Google will pay SpaceX $920M per month for compute
techcrunch.com198 points by ramanan 5 hours ago
198 points by ramanan 5 hours ago
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 5% of SpaceX, so they make 50 billion dollars. Google spends 10 billion and makes 50 billion, $40 billion profit.
The even better part is that because of this deal, SpaceX is now profitable. The S&P requires companies to demonstrate 12 months of profits before they can enter the S&P 500 index. SpaceX lobbied to have this profitability requirement removed, but S&P said no and refused to rewrite the rules.
Now with this incredible deal, SpaceX is now GAAP profitable under the existing rules, and they get to join the index next year without a rule change.
Truly a brilliant deal for everyone involved.
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 currently looking like an appreciating asset, will actually depreciate faster than aircraft in the long run.
P/E is price to earning. Price to revenue is P/S. AER's P/S is like 3, so the discrepancy is much worse than you think.
Sidenote: 3 is actually high. 94 is absolutely ridiculous.
The question on my mind is-is this IPO designed to rip off recreational passive investors and those of us that invest in retirement accounts?
Comparing SpaceX to an aircraft leasing company seems more foolish to me than a 94x multiple.
I understand the gist here, but come on. This is a generational company. It’s the only relevant space launch business, and has its tentacles deep in AI infrastructure as well. Maybe the AI bet is foolish — I don’t know — you should short it!
I am comparing SpaceX’s datacenter-and-GPU leasing business to aircraft leasing.
It’s possible, and common, for one large company to have multiple business lines, each worthy of a very different P/E multiplier. In principle you end up with a weighted average of some sort.
I would short xAI but the market can remain irrational longer than I can remain solvent. Plus all the foolishness to prop it up with other businesses just seems like bad accounting.
I don't think you can short it before the IPO happens. Well, unless you've got a few millions and go to a bank and have them make a product for you specifically. But for normal people, for now, not happening.
> If SpaceX maintains this revenue multiplier
Yeah, if a ridiculous premise is given you'll reach a ridiculous result.
It's not that ridiculous considering these are the current facts on the ground.
> Truly a brilliant deal for everyone involved.
Except for people who have pensions/investments in whole market class investments who become exposed to an over valued company with a propped up value.
If whole market means whole market, then such investments are exposed to companies who are fairly valued, companies who are massively overvalued, and companies who are massively undervalued, and the whole range in between.
If you want to start picking and choosing which companies are overvalued and which are undervalued, don’t invest in whole market funds. But most people are not good at that!
I don't understand this logic. Does whole market mean scamming companies too?
Yes. That’s what passive investing is. You give money to the passive fund, the passive fund buys the market. No regard to price or any other metric.
Also, there’s a long history of companies that people yell about being overvalued being the drivers of index returns, because one of the major drivers is growth rate, whereas retail investors tend to look mostly at current state.
The key there is "whole market." This is still a tiny sliver of the whole market and most people's exposure to it is minimal. Still a wealth extraction move ultimately, but like many other such moves, the few pull just a little from each of the many. Nobody individually goes broke, but the whole class gets slightly poorer. It takes a village to raise a billionaire!
If you want to play “active investor” and pick and choose what companies you invest in, don’t be surprised when you underperform the whole market.
SpaceX could rise to be a major winner that makes people a lot of money. And then what? You missed out and underperform the whole market.
Alternatively you may want to be a passive investor using the current rules for index inclusion, rather than having them altered to favor this loss-making trashcan on fire.
OK, but SpaceX is not printing money out of thin air. And neither does the stock market. Somebody will be left holding the bag eventually.
> masterful piece of financial engineering
Love how we assign positive adjectives to unethical practices by corporates
> SpaceX is trading at a whopping 94x revenue. This deal increases SpaceX's revenue by $11 billion per year. If SpaceX maintains this revenue multiplier, then the single deal boosts SpaceX's valuation by 94 x 11 billion = $1 trillion dollars.
That final number doesn't make sense: if you're trading shares at $X revenue, increasing the revenue by $Y multiplier doesn't increase the share price by the same multiplier.
Sure it might not stay at 94x. But as long as SpaceX trades above 20x revenue, Google makes money from this deal.
And the bigger play is this deal pushes SpaceX over the finish line for S&P 500 inclusion. That's worth tens of billions for everyone involved.
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.
That would require regulators to actually pay attention, something they haven’t done actively since a long, long time
First step would be to prevent the regulators from profiting to begin with.
In my experience, if we don't (meaningfully) root out corruption and ineptitude, we will continue to be governed+leveraged by one/both.
Outlaw what? Prevent companies from selling goods and services to each other?
Yes, if it's done with an intent to defraud the general population, which could be the case here. Effects and intent really matter when deciding actions.
Except the regulators first outlawed what is generally considered to have caused the great depression (savings banks allowed to invest, which translates to very, very rich people being allowed to take massive risks with poor people's money) ... then re-legalized it.
So not only are the regulators not going to allow things that cause another great depression, they're allowing the things that caused the first great depression too. They must want a rerun.
(Because if you don't allow this you're effectively demanding the extremely rich make good investments to stay rich ... and not even France, otherwise pretty socialist, dares to go that far)
it's not about that. it's about how it gets reported in their financials.
I think SpaceX should be valued on rockets n space n stuff, not how many magical calculator dollars they bring in.
Surely Google can "make compute go" for $1b/month. Nice way to avoid holding the bag, maybe?
I mean, we all understand that this is some sort of circular financial play, but at the end of the day Google is paying SpaceX $1 billion for compute. This is no different from AWS or Azure.
You're right. Share price isn't based purely on a multiplier of current revenue.
But they did need to shore up that p/e ratio. Got to assuage our inner Ben Graham.
SpaceX is valued at that revenue multiple because of its expected revenue growth rate.
This deal is part of that revenue growth. So the new revenue would be already partially or even fully priced-in.
Perhaps it reduces uncertainty around the growth rate, but expectations were already sky-high, as shown by the multiple!
As an ignoramus to these things.... there are only just so many Googles though. Having made a significant jump, are they really expected to continue that growth?
The bet is that demand for AI tokens will continue to grow exponentially. And that SpaceX will be able to deploy and rent out GPUs to serve those tokens faster than anyone else.
The wrinkle is that they are planning to deploy those GPUs in space. That’s what people are most skeptical about, I think!
Space data centers need years of time to design, build, and deploy, 5-10 at least, and that's after they solve their multiple very difficult or impossible problems. How will they cool them? There are just simple ideas like giant structures to radiate the heat away, but you say you need to put lots of mass in orbit?
Like fsd, will take decades to figure things out.
So SpaceX is selling inference capacity. Who else is? What were the competing offers for Google and Anthropic?
> and makes 50 billion
assuming google sells, the stock tanks, nobody wants to buy next year
is this masterful? more like a scam
Now with this incredible deal, SpaceX is now GAAP profitable under the existing rules, and they get to join the index next year without a rule change.
Didn't they also run up against a "minimum free float" rule?
> Truly a brilliant deal for everyone involved.
Same thing they used to say about Lehman.
I don’t think your math is correct. Profit is revenues minus expenses. Unless Google’s purchase of compute brings SpaceX’s revenues into profit territory (such that their total revenues exceed their expenses), SpaceX still won’t be profitable. This is accounting 101.
Google’s investment in SpaceX is completely orthogonal to the analysis. Equity investments aren’t revenue.
For your math to make sense, Google would have to sell its stake this year
There may be more to it than buying compute but what you're saying does not make sense for Google. More likely Google wants a good relationship with SpaceX and possibly to buoy the stock, but it's a bad NPV trade
On the other hand, google does not lose all the money in that deal. Computation is still expensive.
So at most they lose like 200M each month. Peanut compares to the potentially gain of the IPO.
Isn’t the revenue modifier a result and not the cause?
Would you really expect a company to increase proportionally in value when they increase their revenue?
> this single deal boosts SpaceX's valuation by 94 x 11 billion = $1 trillion dollars
That's not how valuations work. Also, it is not unlikely that SpaceX's valuation drops post-IPO (tech was 6.65% in the most recent trading session) due to its very rich valuation and a long tenured investor based that is probably looking to get liquid.
Google is renting compute from SpaceX because they need GPUs and SpaceX owns a huge supply of them and has excess capacity bc no one uses Grok. Google has stated that this is a temporary arrangement while they continue to build out their own capacity.
why revenue that barely cover the estimated revenue (and depending on assets yet to be acquired) boost valuation? is everyone an idiot?
Utterly nauseating. Why would google help prop up this company and its figurehead? Maybe this is finally the straw that breaks the camel’s back for me and google.
It seems like Silicon Valley has decided on solidarity among tech billionaires and they're gonna take average Americans' wealth to keep themselves semi-relevant globally as China assumes global dominance. This is after insulting and demeaning the rest of the world, they plan to try to sell anemic services to other countries in whose politics they're also meddling. Circular agreements promising to purchase goods and services without the money in the bank, but you can show your promissory note to a guy with his own promissory note who then writes you a new promissory note based on your first one to take to another guy with his promissory notes, look at all the paper.
Except they’re paying $30b (the deal is signed for almost 3 years), there’s no reason to believe that SpaceX maintains revenue multiples and this deal creates a trillion in value, liquid cash is not the same as pre-IPO shares. And finally, the deal comes down to $11 per hour of h100 equivalent, which is pretty much within market which experiences a severe lack of supply.
Do you really think its honest to call this Financial Engineering over Fraud?
No. The definition of fraud is "lying for financial gain". This doesn't qualify.
So masterful that a random guy on HN can see right through it.
Let’s just call it what it is. It’s just basic fraud. They created a very temporary revenue injection right around the time of the IPO to defraud investors as much as they possibly can. Some businesses do this kind of thing just before they die because…why not?
No it is not. You are conflating the colloquial definition of fraud, with the legal definition of fraud. Fraud has a defined meaning.
prompt engineering, harness engineering, agentic engineering, financial engineering
AI is really a pioneering engineering field
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 not. Meta trades at ~7x sales. Comcast is one of the best-run ISPs, and it pays a 5.5% dividend on a stock trading at < 1x sales.
To say SpaceX is overvalued is to even beginning to convey the magnitude of the situation. It's going to be very painful when the valuation normalizes.
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, no touch), but the world we live in today makes me have real doubts that the next few decades will look anything like the last few.
Plenty of hedged equity funds out there. Trade some performance for peace of mind.
Circular financing at its finest. And Self-dealing between the hyperscalers, openai, and anthropic.
google invests in anthropic and spacex - and shows appreciated values as earnings. Then it turns around and rents tpus to anthropic to show it as revenues. The main buyers and sellers for all of this are the hyperscalers, openai and anthropic.
It is a game of musical chairs while the party is still on.
Do companies like Uber, Tesla, etc ever intend to pay dividends? If a stock never intends to pay dividends, the value of the stock is simply the price the next shumck is willing to pay.
The value of the stock is your share in the underlying business. Because underlying business changes over time (hopefully for the better) you are not simply hoping another shmuck pays you more, like with tulips, whose underlying value does not change with time. You own a portion of a concern that is improving its own fortunes.
Furthermore, dividends are approved by the board once per quarter or once per year. A dividend on a stock is not a contractual guarantee like it is on a bond. Therefore, it cannot be a basis of value.
With your logic, Berkshire Hathaway is a long-running greater-fool tulip bubble whose shares are only bidded up by finding more shmucks.
Well, the value of the stock for people who essentially do not have any meaningful control of the business must essentially be tied to the expectation of some liquidity event down the line -- future cash flows. So this could come in the form of dividends, sale of the stock, bankruptcy proceedings, or a purchase of the business.
If I knew for certain (big if) that a business would never have a liquidity event and I couldn't transfer my ownership then it's dead capital for all intents and purposes and you could consider its value essentially $0, right?
Excellent question. They may not intend, today, to pay dividends. However, the same question could have been asked about the successful tech companies of the '00s. Companies don't like to start paying dividends until they are fairly certain of their future profit stream and therefore ability to continue paying (and increasing) the dividends in the future.
Apple, Oracle, Nvidia, Cisco, Alphabet, Meta, Salesforce, and Qualcomm all pay dividends now. It's not unreasonable to expect Uber and Tesla to pay in the future. However, the median time after IPO for similar companies to pay a dividend is close to 20 years. So we could expect Uber to perhaps wfstart paying sometime around 2039. Tesla...is Tesla so who knows?
How can SpaceX have so much GPU spare capacity? It doesn't make any sense.
Did Musk blindly order humongous amounts of GPUs years ago before any of us had any sense of the scale this was going to reach?
Google renting infra from xAI, I did not see that coming. My understanding of what computers are doing, what companies are doing and what governments are doing seems to be getting worse day by day.
Financial shenanigans aside, xAI seems to be buying hardware at breakneck speed. So why not?
https://techcrunch.com/2026/05/20/musks-xai-is-being-sued-ov...
I thought elon hates demis
> Google renting infra from xAI, I did not see that coming.
Actually that seems to be fairly logical? Hardware is what xAI has, and it's in great demand. So sell what makes you money. The real story here is that that xAI hardware is going to be running Gemini and not Grok. Which is to say: Grok basically failed as a frontier AI and they need to pivot to a business model which makes money.
Obviously not everything Musk did was wrong. xAI bought a ton of compute when it was possible to get it. But the product they were going to build with it failed and so now they're deciding to be a landlord.
This IPO is just insane. No way do you justify a $trillion+ valuation based on what amounts to a bunch of commoditized rent seeking endeavors. Datacenters are buildings and chips, and everyone can build those. Starlink is just an ISP with lots of competition at scale (they have the high bandwidth mobile market cornered, but that's a very small market!). Mars is at best a grift on public funding. Even satellite launch services are commoditized and competetive these days.
Could you please describe the other satellite launch services whose prices are competitive with SpaceX?
Keep in mind Google also rents GPUs via GCP, so they could be just reselling these to GCP customers?
Thing is though, Anthropic was really against the wall with lack of compute pre xAI deal. And tbh, Gemini reliability has been abysmal which probably points to real compute shortages.
And nearly _every_ major DC project is really up against it with massive delays, etc. Stargate UAE has been badly affected by the Iran conflict.
So maybe long term this isn't a great business, but _right now_ I'm not convinced it's all financial engineering. There is a enormous shortage of compute and xAI has a load of it _available now_.
Xai seems pointless, and they've got gpus needing to be used for something.
> Which is to say: Grok basically failed as a frontier AI and they need to pivot to a business model which makes money.
They can just run Grok as a local AI inside Tesla cars. It's actually really efficient as a compute platform because the Tesla cars are in motion at highway speeds, which gives you lots of free airflow for shedding waste heat via the car radiator. Way more efficient than trying to run AI on space satellites.
Grok is just DOA. No need to beat a dead horse. Even Musk got that thus the reason why he is renting the stuff it planned for Grok.
Grok has plenty of "non-woke AI" cred which will make it a preferred choice for lots of government-side and politically sensitive workloads.
I am pretty sure the gov gets an uncensored /heretic version of the AI models instead of the nanny stuff we get so Grok really doesn’t have a “killer” feature. Even for multi model passes(I.e used purely as a contrarian gate) it’s not really that great due the high rate of hallucinations.
What do you think the term woke actually means?
I think their point is less that it really means something and more that enough customers think it means something to provide economic opportunity
The only frontier lab to be selling the compute rather than inference seems to say more about this economic opportunity.
Who’s going to be paying for the energy? People have been floating using the cars as compute for years and it just doesn’t make any financial sense for anyone.
lol, not sure if this is a joke, but Teslas do not have anything close to the necessary hardware to run grok locally.
Teslas spend a tiny percentage of their life at highway speeds, and a major selling point of the platform is that their compute would be used to pilot the vehicle.
If they could train using Teslas they wouldn't have needed Dojo.
You make it sound like they’ve given up on Grok, which I don’t think is accurate. I think it’s been mentioned the Grok 5 1.5T model is currently training on Colossus 2. And their recent deal with cursor is part of being able to eventually compete with Anthropic for agentic coding.
Strongly agree with all of this, except that charging rent for the use of an asset you own is not what economic "rent-seeking" means. I blame the dumbass economists who named it this, forever polluting the discussion to be had about regulatory capture and legalized political bribery.
They're struggling.
The future needs more AI compute. No one has enough AI compute.
Memory chip vendors are betting hard on this being a temporary state of affairs that doesn't last, and doesn't warrant commissioning a shitton of new memory foundries.
Musk is betting hard on this staying that way, and is putting the next Colossus into the last place not corrupted by NIMBYs... SPACE!
> $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?
You guys don't understand. Banks like JPMC will make billions on this IPO. Doing everything to prop it
Maybe that was the handshake deal from twitter financing, twitter exit and so on. "I will make you whole".
I do not know, but I wonder if someone can tally the bankers from twitter buy, twitter merge into xAI and the new spaceX launch.
A huge chunk of SoaceX value in their filing is attributed to their AI technology (aka Grok). I believe it’s 90% or more… Now, it seems they’re leasing the infrastructure required for Grok to scale to Anthropic and Google. I wonder how that math works…
But what is xAI? I thought that was the company that had the compute + Grok, the AI company? Since when does SpaceX (which I thought was a space company?) own AI-compute hardware and/or can do model hosting? Are all of Musks companies just one big thing now where the names no longer matter, or how is it supposed to work?
Edit: seems I'm just a bit behind: "xAI — now part of SpaceX ", seems really strange for a space company to buy an AI company, but I guess rather that, than the other way around.
I think some justify it as SpaceX plans to offer hosting in space, and then use Starlink to distribute it.
Musk sold Twitter into xAI which he then sold into SpaceX as a financial engineering effort to lessen the impact of massive debts and cash burn. The IPO and some clever structuring is the final step in the process.
Next up Tesla and SpaceX are going to merge and that will another round of synergies where Tesla and Vision AI (in FSD) and xAI.
Not really strange... if the goal is to go to mars, you probably need robots, those need intelligence -> ai. It fits pretty well, especially because you want to own all the core technologies as a company.
Why 4-5 companies instead of one then? I thought the goal of SpaceX was to get to Mars, why does xAI need to have that same goal? Or he didn't think xAI was suitable for that goal, then changed his mind so merged the companies?
You are overthinking this. The whole purpose of the SpaceX / xAI merger is for Musk to launder his failing companies to make them more palatable to the public. Not unlike the complex Mortgage Backed Securities of the GFC era which had a ton of low quality debt but yet were somehow assigned spotless credit ratings. Twitter is also being rolled up into SpaceX for the same reason.
The stated goal is to "go to mars", the real goal is to make money.
He sold his failing but hype business to his soon-to-IPO successful but kinda boring business.
It's a way of laundering the debt and dumping into investors as he pitted different indexes against each other to force his way into one of them, and have people's 401k buy into them. Its a ton of money.
I wouldn't be surprised if Tesla is bought into spaceX in the future.
He’s a drug addict and sociopath. Also has very thin skin (and hair) so he does stupid shit. Somehow we are all left holding the bag on his BS.
It has nothing to do with Grok, at least not the current iteration. SpaceX is the only company that can concievably launch large scale orbital compute.
I’m out of the loop, why is compute better /after/ being launched into space? Is the idea just to be co-located within the ISP to reduce round trip time to the LLMs?
Is there any data on whether Google, Amazon, Microsoft, Anthropic, OpenAI etc are most cost efficient in getting datacenter compute online and operating it?
I'd be interested in how large the range is here across company and region and specific data center and how it relates to companies like Hetzner if at all.
Well, Elon seems to take the fastest path possible to these DCs. One can envision a future where these get shut down for the severity of the pollution, not to mention being built and operated illegally [0].
[0] https://www.selc.org/news/xai-built-an-illegal-power-plant-t...
Which is precisely why there has been a push to weaken the EPA and other regulating agencies
> Is there any data on whether Google, Amazon, Microsoft, Anthropic, OpenAI etc are most cost efficient in getting datacenter compute online and operating it?
Well considering that ~80% of the price is hardware deprecation, I don't know why they'd be considerably worse than anyone else at negotiating hardware deals.
Typically when you buy in bulk, you have more sway.
Companies like Google also have in-house chips like TPUs that are substantially cheaper for inference for them to make than anyone else can get through Nvidia.
I’ve seen some numbers related to datacenters in Ireland and they would stress price per MW as a way to see where to build them. But then you have depreciation of equipment as well. Depreciation can be played with when filing taxes though.
I don't think they are most efficient for small GPUs. I think they might only be the one which have capex and certainty required for multimillion dollar purchase of GB200 NVL72 or something of that scale.
that's asking the cart before the horse; is there any data on what compute actually results in real GDP improvements?
These deals are part of how the AI economy operates. Amodei has explained this in his recent Patel podcast.
1. Building datacenters takes time. Months, if not years. They take billions of investment.
2. AI revenue is highly unpredictable. Sure, you can make predictions, but maybe your competitor releases a better model 2 weeks after your release, maybe the new model you built isn't as much better, maybe the chinese models steal your show, etc.
3. AI revenue grows a lot. Anthropic's case is 10x per year.
4. So if you are off by just a year in terms of how much GPU you actually need, then that means a 90% of your compute capacity is wasted, and you go bankrupt.
As a solution, companies buy compute from each other! If one company's model did well, they can buy compute from the company whose model didn't do well (like in the case of grok). It's beneficial for both sides, so positive sum game. So deals like this aren't something bad in itself.
It's nothing new either. In SAAS deals, you often commit to a certain revenue and then pay extra if your revenue exceeds that amount. And power market is cut in two as well: longer term deals plus spot markets. Spot prices are way higher than the longer term deal prices.
Given it's SpaceX of course there is financial engineering involved: the GPUs aren't actually owned by SpaceX but a daughter company, and it's been financed via loans that are backed by pension funds. So it's already the case that pension funds back bear the risks associated with SpaceX's operations.
Right now, the bulk of the AI bubble sits in such debt statements and not in public markets.
380 dollars per second... Good to know I could afford my own data center for an appreciable fraction of a minute.
plus $473 per second from Anthropic
> As part of that deal, Anthropic agreed to pay SpaceX $1.25 billion per month through 2029 to rent all the available compute from its Colossus 1 data center near Memphis, Tennessee, that xAI — now part of SpaceX — originally built for its own artificial intelligence efforts.
I don't get why SpaceX is going public. But anyway, well played, the whole crypto mining that dried out GPUs back in the day seems tiny now.
> I don't get why SpaceX is going public.
Liquidity for investors. They raised everything they could from private markets, government contract, debt, the remaining source of financing is from the public
“If we fail to deliver access to the committed amount of GPUs by September 30, 2026, then following a one-month grace period, Google may immediately terminate the agreement or accept the number of GPUs provided, with a corresponding pro rata reduction in the monthly fees. After December 31, 2026, the agreement may be terminated by either party upon 90 days' notice.”
https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
It’s only to boost the IPO price. The agreement will last only a few months on paper. I doubt it is a real transaction.
Either that or SpaceX is permanently turning xAI's assets into a neocloud because xAI itself has no traction.
The whole thing looks rather desperate. I wonder what SpaceX's margins are on these contracts.
SpaceX has recently started pitching itself as an orbital datacenter company.
If you buy into that business model (or pretend to), it makes sense for SpaceX to start selling compute early. Their "earthside compute" clients of today are "skyside compute" clients of tomorrow.
A part of Musk's old pitch for Starlink was: space-based solar makes perfect sense for powering space assets, and no sense whatsoever for powering Earth assets. So you have to find a way to use that power in space to do something economically useful. Comms were the only scalable way to do that, so Starlink it was.
I can see how space-based datacenters would follow the same logic. If SpaceX can make them economical, that is. There's no guarantees of that - but if anyone at all can make space-based datacenters economical, it's SpaceX.
> if anyone at all can make space-based datacenters economical, it's SpaceX
Let's hope burning ten thousand tons of toxic e-waste annually in upper atmoshphere never becomes economical. Or mankind gets to senses and bans externalizing your e-waste problem by burning in atmosphere...
> ...burning ten thousand tons of toxic e-waste annually...
Expressing water usage in gallons makes it seem really large, too. NASA says[0]:
Scientists estimate that about 48.5 tons (44 tonnes or 44,000 kilograms) of meteoritic material falls on Earth each day.
I think we'll be fine. Pour all that frustrated energy you have into substantially reducing the amount of incredibly hazardous d-waste [3] big commercial operators burn up into our atmosphere, instead.
[0] <https://science.nasa.gov/solar-system/meteors-meteorites/#h-...>
[1] According to [2] there are currently 10,413 satellites. At an assumed 1760 lbs each, this works out to roughly 10.4 tons.
[2] <https://www.space.com/spacex-starlink-satellites.html>
[3] "dino"-waste, AKA CO2
I think you missed a factor of 1000 somewhere in there: Each satellite weighs about 1 ton, there are about 10,000 of them. That is 10,000 tons in orbit for the constellation, not 10. Assuming a 5 year decay, that's 10000/5/365 ~= 5 tons / day. Still about 10% of the natural incoming material, but considerably more than your "six hours worth per year".
Why would it ever be more economical to put datacenters in orbit, rather than on some dirt cheap land?
There are no NIMBYs in space. No government permitting on land use. And solar power is plentiful. It's like having a dollar store Dyson sphere.
Making use of that is predicated entirely on being able to put a lot of hardware into space cheaply. SpaceX is the undisputed best at that, no one comes close. The question is whether their "best" is good enough to make space datacenters economical.
There are many Not In My Orbit people on this very page. Many current national politicians would be happy to vote AI out of orbit today. Space is not an escape from earthly politics.
But you don't have to build it in someone's _backyard_, just build it in a middle of nowhere.
I am surprised how many people say that there is no reason to put data centers in orbit, when, at the same time, data centers are becoming the hated thing du jour all over the US and politicians left and right (but mostly left-of-center) are touting bans and restrictions to their electorates.
It is definitely to escape most political pressures on Earth. They will never be able to sidestep the US feds, but aside from an open war with China or Russia, all other authorities are out of the game when it comes to space.
That won’t ever be the case. It’s pure grift. There is literally no other actual reason
Because dirt cheap land usually does not have dirt, cheap water or dirt cheap electricity.
Water in orbit: famously cheap.
Ah yes: computation. Famous for annihilating water. Every bit you flip consumes an H2O molecule.
My job is mostly worrying about cooling paths, maintenance, power, heat transfer, lifetime of GPUs, and high performance networks. NVIDIA partner. I can drive to the datacenter. This stuff BARELY works here on Earth. Especially thermal issues.
Looking forward to watching spacex defeat physics.
Well, how do you cool servers in space then?
Evaporative cooling is the way it happens down on earth - and that shuttles h2o molecules from dense useful clumps like aquifers and rivers to a less useful form spread out in the air. But evaporating h2o isn’t an option in space afaik - since there’s a shortage of air to take up the h2o. In fact I think radiative cooling is the only actual option in space.
That's the neat thing: you don't, or at least not in the megawatt range. A kilowatt can be done with radiative cooling but doesn't get you far with a hypothetical datacenter satellite.