Comment by keeda
11 hours ago
Google, of all companies, much vaunted (as in your comment!) for its huge infrastructure footprint, is renting compute from SpaceX to the tune of almost a billion a month: https://techcrunch.com/2026/06/05/google-will-pay-spacex-920...
This is in addition to bumping their CapEx spend to the extent their cash flow turned negative for the first time ever this quarter: https://arstechnica.com/google/2026/07/google-just-had-its-f...
The world doesn’t realize how desperately compute-crunched hyperscalers are to meet AI demand.
This is a better problem to have than SpaceX, which is renting out capacity obviously because it’s own AI products aren’t selling.
A deal with a company Google has a share of, announced a week before their IPO, with very non-committal terms and ramp period protections delivered in one large block on short term notice priced likely at the high end of what Google charges for A4X instances anyway.
I don’t think this reflects desperation as much as strategy.
I dunno if it's a sound strategy that involves repeatedly telling investors [1] and employees [2] over multiple quarters that you are desperate for compute, including leaving a triple-digit billion backlog on the table [3], and then spending so much on CapEx that you have your first negative cash flow quarter ever and taking the inevitable hit to the stock [4], while turning away a large paying customer (who also happen to be a competitor) [5] ;-)
[1] https://www.mindstudio.ai/blog/sundar-pichai-google-compute-...
[2] https://www.cnbc.com/2025/11/21/google-must-double-ai-servin...
[3] https://www.bloomberg.com/news/articles/2026-07-22/google-sa...
[4] https://arstechnica.com/google/2026/07/google-just-had-its-f...
[5] https://thenextweb.com/news/google-caps-meta-gemini-compute-...
$12B/year is nothing to a company that makes 11x as much in profit. The question is whether that $12B can be turned into more profit.
This move was purely to pump up SpaceX stock price at its current absurd valuation b/c Google owns something like 6% of SpaceX
By your own math, doing this would have required SpaceX stock to go up $200B just to break even, and then Google would have to liquidate it.