » Sat, Jun 06, 2026, 5:14 PM UTC

tjwebbnorfolk wrote: post #378

otterley wrote: post #283

Earlier quoted context omitted.

I don’t think your math is correct. Profit is revenues minus expenses. Unless Google’s purchase of compute brings SpaceX’s revenues into profit territory (such that their total revenues exceed their expenses), SpaceX still won’t be profitable. This is accounting 101. Google’s investment in SpaceX is completely orthogonal to the analysis. Equity investments aren’t revenue for the issuer. (Gains on sale would be revenu…

An equity interest in a company is a perpetual claim on future profits. Equity IS securitized profits. Google's purchase sends cash to to SpaceX, which they report as revenue, and which they earn a profit from.

Post by benl » Sat, Jun 06, 2026, 5:15 PM UTC

Alive-in-2025 wrote: post #337

benl wrote: post #322

Earlier quoted context omitted.

The bet is that demand for AI tokens will continue to grow exponentially. And that SpaceX will be able to deploy and rent out GPUs to serve those tokens faster than anyone else. The wrinkle is that they are planning to deploy those GPUs in space. That’s what people are most skeptical about, I think!

Space data centers need years of time to design, build, and deploy, 5-10 at least, and that's after they solve their multiple very difficult or impossible problems. How will they cool them? There are just simple ideas like giant structures to radiate the heat away, but you say you need to put lots of mass in orbit? Like fsd, will take decades to figure things out.

Post by browningstreet » Sat, Jun 06, 2026, 5:15 PM UTC

coke12 wrote: post #342

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…

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!