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

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

#681

Post by raincom » Sat, Jun 06, 2026, 9:58 PM UTC

jmbwell wrote: post #680

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…

Who benefits from all this brilliant deal making who doesn’t already have plenty of money? If we are going to invent money out of paperwork maneuvers, you’d think we could invent a way to fund healthcare and schools.

As long as they can cash out from these investments by dumping on others, they are safe.

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

#682

Post by idontpost » Sat, Jun 06, 2026, 10:01 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…

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

#683

Post by idontpost » Sat, Jun 06, 2026, 10:03 PM UTC

jmbwell wrote: post #680

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…

Who benefits from all this brilliant deal making who doesn’t already have plenty of money? If we are going to invent money out of paperwork maneuvers, you’d think we could invent a way to fund healthcare and schools.

[dead]

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

#684

Post by JumpCrisscross » Sat, Jun 06, 2026, 10:13 PM UTC

manlymuppet wrote: post #672

JumpCrisscross wrote: post #666

Earlier quoted context omitted.

> must be getting something out of this deal They’re getting compute. There was a free for all period when xAI did one smart thing and that’s build like there’s no tomorrow. Because tomorrow is today, and today jurisdictions are racing to pause datacenter construction.

I agree with you--this is my whole point. This deal can't just be financial engineering, since that wouldn't make sense. They must be getting something out of this, i.e. compute. Google is buying compute because they need it. That explanation works a lot better to me than one where Google is doing this purely for unrealized future gains on a minority stake in SpaceX.

> Google is buying compute because they need it

The fact that Google owns a stake in SpaceX doesn't hurt. But the multiple math is specious, and profitability math plain wrong.

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

#685

Post by JumpCrisscross » Sat, Jun 06, 2026, 10:14 PM UTC

adgjlsfhk1 wrote: post #673

JumpCrisscross wrote: post #619

Earlier quoted context omitted.

> no one has made a convincing case as to why putting a data center in space is a benefit that can come anywhere near the drawbacks Permitting. And the main drawback is cooling. If you want to sell a company to SpaceX, build a better radiator. I’m not saying the math maths. But it isn’t fundamentally fucked in the way a lot of armchair commentary has been making it out to be.

Even permitting isn't a clear win. You are changing from land permitting (where you can pick the location to be wherever you want) to launch permitting (where you have to coordinate with the federal government for airspace and water closures). Not to mention that with the current regulatory status, a rocket explosion can easily lead to a multi-month mandatory safety review that blocks all new launches.

> changing from land permitting (where you can pick the location to be wherever you want) to launch permitting (where you have to coordinate with the federal government for airspace and water closures)

One of these is orders of magnitudes longer and more complicated than the other. Land permitting always involves multiple layers of government. And most of them are causing months- to yearslong delays. (Power hook-up is another source of delay.) Launch permits are predictably issued by, essentially, a single regulator.

> a rocket explosion can easily lead to a multi-month mandatory safety review that blocks all new launches

Which is equivalent to a regular permiting delay.

The tradeoff is between the cost to launch radiator mass and the delays local and state governments cause in permiting. The first is mediated through launch costs. The latter through interest rates. And right now, the former is going down and the latter going up.

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

#686

Post by worik » Sat, Jun 06, 2026, 10:15 PM UTC

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 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.

Following the rules of passive indexes is the whole point.

Mēh! The passive indexes (biased to a momentum strategy, so not really passive - they are too big) may have had their day. The blatantly corrupt move to change the rules was clearly an attempt to game them, and even with out the rule change they will squeeze themselves through the rule gate with financial engineering

This will always be the trend in finance, the powerful manipulate the system to their benefit, the rest of us do what we can to survive....

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

#687

Post by jsnell » Sat, Jun 06, 2026, 10:18 PM UTC

otterley wrote: post #610

ppseafield wrote: post #579

Earlier quoted context omitted.

> 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…

But the OP very clearly did not write anything of that sort. Their claim was:

> This deal increases SpaceX's revenue by $11 billion per year.

And that is pretty obviously correct. This deal is Google is buying a service from SpaceX for $920M/month, not investing in SpaceX. And that is revenue for SpaceX. I don't know why you're so insistent it isn't.

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

#688

Post by Symbiote » Sat, Jun 06, 2026, 10:22 PM UTC

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…

Strangely, these limitations don't seem to have been present on the European platforms. (Although I've never bought shares in an IPO myself, so I'm not certain about this.)

e.g. with https://www.nordnet.dk/kampagner/ipo/spacex for Denmark.

The minimum is 1 share (~$135), the FAQ on "when can I sell" says "Once trading begins in SpaceX, you can sell your shares at the current market price, which can be both higher and lower than the IPO price."

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

#689

Post by worik » Sat, Jun 06, 2026, 10:22 PM UTC

JumpCrisscross wrote: post #665

0xffff2 wrote: post #657

Earlier quoted context omitted.

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?

Yes. But I’d caution to not conflating passive investing with indexing to a popular index. They sound similar. But most passive assets index to one of a variety of indices, many of them built in-house by various asset managers. (Vanguard, for example, is famous for doing this.)

Yes.

And just because yesterday's rules were "invest in S&P500" does not mean the governors of many (not all) funds cannot change the rules to dodge such blatant fraud

The managers of huge funds are not complete idiots- far from it- and they will do what they can, most of them, to fulfill their duties

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

#690

Post by ozgrakkurt » Sat, Jun 06, 2026, 10:26 PM UTC

missedthecue wrote: post #653

ozgrakkurt wrote: post #544

Earlier quoted context omitted.

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. Bu…

That example is a bit extreme but I can give two more normal examples.

Google/Nvidia and Apple/Nvidia. I don't think there is a world where nvidia will make more money than google or apple or keep making more money than them.

Also another one is Tesla. In my opinion, there is absolutely no world where tesla is worth the current stock price if you compare it to chineese companies or some company like Toyota.

Ofc at this point it depends on if you believe the stock market is absolutely correct or if it is correct in these specific examples. We can agree that it is correct in pricing Google higher than a car rental company but it is more complicated.

The prices are based on something but that something is so obscure and complicated that I don't see a way to make a calculation out of it outside of American ideology of stock market/capitalism.

> 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

This is just trivially related imo there is no real calculation between these things . And this relation it is breaking more and more lately as far as I can understand. This might mean stock market ideology is starting to diverge from the real world which is scary