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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

#771

Post by thelastgallon »

throwawaycan wrote: post #763
omgwtfbyobbq wrote: post #761

Earlier quoted context omitted.

PE isn't a great way to value a company in their growth phase. Amazon's PE in 2013 was 3000+, but you'd still be up almost 20x if you purchased their stock back then. https://www.theglobeandmail.com/investing/markets/markets-ne... That doesn't mean Tesla or SpaceX are good buys though. Maybe they are, maybe they aren't.

Bus Tesla isn’t in anything looking like a growth phase

2024 total deliveries: 1,789,226

2025 total deliveries: 1,636,129

8% decline YOY, Tesla shut down production of Model S & X. Eventually, they will become a pure speculation as a service stock, with zero production. But its cheaper to produce than bitcoin, no energy needs to be expended, runs on pure Musk energy!

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

#772

Post by BobbyTables2 »

I serious doubt Google is doing this for the spare datacenter capacity.

This is a ridiculous amount of money.

Have to believe a non-tech company could hire an entire team/company to build datacenters for this kind of money.

Make no mistake - this has to be “do evil” territory.

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

#773

Post by bsder »

davedx wrote: post #484
rootusrootus wrote: post #336

Earlier 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.

One of the lessons from 2008 is that even the contrary position gets obliterated when the whole damn system implodes.

So, the optimists all swim in the cash while your contrary position fails to keep pace with the bull market; and then the bear market hits and you all get obliterated equally.

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

#774

Post by sroussey »

throwawaycan wrote: post #763
omgwtfbyobbq wrote: post #761

Earlier quoted context omitted.

PE isn't a great way to value a company in their growth phase. Amazon's PE in 2013 was 3000+, but you'd still be up almost 20x if you purchased their stock back then. https://www.theglobeandmail.com/investing/markets/markets-ne... That doesn't mean Tesla or SpaceX are good buys though. Maybe they are, maybe they aren't.

Bus Tesla isn’t in anything looking like a growth phase

It is in the shrinking stage with robot dreams.

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

#775

Post by overfeed »

fc417fc802 wrote: post #737
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…

> Comcast is one of the best-run ISPs You mean the company with such a bad reputation that it had to aggressively rebrand? I take it you've never had the displeasure of doing business with them. That said it wouldn't surprise me in the slightest to learn that it was one of the most profitable ISPs for investors. That would fit quite well with the general theme of prioritizing the interests of investors over all else.

> That would fit quite well with the general theme of prioritizing the interests of investors over all else.

It's not a "general theme", it's right there in the name of the economic system.

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

#776

Post by marcosdumay »

fc417fc802 wrote: post #724
marcosdumay wrote: post #494

Earlier quoted context omitted.

That's not right. This works a couple orders of magnitude better on the ground than on space (unless your computers run at several hundred °C). The reason people don't do it here is because it's too expensive.

What isn't right? I pointed out that if you adhere to the same power density then cooling is no longer a challenge on earth (in reply to the observation that cooling a DC on earth is one of the biggest challenges). For the record the equilibrium temperature in earth orbit is above freezing but below room temperature. Cooling won't be a problem at all unless you bring along a self contained power source. Heat distribu…

The idea that passive radiators don't work on the ground isn't right. I wrote it badly, the core of your argument is really fine.

The reason we don't use them is because the other options are cheaper. But passive radiators on the ground are orders of magnitude cheaper than on space because they can use convection and conduction.

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

#777

Post by sroussey »

davedx wrote: post #478
rootusrootus wrote: post #336

Earlier 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…

Eh, Tesla had a relatively normal growth company valuation for a while when they were growing strongly. The problem is the stock still hasn't compressed the multiple back down as growth stagnated... because the market swapped out "valuation based growth" for "call option on robotaxi success" at the blink of an eye.

The truly terrifying thing is that someone could short the Musk companies, and with one bullet can cause them to drop 50-90% right away (thanks to meme-ness). And they are valued so high that such a person could make billions overnight, maybe 10s of billions. Terrifying to be Must or anyone that shares a car or plane with him.

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

#778

Post by sroussey »

djfergus wrote: post #728
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…

I feel like your analysis is correct and it’s overvalued but employees and insiders have already been selling shares (eg on platforms like Forge) for around the $130-135 IPO price. So there are buyers, question is if there is enough to consume the liquidity of a $75B IPO.

I think there will be plenty of demand. Most of which is not bothered by price at all.

When the indexes get in -- watch out!

They will have to buy so much SpaceX, that it will force them to sell everything else.

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

#779

Post by [deleted] »

ww520 wrote: post #415
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?

Plus electricity, labor, and maintenance?

[deleted]

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

#780

Post by elcritch »

fooqux wrote: post #235
chrisandchris wrote: post #231

Earlier quoted context omitted.

I rreally dislike how big corp figured out that the can sell stuff to each other without actually moving some good. Looking at you, Nvidia... I have a feeling that the ordinary people will again pay for that.

This sounds exactly like the kind of thing that will be outlawed in thirty years after tracing back the root cause of the second great depression.

Perhaps but the AI drone based WW3 might put nvidia in the black before that.
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