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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

#651

Post by krupan »

formerly_proven wrote: post #144
ACCount37 wrote: post #134

Earlier quoted context omitted.

SpaceX has recently started pitching itself as an orbital datacenter company. If you buy into that business model (or pretend to), it makes sense for SpaceX to start selling compute early. Their "earthside compute" clients of today are "skyside compute" clients of tomorrow. A part of Musk's old pitch for Starlink was: space-based solar makes perfect sense for powering space assets, and no sense whatsoever for powerin…

When I hear space I think "that's the perfect location for a data center", since data centers are lightweight, small, require little power, don't need human intervention, have lifetimes measured in decades and don't have to reject heat. Since space easily satisfies these requirements, space is an ideal deployment location for data centers.

You forgot that standard computers are also not sensitive to radiation

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

#652

Post by polski-g »

kklisura wrote: post #228
ACCount37 wrote: post #184

Earlier quoted context omitted.

There are no NIMBYs in space. No government permitting on land use. And solar power is plentiful. It's like having a dollar store Dyson sphere. Making use of that is predicated entirely on being able to put a lot of hardware into space cheaply. SpaceX is the undisputed best at that, no one comes close. The question is whether their "best" is good enough to make space datacenters economical.

But you don't have to build it in someone's _backyard_, just build it in a middle of nowhere.

That's literally what datacenter in Utah was and it still had a horde of retards complaining.

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

#653

Post by missedthecue »

ozgrakkurt wrote: post #544
missedthecue wrote: post #424

Earlier quoted context omitted.

The underlying value of a tulip is the same as it was in 2000 and 2026. The underlying value of Google is much different in that same time frame.

There is no underlying value. It is only how much other people are willing to exchange for it. So stock marked is always meaningless except considering it is so large and consequanetial and so many people have access to it that it will be rational automagically. This is more of a belief that seems to be fairly correct than a rational line of thinking. This is similar to Democracy in a way

You seem to be operating on the assumption that stock values are just totally and completely random and the fact that Google is worth $4T is just as much of a possibility as Hertz Rental Car being worth $1.5B

If you disagree with the above framing, your reasoning will have to concede the existence of underlying value. Yes, obviously the price of a share is the result of the bid and the ask price in the order book. But those prices are based on something, they are not randomly generated. They are based on conceptions of value. The fact that companies with increasing free cash flow over long periods of time always see increasing share prices over time is not random coincidence.

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

#654

Post by preommr »

runako wrote: post #281

Since 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…

My only consolation is that this is so obvious that it's not going to lead to a disaster. Things like the housing crisis happened because long-established institutions like credit ratings and mortgage lenders didnt do their jobs.

It's the swiss cheese model, hidden behind curtains.

This is like a giant sign saying you can buy $2 for a $1.

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

#655

Post by prism56 »

softwaredoug wrote: post #570

> compute from its Colossus 1 data center near Memphis, Tennessee, that xAI — now part of SpaceX — originally built for its own artificial intelligence efforts. Is this the same Memphis data center notorious for burning jet fuel nonstop for power?

Not surprised. I work in the gas turbine market and this AI boom has revolutionised our business and investments, oil and gas is dead. (to us)

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

#656

Post by tgsovlerkhgsel »

brainwad wrote: post #428
trollbridge wrote: post #290

Earlier quoted context omitted.

Could you please describe the other satellite launch services whose prices are competitive with SpaceX?

The whole of the space part of SpaceX is like 10% of the claimed business according to their S-1. And most of that is Starlink, not launches for third parties.

But building a Starlink competitor is essentially impossible without also building a space company, and the main competitor doing that just turned their only launchpad into a crater and is out of the game for a year or so.

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

#657

Post by 0xffff2 »

JumpCrisscross wrote: post #626
dghlsakjg wrote: post #453

Earlier quoted context omitted.

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).

Way outside of my area of expertise, but a quick search suggests that exact numbers probably depend on exactly how you define the question, but it would be broadly reasonable to say that the balance is about 50/50 +/-5%, and trending towards the passive side over time.

Would you agree with that?

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

#658

Post by bryanlarsen »

adgjlsfhk1 wrote: post #539
HarHarVeryFunny wrote: post #414

Earlier quoted context omitted.

As I recall isn't Starlink revenue at least 3x Space revenue, so not sure how they are characterizing that 3:1 ratio as 3% vs 4% ! The "93% AI company" is also a huge mischaracterization since this isn't AI business - it's datacenter/GPU leasing business which their 2 customers can pull the plug on with 90 days notice.

given that SpaceX is choosing what price they're charging starlink, there's a reasonable argument that starlink isn't profitable either

That's in the IPO documents. Starlink had $11.4 billion in revenue and $4.4 billion in operating profit in 2025. Falcon9 had ~$4 billion in revenue, so they didn't cheat by subsidizing starlink with Falcon9.

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

#659

Post by zxspectrum1982 »

stogot wrote: post #374
zxspectrum1982 wrote: post #371

How can SpaceX have so much GPU spare capacity? It doesn't make any sense. Did Musk blindly order humongous amounts of GPUs years ago before any of us had any sense of the scale this was going to reach?

They acquired xAI

so why did xAI acquire so many GPUs but have no use for them today?

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

#660

Post by krupan »

dmix wrote: post #647
simonebrunozzi wrote: post #639

Earlier quoted context omitted.

I would bet that there is a nice clause in that contract that gives exit options to Google at year 1, 1.5, 2, etc. Perhaps they only need to pay $11B, or $16.5B, before exiting the contract. Plus, instead of getting nothing for these $11B/year, they surely get some compute power that should have some value.

So you think Google is going to spend $11B in hopes it will boost the value of the SpaceX stock, while pretending to public investors it's a multi-year thing, and then after 1yr sell off their SpaceX stock after the value rises while also ending the contract early? This site is turning into conspiracy central

I can't imagine why so many people would be looking for conspiracies now days /s
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