Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

cnbc.com

Post reply on HN
Print view View original

621–630 of 1001 posts

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

#621

Post by bluegatty »

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'm sorry this is a misplaced framing.

==> Those facilities are being leased because Grok is failing.

Space X does not want to lease away it's competitive advantage to a primary competitor.

It'd be like Tesla leasing factory space to Toyota and Ford.

'GPUs, Energy and Data Centres' are a hugely critical resource in the AI race and SpaceX is now leasing it away.

Will it make money? Sure.

But this is 'Strategic Fumbling'.

The cash flow happens to help them leading up to IPO - that's a side show.

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

#622

Post by speedgoose »

BLKNSLVR wrote: post #434
jazzyjackson wrote: post #367

Earlier quoted context omitted.

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?

Grokipedia would be way better launched into space.

The risk is getting our planet annihilated if something stumbles upon it.

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

#623

Post by poisonfountain »

bluegatty wrote: post #621
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'm sorry this is a misplaced framing. ==> Those facilities are being leased because Grok is failing. Space X does not want to lease away it's competitive advantage to a primary competitor. It'd be like Tesla leasing factory space to Toyota and Ford. 'GPUs, Energy and Data Centres' are a hugely critical resource in the AI race and SpaceX is now leasing it away. Will it make money? Sure. But this is 'Strategic Fumblin…

It is probably both.

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

#624

Post by JumpCrisscross »

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.

> It is what S&P Dow Jones Indices themselves say

No it isn’t. They put rules out for consultation and declined adopting them. Nobody was responding to political anything. If management had a say, they would have probably pushed to adopt the changes.

Then a bunch of influencers turned the whole thing into a conspiracy theory and a shocking number of smart people bought the pitch and churned their retirement accounts.

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

#625

Post by baobabKoodaa »

benl wrote: post #500
nativeit wrote: post #429

Earlier quoted context omitted.

Are there really 10-100x undervalued companies listed on indexes that haven’t been noticed?

Yes. There are probably a dozen or more across the SP500 and Russel 2000 that will 10-100x in the next 5-10 years. The trick is to be able to identify them!

There's a difference between "will go 10x in the next 10 years" vs "is 10x undervalued right now".

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

#626

Post by JumpCrisscross »

dghlsakjg wrote: post #453
l23k4 wrote: post #438

Earlier quoted context omitted.

How would you "design" an IPO to do that? What exactly is that even supposed to mean?

Passive investors and retirement accounts are heavily in on automatic indexing. This deal has been pushed hard to be included prematurely in the indexes to the point that Nasdaq changed the rules. The accusation is that these changes were made so that index funds will buy this stock automatically far earlier than they would have previously. Given the… uh… astronomical asking price, it looks like SPCEX is meant for El…

> retirement accounts are heavily in on automatic indexing

Majority are not. A minority are, mostly towards the S&P. Most assets remain actively managed, including in retirement assets (which covers 401(k)s, IRAs, pensions, et cetera).

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

#627

Post by soundwave106 »

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.

Or you could mitigate the next dot-com style crash (which wiped out nearly 80% of the NASDAQ composite).

Back then, it was "day trading" that was one of the warning signs that a bubble was ensuing. There are certainly shades of the day-trading phenomenon in the "r/wallstreetbets" gambling, and wildly overvalued meme stocks like Tesla. And this mad rush to relax the guardrails for what appears to be wildly overvalued IPOs.

Bubbles, and their inevitable collapse, are generally not as big of a problem for younger passive investors, but they can be for older ones. (Hence why I've got a "bond tent", value tilt, and other diversification. I'm at the stage where "underperforming the market" is less of a concern than "mitigation". :) )

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

#629

Post by kylecordes »

ambicapter wrote: post #554
l23k4 wrote: post #458

Earlier quoted context omitted.

[flagged]

> buyers decide the prices they'll buy at. Not if they're index funds. They buy at the price it is, until they've satisfied their holdings represent the appropriate share of the market. Which, pre-IPO and early-days-after-IPO, is likely to not be accurate to the long-term price.

This, of course, is why it's wise to wait a while after an IPO for the market to figure out how it values a new stock before it joins the index.

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

#630

Post by polski-g »

comboy wrote: post #162

Google renting infra from xAI, I did not see that coming. My understanding of what computers are doing, what companies are doing and what governments are doing seems to be getting worse day by day.

It means that there's no memory to buy at any price. There's no GPUs. There's no power.

Elon had the foresight to buy all that in advance and now Google, the datacenter company, has to rent datacenter space.

MU went 1000% in one year and it's still one of the cheapest companies on the NASDAQ.

Post reply on HN