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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

#891

Post by jmkni »

credit_guy wrote: post #729
BLKNSLVR wrote: post #420

And SpaceX will spend $800M per month on Nvidia hardware purchase contacts, and Nvidia will spend $700M per month on Google services. I'm picturing a teenager blowing a bubble gum bubble bigger and bigger. I assume it can go on forever!

The doubt you are expressing was very justified until this week. But on June 1st, Microsoft changed the pricing for business and enterprise Copilot, and people started paying real money for using AI. Until that day, Github Copilot was charging users 4 cents per request (if they exceeded their subscription's monthly limit). Now, they charge at the API rate. I monitor my usage, and it's easily 10 times more expensive t…

This is an active conversation going on at my day job right now (and I suspect many other peoples too)

Every developer (we have about 100) has Github Copilot, and interestingly some barely use it while others use it a lot (about 70% of usage comes from a handful of devs), and the dashboard shows you exactly who is using which models, and how much

I definitely don't think they will just go along with paying 10/20x more than before without seeing some sort of return on that investment

We've already had the we're spending all this money on AI, why aren't we shipping software faster conversation multiple times

My prediction is that those high users, costing the most money, will be watched carefully (one colleague even suggested half-jokingly that whoever tops the leaderboard should have to give everyone else a presentation on what they spent all those AI credits on)

The sweet spot is to have good competent developers who users AI when it actually makes sense, but aren't dependent on it

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

#892

Post by throwwbonds »

Gareth321 wrote: post #580
davedx wrote: post #484

Earlier 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.

Bonds are no longer recommended. Current research indicates 100% equities to be the best composition leading up to, and past, retirement. To point, the economic uncertainties around geopolitics, AI, and war, plus irresponsible debt spending by governments and the prospect of QE (and higher inflation), is pushing long term rates steadily higher. There’s a reasonable chance that 30y treasuries are nearing 6% by the end…

Could you please link to the research?

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

#893

Post by _heimdall »

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…

Not to mention all the IPO rules changes that all but guarantee SPCX will be swept into 401ks and index funds in very short order.

They seem to believe the over valuation can be hidden if the shares get picked up by the public quickly enough or that the it can be a quick exit that leaves the public holding the bag.

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

#894

Post by dzhiurgis »

testing22321 wrote: post #719
gmd63 wrote: post #691

Earlier quoted context omitted.

No, the point is to implement laws that foster holistic growth, not gamesmanship that ends in terminal illness.

> holistic growth I have never before heard that term in regards to the economy. Everyone has always wanted maximum growth now, future be dammed.

People want to live now.

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

#895

Post by [deleted] »

senordevnyc wrote: post #548
solenoid0937 wrote: post #507

Earlier quoted context omitted.

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 always thought the psychological safety was exactly part of the point, since 100% equity portfolios do better in theory than practice, because people are more likely to panic sell.

[deleted]

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

#896

Post by credit_guy »

MichaelNolan wrote: post #791
credit_guy wrote: post #729

Earlier quoted context omitted.

The doubt you are expressing was very justified until this week. But on June 1st, Microsoft changed the pricing for business and enterprise Copilot, and people started paying real money for using AI. Until that day, Github Copilot was charging users 4 cents per request (if they exceeded their subscription's monthly limit). Now, they charge at the API rate. I monitor my usage, and it's easily 10 times more expensive t…

> but most of them will just pay 10 or 20 times or more for AI than they used to pay until now. At my work, after the GitHub price hike, we all got the option of 1. Keep using Github, but with the same total spend as before. i.e, use 1/20th as much since the dollar cap isn't changing. Or option 2, use as much self hosted DeepSeek v4 Pro, Qwen 3.6, Gemma4 as you want since it's almost free. (to be fair, we already had…

> to be fair, we already had the GPUs

Most businesses don't have the GPUs, or the knowledge necessary to do self-hosted inference. So, they'd have to rely on OpenRouter, or Ollama, or some other inference provider, but there are lots of problems with that. With Microsoft, people could get comfortable with the compliance side of the problem. They already use Outlook, and Office365. Copilot is just one more point where things can go wrong, but it's less scary than your emails being captured and held for ransom, and you already think Microsoft can take care of that. But with Ollama or OpenRouter, you have no idea what is happening with your data, and you also are not sure if they are serving the real models, or quantized versions.

To be sure, there will be plenty of people finding alternate solutions, but 80-90% of the businesses will just pay the higher price to Microsoft.

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

#898

Post by Gareth321 »

gommm wrote: post #767
k2enemy wrote: post #723

Earlier quoted context omitted.

> Bonds are no longer recommended. Current research indicates 100% equities to be the best composition leading up to, and past, retirement. Are you referring to Anarkulova et al? Might be worth mentioning that the fixed income part is replaced with international equity, not more domestic equity.

What would you recommend to increase international equity exposure? Index funds ETF like VWRA?

For most people, $VT (or VWRA) is optimal. You should have a U.S. tilt because most growth is coming out of the U.S. $VT will naturally rebalance into international equities on that growth. If you already have a U.S. heavy portfolio and want more international exposure, $VXUS.

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

#899

Post by mystraline »

rootusrootus wrote: post #336
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…

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…

We've been diversifying with physical metals.

Stocks, bonds, etc are effectively NFTs of "you own a monkey image". That monkey image can go poof on a 'market correction' aka 95% of investors lose everything.

With precious metals, you own the material. And silver, gold, platinum, palladium, rhodium and others have innate usage for a variety of industrial and jewelery uses. Their prices may change, but catalytics arent just going to bottom out.

We still have stocks, cause 401k's. But we also have a sizable metal buffer now.

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

#900

Post by adestefan »

preommr wrote: post #654
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.

This is exactly how the dot com crash happened. People point out this like pets.com, but that wasn’t the issue. It was the musical chairs the played with the fiber telecoms. Today it’s data centers.
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