Google own 5-6% of the shares of SpaceX. SpaceX is seeking a valuation of $1.77T which means Google's shares would be worth $88.5B-$106.2B. I'm not a skeptic of AI/LLMs but this makes me deeply suspicious of these circular deals. What happens when the music stops?

> In comparison, SpaceX/xAI are incredible at building datacentres on time. The original Colossus 1 datacentre was built in 122 days. Musk's empire does have a huge advantage in really understanding how to plan, build and execute enormous infrastructure projects quickly

Without even mentioning that it was done illegally and the air pollution they are creating with gas turbines is wildly irresponsible

Polluting power generation, straining local power and broken promise after broken promise to fix the situation. And regulators caring more about helping xAI than mitigating the problems.

Edit: from the footnotes: > Colossus actually runs largely on its own on-site gas turbines, which comes out even cheaper: at a simple-cycle heat rate of ~10,000 Btu/kWh and Henry Hub gas at ~$3.50/MMBtu, the fuel bill is only around $90mn a year.

OK, that's crazy. How can I get into renting GPUs to hyperscalers?

I get the point the author is trying to make (in that SpaceX's most valuable asset is its compute capacity), but it's not quite the right analogy.

SpaceX is basically Elon's holding company for everything-but-Tesla at this point. If you're betting on SpaceX, you're betting on a conglomerate.

- roughly 1B revenue per month is a good look for SpaceX - provides some credibility to otherwise non-existent xAi business.

- pos. News for Google due to their share in SpaceX.

- can be interpreted as leasing versus building for Google, a nice Hedge on compute capacity.

- saves Capex for Google at time of horrendous GPU, memory costs.

It is only a bridge until 2029. What will be the value of the SpaceX data centers by then? Fine print matters on deal with Google. MS made billions up front payments to Coreweave. SpaceX has no upfront payments, has to stem Capex alone. Very favourable for Anthropic and Google.

  Provider     Compute Sold    Valuation
  --------     ------------    ---------
  Nebius       ~$46.4B         ~$55.3B
  CoreWeave    $99.4B          ~$55.8B
  SpaceX       ~$70+B          ?

I guess it’s very possible multiple people are coming up with the same idea at the same time but given this was submitted by the author it seems kinda rude not to mention it.

[1] https://news.ycombinator.com/threads?id=runako#48426082

A frontier model team having to fight their board on whether to monetize the datacenters directly or continue to invest in AI work is going to have a hard time.

  Total Cost = F(261) - F(0) 
             ≈ 5,220.00 - (-2,338.19) 
             ≈ 7,558.19

Holy F*ck.... SpaceX is going to be the most valuable company of all time by a long shot.

Yet when we learn of this new $26B in yearly revenue (2.2B/month from Google and Anthropic)the conversation does not return to that discussion. It transforms into:

"xAI's tech sucks"

"Google/SpaceX is Structurally Bad for the Economy"

etc

This is called motivated reasoning. We get new information and instead of the obvious thing, updating prior conclusions, we just find a different way to react negatively. The negative reaction will be achieved. The narrative here is completely polluted by people who dislike Elon/SpaceX.

Say it goes down 50%, then it suddenly appears cheap, when in reality that would still be way overpriced.

1. By law, they must pass through and distribute at least 90% of their taxable income to shareholders every year.

2. They pay 0% in corporate income taxes on the income they distribute, as long as they meet the 1st requirement.

xai is not even close on either. Terrible take. What they should have said -- xai is looking more like a hyper scaler, the aws for ai infra.

If they can't build enough capacity where their best option (and they're signing multi-BILLION dollar contracts) is an unproven 'datacenter in space' technology, we are toast.

- near term costs will go up (demand is greater than supply) - tokens shift from all you can eat (TOKENMAXXX) to ROI-driven - engineers with real orchestration skills rule and shift to lower cost optimization (deep seek) - Frontier AI unit economics collapse

I feel like there is some use case planned here that isn't to be known about until it's way too late to do something about it. Or this is a very serious bubble. One of the two or some really horrible blend.

- Raw materials: Silicon, electricity

- Data centers: turn raw materials into compute

- Model vendors: turn compute into tokens

The frontier labs are competing in the idea that their tokens are worth more $/mtok than the others. If you look at the cost/quality Pareto curves, yes OpenAI and Anthropic are in the corner of expensive & good. But you need a log scale on price to look at these charts because the Chinese models are almost as good for a small fraction of the price. For this business model to be sustainable they need to keep innovating faster than everybody else AND for the quality difference to stay meaningful. Neither of those seem like sure things or frankly even likely to happen.

In contrast, further down the supply chain, folks supplying compute and raw materials both seem to be providing solid services that will be useful in the long term.

The compute rental is driven by SpaceX AI likely driven by SpaceX side of the business.

It is not xAI.

Not a good look.

But the short term numbers may oddly provide the emotive juice necessary to fuel the gig "hey, look at their massive revenues!"

Pretty smart if that's what happens.

Because the GPUs go out of date.

if the bubble doesn't burst until then...

Moreover they're leasing compute - the actual infra around it is much less important - and how long does anyone expect heavily utilized GPUs to run? How likely is SpaceX to be able to re-lease this compute capacity? It will be broken down or out of date in 2-3 years.

This should be essentially ignored in the long term for SpaceX business prospects, and is low margin business that barely justifies a 10x earnings multiple let along a 100 revenue multiple for the xAI unit.

Except there is no gold. Or arguably that "gold" is prohibitively expensive to use (not just store, it deprecates fast) so the entire rush is being subsidized. Let's go! /s

https://www.cnbc.com/2026/03/11/musk-unveils-joint-tesla-xai...

If that ends up being viable and profitable, there is no realistic competition for decades. In this view, xAI earning a reputation as a reliable AI hyperscaler is just another tactic in that strategy.

The datacenter deals came after. But now, the man who promised the world an AI system that defends free speech and is “pro-human”, is instead selling to his competitors and lowering the daily app usage limits of his own Grok by an order of magnitude (really).

If you’re dealing with the world’s richest man, you can predict that money will come before other concerns despite other rhetoric. Interesting strategy though!

Edit: To be fair, they did decide that hardware was "the bottleneck" according to an interview I saw last year. But I firmly believe they underestimated the software problem (and their app was/is riddled with them).