[benl]

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!

[matthewdgreen]

SpaceX's S-1 says they're going to make more than $320bn by 2030 at a 74% expected profit margin. That implies they're going to succeed at selling high-value AI services, not compute, which is a competive business with typical profit margins at or below 30%.

[discodave]

EC2 may have higher margins than that.

But your point stands, ain't no way xAI competing in that game.

[zdragnar]

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?

[benl]

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!

[Alive-in-2025]

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.

[benl]

Well yes it will be hard, and hence maybe not economical, and that’s why many people are skeptical of the business case (myself included btw).

But satellite cooling already exists (Starlink v2 satellites dissipate heat at over a kilowatt I believe), so that’s why other people find it plausible.

[XorNot]

They also need Starship at minimum, which is now a 10+ year old project still exploding regularly.

Starship is at minimum a 2030 project at this point.

And even producing the volume of chips needed for the type of growth space data centers would need to have to justify this would be another decade if construction started now on those fabs.

[doxeddaily]

A minimum of 2030? That seems excessively pessimistic.

[XorNot]

I don't see how: Starship is a very long running project at this point, and progress has been incremental. Productionizing the basic logistics systems like turning around re-usable launch vehicle took years for Falcon 9, and Starship's haven't even done that yet.

By the end of the year if it's not landing intact yet, now you're 2027.

I'd say 2030 is optimistic (the 2028 moon landing with Artemis straight up isn't going to happen IMO).

[SJC_Hacker]

Cooling in space does not seem like a hard problem to me. You absorb a certain amount of energy in a given time in the form of solar energy, you should be able to emit that. On top of that, in LEO you are only in solar orbit roughly 50% of the time

[jgoldshlag]

It is in fact very hard, and LEO is not "solar orbit". You want your datacenters in sunlight 100% of the time, to not need heavy batteries, which is possible, but cooling is in fact very hard

[doxeddaily]

SpaceX already has 10,000 satellites on orbit that are basically preview versions of space data centers. They've already paid 5 years of that 5-10 year timeline you outlined.

[adgjlsfhk1]

the math doesn't work. a starlink satellite has ~10kw power consumption. A single ai optimized server rack (GB300) is 140kw. Starlink works because you get a massive benefit from putting networking in space for rural users. no one has made a convincing case as to why putting a data center in space is a benefit that can come anywhere near the drawbacks (inability to service, launch cost, cooling etc)

[JumpCrisscross]

> no one has made a convincing case as to why putting a data center in space is a benefit that can come anywhere near the drawbacks

Permitting. And the main drawback is cooling. If you want to sell a company to SpaceX, build a better radiator.

I’m not saying the math maths. But it isn’t fundamentally fucked in the way a lot of armchair commentary has been making it out to be.

[wrsh07]

Google and friends continue to see increased demand for their wares. The bet is probably that SpaceX is one of the best-placed companies to deliver incremental compute. They've shown they can build data centers fast.

[TheOtherHobbes]

A cynic might wonder given Musk's implausible trajectory and questionable associations whether the X project is primarily a grift and/or money laundering project that happens to do high-profile tech, and the primary aim is to pump the stock and hope some other opportunity to pump it further arrives in the future.

Otherwise a dump works too. There's plenty of money to be made from carefully timed shorting.

The entire AI field has been plagued by circular financing deals, so this is not new. But it's new in aerospace, and the market institutions appear complicit.

Otherwise, why is this IPO getting such unique treatment on such flimsy fundamentals?

[ambicapter]

It's an opportunity to pay off early investors who are unhappy with him cratering Twitter, xAI, etc.