looks like elon web services (EWS) is the master plan all along :D
Google to pay SpaceX $920M a month for compute capacity at xAI data centers
601–610 of 1001 posts
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#602Earlier quoted context omitted.
Space-based datacenters simply won't work. That people are talking about them shows Musk is the greatest snake oil salesman the world has ever seen.
> won’t work A datacenter (earthbound or space) itself is a fantastical idea until a mix of events and inventions made it feasible to build them to sell compute.
... what? Data centers are literally the original form of computer facility. How are they different from the computer rooms mainframes, etc were housed in?
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#603Since 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…
In a similar situation: I basically have just 2 funds in my retirement portfolio: SnP500 index fund (75%) AND Berkshire Hathaway B shares (25%)
from my research I know that in years where SnP500 drops too much (recessionary periods), BRK-B would soften the blow as Value stocks tend to do well in such times. And usually that works for me.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#604That's... $12.50/hr per GPU. WTF?
From Google's spokesperson, quoted in the article: "This is a short-term, timely agreement to ensure we have bridge capacity to meet surging customer demand for our agent platform, Gemini Enterprise, which has been even higher than we expected."
Google wants a lot of compute sooner rather than later, and they're willing to pay a premium for speedy delivery of that compute. SpaceX has the capacity already built and ready to go. Hence the high price.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#605looks like elon web services (EWS) is the master plan all along :D
Everything will run on Elon's Costly Compute servers.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#606Earlier quoted context omitted.
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…
Start gradually converting your equity to bonds is the standard advice on that timeframe. If you're dreading equity drawdowns, that's what fixed income is for.
I'm technically not really in pure index funds, I just wanted to avoid trying to complicate my thoughts. Nearly all of my investments are in VFORX or Schwab's equivalent, and have been for a long time. So they are really composed of total market funds, bonds, etc, and Vanguard changes the ratio a bit as 2036 approaches. So while not really an index fund, from my perspective as a lay investor I treat it like that and consider myself an honorary Boglehead. I just put money in and forget about it.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#607Since 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…
PE of 380 against deteriorating margins & profit. This story doesn't end well. But to your point, it's likely a cult of personality that can stay upright until Musk leaves the company.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#608Earlier quoted context omitted.
But you can transfer your ownership.
And you can sell your tulip. But if the mania stopped and you suddenly _couldn’t_ find another person to sell it to, would you now be upset you paid $5000 for a tulip? What’s the value at which you wouldn’t be upset? Ok, that’s the intrinsic value of a tulip to you.
The thing about a profitable business that is different from a tulip is that it can at any point decide to issue a one-time or ongoing dividend. It can sell off parts to create cash. It has lots of optionality. Public companies have even more liquidity, which creates more optionality.
Even if you don't have immediate liquidity, it would obviously be worth something to have a slice of e.g. Rolex SA. That's obviously different than owning a tulip.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#609Earlier quoted context omitted.
Start gradually converting your equity to bonds is the standard advice on that timeframe. If you're dreading equity drawdowns, that's what fixed income is for.
This is absolutely terrible advice and is out of touch with modern financial understanding. Bonds feel psychologically safer, but lead to failure more often than total market equity portfolios, even when you account for market crashes. https://youtu.be/p25PPBgMiEk
I feel like I should go learn some more. I'm not in a pure index fund, I'm really in VFORX (almost completely, I'm not too original nor sophisticated financially and don't try to pick my own stock picks these days except with my "lunch money" just for fun). Do you think something like VFORX is a bad option? It's actively managed, so the fees will be a little higher than a pure index fund, but it's Vanguard and the fees are still really low. And it has total market components in addition to bonds.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#610Earlier quoted context omitted.
SpaceX cannot report Google’s investment as revenue on its balance sheet. Full stop. Equity investments are reported as shareholder equity. If you don’t believe me, read FASB ASC 605-606, ask your friendly neighborhood CPA—or, perhaps so you’ll earn a valuable lesson about confidently spreading bullshit about subjects in which you are clearly uneducated (or, at best, superficially educated), try it yourself in a publ…
> Under the terms of the deal, Google will pay SpaceX $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 part is not equity - that's revenue for services rendered. But a commitment for nearly $1B/mo in revenue will likely increase SpaceX's share price, and Google owns some of those shares, so their holdings wil…
Yes, the appreciation will accrue to the investor, in this case, Google (and every other shareholder). But it is not revenue for SpaceX, which is the error OP made.
I’m aware of the guidelines. Another guideline should be “check yourself for accuracy before you reach for the keyboard”—especially since it’s easier than ever. Giving false information that, if practiced and not disclaimed, could land someone in jail is irresponsible.