Google to pay SpaceX $920 million a month for compute capacity at xAI data centers
www.cnbc.com
Ahead of a planned IPO, SpaceX inked a deal to rent compute capacity to Google for $920 million per month for 32 months.

Nevermind that colosus 2 of xAI was supposed to serve Grok, or expected (paying $60b for) Cursor composer models, and they are renting out capacity instead of using it…

Google has massive out clauses for following through on this BS deal. They are slightly overpaying, but in off chance that GB200 rental market is strong in 2027, they have the option of following through if they can resell capacity, though have full cancellation rights.

Google can dump 100% of their SpaceX shares prior to cancellation date. They also have 63% gradual dump rights ahead of most other locked up SpaceX investors.

SpaceX merger with xAI was based on lie of economic viability of space datacenters and terrafab, and IPO expands on the fraud, with so much of financial industry invested in the fraud.

    • humanspiral@lemmy.caOP
      4·
      2 days ago

      The need for more GPUs/datacenters was based on xAI using them for their own models, instead of competing with new datacenters/GPUs in the rental market. GPU rental prices went down to below cost levels for H series after Anthropic deal. It has bounced back this last week, but rates are still in the “very well supplied” range. On demand rates half of Anthropic/Google rental deals. GPU rental rates are the best measure of AI bubble point. Concerted fraud is still possible to provide the illusion of “this is fine”. The google deal only starts in September, while Anthropic got some free GPU time when deal was announced.

      In a way, pumping more money into AI (through IPO) delays the bubble pop, even if NVidia doesn’t sell as many GPUs if their customers add them to rental market. Bubble can pop from 3 directions. Less GPUs/TPUs sold than forecast; datacenter overcapacity ; understanding poor economics/tokenomics of high competition LLM labs.

      The sad part is that the more money invested, the greater the funding for the fraud, and longer lasting fraud.