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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

#911

Post by tcp_handshaker »

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…

This is like BMW bragging about their thriving auto business while renting all their car factories to Toyota.

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

#912

Post by notatoad »

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

they're spending $11B on compute because they need the compute and that's the market rate for it. it's the same price Anthropic is paying to spacex for compute.

but if they boost the spacex stock for the right amount of time, they can get that compute for free instead of for $11B. Google's own announcement of the deal frames it as a short-term agreement while they scale up their own datacenter capacity.

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

#913

Post by mmcwilliams »

elcritch wrote: post #783
mmcwilliams wrote: post #525

Earlier quoted context omitted.

Can you provide a good example of something that is currently hosted in space and distributed via satellite?

GPS..

You believe that GPS is hosted on servers in space?

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

#914

Post by gigatexal »

mtlmtlmtlmtl wrote: post #704
gigatexal wrote: post #357

Earlier quoted context omitted.

I think the op was being a bit satirical

I don't think so, considering a substantial proportion of their comments on this site seems to be fanboying for SpaceX in particular and anything AI in general.

s/think/hope ?

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

#915

Post by tgsovlerkhgsel »

brainwad wrote: post #903
tgsovlerkhgsel wrote: post #656

Earlier quoted context omitted.

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.

To be overvalued by an order of magnitude, it'd have to have a fair valuation of under $180 B.

At ~5 billion per year in profit, Starlink alone would justify a 100 B valuation at a P/E ratio of 20 (i.e. assuming a non-growth company). If you account for the fact that this is very much a growth company, the valuation of the space part alone is well above these $180B.

And they do happen to have the launch and AI businesses on top of it, which (as usual for growth companies) may not be obscenely profitable but aren't worthless.

If 90% of the value is from the AI business, it's grossly undervalued.

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

#916

Post by gitaarik »

cherry_tree wrote: post #870
gitaarik wrote: post #835

Earlier quoted context omitted.

That's maybe a bit of an unfair, out-of-balance comment. Google Gemini had it's own fails on the other side of the extreme. Both have corrected themselves. Don't keep coming up with old stuff.

[flagged]

I'm not saying that, it's the opposite: Gemini generated too-woke images, like all images of people was like at least 50% colored, no matter what, even if you asked it to generate images of German World War 2 soldiers, it mostly generated black people in nazi uniforms.

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

#917

Post by bmitc »

LadyCailin wrote: post #880
mullingitover wrote: post #859

Earlier quoted context omitted.

If you bribe five members of the Supreme Court, the Constitution can be whatever you want it to be.

Sure, and Denmark might sneak attack Maine. But what’s the point of wild speculation.

You're acting like the landscape of law hasn't changed and been affected drastically by the purchased Supreme Court justices. That has literally happened. It's not a hypothetical or speculation.

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

#918

Post by omgwtfbyobbq »

tsimionescu wrote: post #873
omgwtfbyobbq wrote: post #793

Earlier quoted context omitted.

It might be. It might not be. That's where the money is or isn't. I think the mature part of their business is 3/Y, energy storage, and maybe cybertruck, although I also think it's too early to call it because it depends on lower cost cell in house cell production and they only started that recently. In the near term, the growth part is Semi, cybercab, FSD, lithium cell production, and maybe cybertruck. In the long t…

Semi is DoA, FSD has been 1 year away for 10 years now give or take, cybercab is flailing, cybertruck same, and China is eating everyone's lunch on lithium cells.

What you're saying about Semi and cybercab is what everyone said about S/X and 3/Y.

https://www.wired.com/2009/10/audi-etron/

They might might fail, but I wouldn't bet on it. Also cybercab isn't out yet, so any discussion is premature at best.

Cybertruck has been disappointing, but I think a big part of that is cost. They started in house dry 4680 cell/pack production a couple months ago, so we'll see how that goes over the next few years.

Even with China subsidizing cell production and being dominant in the world market, Tesla is still at 150gwh/year compared to 200gwh/year from BYD.

The big question is how the dry cell 4680 packs will perform and how well they can scale production if performance is adequate.

FSD is always a year away, but that's generally OK as long as it keeps improving and there isn't a comparable product in their cost bracket. If someone leapfrogs them, they're done. If not, they might be able to roll everything up all the way through Optimus.

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

#919

Post by zuzululu »

throwaway2037 wrote: post #770
tony69 wrote: post #353

Earlier quoted context omitted.

Plenty of hedged equity funds out there. Trade some performance for peace of mind.

What is a "hedged equity fund"? Can you provide an example?

there's no such thing. He's talking about L/S funds. The market neutral funds survive by capitalizing edge cases but during real market turmoil the whole thing blows up.

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

#920

Post by Robotbeat »

SkiFire13 wrote: post #874
Octoth0rpe wrote: post #862

Earlier quoted context omitted.

Many people think their claimed TAM is total fiction, and attempting an actual realistic TAM relies far more heavily on starlink. From morningstar: > Our base-case forecast entails $56 billion in revenue for Starlink in these niche and growth areas by 2035, representing about 45% of the identifiable market we’ve sized source: https://www.morningstar.com/stocks/spacex-what-investors-nee...

> Many people think their claimed TAM is total fiction, and attempting an actual realistic TAM relies far more heavily on starlink. Then either the TAM for Starlink is ~20x bigger than reported by SpaceX (I doubt they would downplay themselves in such a way) or the whole SpaceX TAM is ~5x smaller (much more realistic, if not more than that)

I think the TAM for both is reasonable (it's just generic "Enterprise" stuff, at the end of the day), but I think Starlink is better able to capture a larger portion of its TAM.
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