Nathaniel Whittemore

Certainly heading into the SpaceX IPO later this week, both parties have a strong incentive to puff up the company.

For Google's part, they own a 6% stake in SpaceX that could be valued at $100 billion if the IPO hits its target.

To sum, the early termination clauses suggest the deal is all about boosting the stock over the short term.

Prominent short seller Jim Chanos posted, This nine-month contract has more easy outs than a kid's t-ball game.

The other interpretation, however, is that Elon's pivot to Cloud Kingmaker is succeeding.

Boring Business wrote, This is absolutely insane.

Elon Musk's XAI reportedly spent $40 billion to build their data centers.

Based on public disclosure of the Anthropic and Google deal,

XAI will get paid $26 billion per year to license the compute from these data centers.

That's a payback period of 18 months for all the data center spend from just two customers.

And you still think AI infrastructure CapEx is a bubble?

Now, to the extent that you're thinking, this is Elon's cloud strategy playing out according to plan, it's fairly unclear if there actually was a plan.

In September of last year, when XAI was in the middle of scaling Colossus 2, Elon posted, Step 1, buy a shitload of GPUs.

Step 2, question mark.

Step 3, profit.

And it now appears that step two is simply to have GPUs available during a compute crunch.

Maybe that was Elon's plan all along, but I think people are wildly discounting how much, just in advance of this IPO, Elon figured out how to make SpaceX make sense.

Yu Chenjin remarked, SpaceX has accidentally become the largest neocloud on Earth.

550k GPUs more than double CoreWeave.

Starlink is doing 15 billion ARR so GPU rentals is SpaceX's biggest business.