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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

#901

Post by adestefan »

tristanj wrote: post #851
otterley wrote: post #795

Earlier quoted context omitted.

> This deal increases SpaceX's revenue by 30%, and pushes SpaceX into profitability. With this deal, SpaceX is eligible for S&P inclusion. You keep saying this even though you don’t present any evidence that it will make SpaceX profitable. Where are your numbers?

SpaceX announced $26B/year in compute deals with Anthropic and Google in the past week. The margins on both deals are incredibly high, Google is paying around $11.75/hour per GPU. Infrastructure costs are far below that, SpaceX likely has 70-90% margins. These two deals are around $20B/year profit. In the preliminary S-1, SpaceX reported a $5B loss in 2025. Combining these numbers, that's a $15B profit, assuming loss…

And Google will exit at 12 months when the S&P seasoning period and 4 quarters of profitability are satisfied.

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

#902

Post by Marazan »

randerson wrote: post #749
gretch wrote: post #662

Earlier quoted context omitted.

> Anyone who holds bonds in this market will likely lose money. Yes, you lose money (or more precisely you lose opportunity) but you gain certainty. Which is what you want for retirement That’s pretty much the definition of risk premium.

Bonds only give you certainty to the extent that inflation remains certain. Stocks generally rise with inflation, whereas bonds continue paying out the same nominal amount, which buys you less over time. As a retiree I'm 50/45/5 in stocks/bonds/cash, having opted for a conservative portfolio. The stocks are the only reason I haven't lost buying power. But the bonds have performed so poorly that I've barely kept up wi…

That's why you buy inflation linked bonds

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

#903

Post by brainwad »

tgsovlerkhgsel wrote: post #656
brainwad wrote: post #428

Earlier quoted context omitted.

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.

Yes but 90% of the value is supposed to come from xAI, where you decidedly don't need to be a space company to compete. The space part of SpaceX literally doesn't matter, it's an AI company according to its financials. If you need to care about the space parts, the company is overvalued by an order of magnitude or more.

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

#905

Post by MichaelNolan »

credit_guy wrote: post #896
MichaelNolan wrote: post #791

Earlier quoted context omitted.

> 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…

For sure not everyone can self host (though I suspect most tech and tech adjacent companies can).

But all the existing “safe/trusted” cloud providers will offer cheaper models. The choice won’t just be GitHub vs OpenRouter. It will be DeepSeek, qwen, Gemma on GitHub vs Opus on GitHub. I’m sure AWS, GCP, Azure, etc will be happy to sell open weight models. And those lower priced models will put a cap on how many people pay for higher priced models.

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

#906

Post by chrisweekly »

dhosek wrote: post #764
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.

That’s been something I’ve started doing. The nice part of the bond chunk of my investment portfolio is the current income aspect of it, with monthly dividends that give an annualized return of a touch under 4% on top of the capital growth.

4% on top of the capital growth? Please ELI5.

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

#907

Post by GuB-42 »

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…

The theory I have seen when they say we should convert into bounds near retirement is that you don't really get to decide when to sell, that's money you need to live. And if you are unlucky enough to need money when there is a market crash, you are screwed.

Bounds are not as volatile, so even if you lose some money from inflation, you are less likely to lose a lot of money, money you need to live, from the whims of the market. You want to protect your capital, yields don't matter as much if you near the end of your life.

If you are younger, and you make reasonable investments and not gambles, you can expect that your value will go up (more so than with bounds) within a decade or two, and because you have income, you don't need that money and you can wait for the market to recover before selling.

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

#908

Post by l23k4 »

worik wrote: post #844
l23k4 wrote: post #832

Earlier quoted context omitted.

>Following the rules of passive indexes is the whole point. The whole point of these indices is to represent the market, the rules are unsustainable if they cause too big of a divergence from that goal. > The blatantly corrupt move to change the rules Why do you think nobody in the financial press is reporting on this blatant corruption? Is it because this conspiracy also includes all of the news media?

> Why do you think nobody in the financial press is reporting on this blatant corruption? They are

Why is nobody able to link this reporting? Google doesn't find it either.

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

#909

Post by otterley »

tristanj wrote: post #851
otterley wrote: post #795

Earlier quoted context omitted.

> This deal increases SpaceX's revenue by 30%, and pushes SpaceX into profitability. With this deal, SpaceX is eligible for S&P inclusion. You keep saying this even though you don’t present any evidence that it will make SpaceX profitable. Where are your numbers?

SpaceX announced $26B/year in compute deals with Anthropic and Google in the past week. The margins on both deals are incredibly high, Google is paying around $11.75/hour per GPU. Infrastructure costs are far below that, SpaceX likely has 70-90% margins. These two deals are around $20B/year profit. In the preliminary S-1, SpaceX reported a $5B loss in 2025. Combining these numbers, that's a $15B profit, assuming loss…

Where did you get your costs and margins from? I have direct experience in this business and I can tell you they’re usually not that high. These machines are also not cheap to power, cool, and house.

As a comparison point, CoreWeave’s most recently reported operating margin was 16%.

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