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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

#521

Post by AtNightWeCode »

GMoromisato wrote: post #392

SpaceX valuation and ultimate success depends on two things: 1. AI demand continues to grow. 2. SpaceX's orbital data centers are profitable. If both of those are true, then their current valuation is absolutely justified. I'm confident #1 will happen. #2 is the big bet, and IMHO this is just an engineering/execution problem. All they need is (a) Starship to work reliably, and (b) a manufacturing line that can build…

2. SpaceX's orbital data centers are profitable.

This will never happen.

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

#522

Post by hijodelsol »

SoftTalker wrote: post #306

> $920 million per month from October 2026 through June 2029 for access to “approximately 110,000 NVIDIA GPUs, CPUs, memory, and other related components. That's about $8,400/month per "component" is that in the ballpark at all with what a month of dedicated/exclusive access to an NVIDIA GPU would go for?

That's roughly 11.66$ per hour per GPU, which is above the price that Google Cloud is reselling them at if you commit for 36 months: https://getdeploying.com/gpus/nvidia-b200

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

#523

Post by 7e »

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…

The market should consider this a huge negative: SpaceX is renting out their compute because they have failed to make use of it themselves. This calls into question whether they have any talent in xAI at all.

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

#524

Post by l23k4 »

u1hcw9nx wrote: post #391
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!

the problem: The Nasdaq 100 and FTSE Russell made a rule change that allows SpaceX to enter index without mormal time for price discovery. Most index funds have rebalance day just 5 days after IPO. S&P also made rule change for S&P Total Market Index and Dow Jones US Total Stock Market Index, but left SP500 intact. Nothing wrong with SpaceX or Anthropic getting into indexes with fair rules, this rule change is pure c…

[flagged]

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

#525

Post by mmcwilliams »

uxhacker wrote: post #218
embedding-shape wrote: post #203

Earlier quoted context omitted.

But what is xAI? I thought that was the company that had the compute + Grok, the AI company? Since when does SpaceX (which I thought was a space company?) own AI-compute hardware and/or can do model hosting? Are all of Musks companies just one big thing now where the names no longer matter, or how is it supposed to work? Edit: seems I'm just a bit behind: "xAI — now part of SpaceX ", seems really strange for a space…

I think some justify it as SpaceX plans to offer hosting in space, and then use Starlink to distribute it.

Can you provide a good example of something that is currently hosted in space and distributed via satellite?

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

#526

Post by lostlogin »

l23k4 wrote: post #493
nullstyle wrote: post #488

Earlier quoted context omitted.

Quatsch. The indices will say whatever benefits their power the most, regardless of truth. The fact that they are bending now to pressure is proof enough for me. We live in an age proving that valuation is just a manipulation. This whole story is just like the BaM situation: the people with more money feel emboldened to pull every dastardly trick they can to tilt the table towards their pockets, away from the honest…

So you don't actually have any evidence to support your claim? This just seems like a matter of faith at this point, that's fine.

I don’t think you have either?

It’s and interesting point. I’ve done a bit of searching and am also empty handed.

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

#527

Post by mullingitover »

crystal_revenge wrote: post #516
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…

> I sincerely hope the market is not willing to value this sort of deal at a P/E ratio anywhere near 94. It will very likely be valued much, much higher. The SpaceX IPO is, in itself, a marvelous piece of financial engineering (requiring co-operation among multiple actors) which has been a long time in the works. - Right out of the gate nearly all retail investment platforms have dramatically reduced requirements for…

> Right out of the gate nearly all retail investment platforms have dramatically reduced requirements for purchasing an IPO, most notably Fidelity, which previously required $500,000 in your account to participate in an IPO reduced (on Friday) this amount to $2,000

Not at all surprising that the US in 2026 has degenerated to the point of turning the equity market itself into a bucket shop.

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

#528

Post by saltyoldman »

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…

Sounds like the system works like all other hacked systems on this planet. We need to fix our broken systems.

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

#529

Post by FuckButtons »

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!

Laying the blame for the transparent financial manipulation we are observing at the feet of regular people (who are putting their savings into their pension funds, a system that we incentivize because of its pro social outcomes) and saying they should just opt out because they should know better, is at best callous, most people should not have to think about that issue at all.

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

#530

Post by bombcar »

l23k4 wrote: post #463
nullstyle wrote: post #452

Earlier quoted context omitted.

Please provide some support that the rule changes were proposed from within. Given the fact they tried pulling this nonsense on 3 indices, it seems very unlikely the rules changes originated from within.

It is what S&P Dow Jones Indices themselves say, so the burden of proof to prove otherwise must fall on you. And anyway, the rule change is truly the only reasonable way they can react to the current situation. It will absolutely be untenable to keep Anthropic , OpenAI and SpaceX off the S&P 500 with them also being the highest valued companies on the market.

If I were the DJI I would have proposed the change, simply so that we could get some outrage flowing and shut it down.

Without the proposal, you'd have outrage out the other side that it wasn't included (especially if it shoots off like, well, a rocket).

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