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by tristanj 10 days ago
The contract has an exit clause, either side can terminate the agreement with 90 days notice. I do not expect this contract to last the full 3-year term.

And this deal protects Google's investment. Google owns close to $100 billion of SpaceX stock. This deal increases SpaceX's revenue by 30%, and pushes SpaceX into profitability. With this deal, SpaceX is eligible for S&P inclusion. Assuming $6-7 trillion in S&P 500 tracked funds, and a 1% SpaceX weight after a year, this is $600-700 billion in demand for SpaceX stock. It means Google now has someone to unload its position off to. This play directly protects Google's investments.
3 comments
sirsinsalot 10 days ago
Not doing much to beat the accusations of circular dealing are they?
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clusmore 9 days ago
I think your point still stands, but a correction that 1% of $6-7T is $60-70B, not $600-700B.
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tristanj 9 days ago
My mistake, I'm running on a lack of sleep.
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otterley 9 days ago
> This deal increases SpaceX's revenue by 30%, and pushes SpaceX into profitability. With this deal, SpaceX is eligible for S&P inclusion.

You keep saying this even though you don’t present any evidence that it will make SpaceX profitable. Where are your numbers?

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tristanj 9 days ago
SpaceX announced $26B/year in compute deals with Anthropic and Google in the past week. The margins on both deals are incredibly high, Google is paying around $11.75/hour per GPU. Infrastructure costs are far below that, SpaceX likely has 70-90% margins. These two deals are around $20B/year profit. In the preliminary S-1, SpaceX reported a $5B loss in 2025. Combining these numbers, that's a $15B profit, assuming losses are constant. Likely expenditures will increase, but even if losses double, that's a very healthy $10B profit.
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otterley 9 days ago
Where did you get your costs and margins from? I have direct experience in this business and I can tell you they’re usually not that high. These machines are also not cheap to power, cool, and house.

As a comparison point, CoreWeave’s most recently reported operating margin was 16%.

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adestefan 9 days ago
And Google will exit at 12 months when the S&P seasoning period and 4 quarters of profitability are satisfied.
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