Summarizer

> But being able to pull if off implies an ability to do a lot more interesting things. Those interesting things won't pump up the perceived value of Musk companies to stratospheric levels - or dare I say - to the moon. He needs the public to believe that to earn the trillion-dollar package from the Tesla-Twitter-SpaceX conglomerate, even if the latter turns out to be the only profitable arm of the conglomerate.

This is a question that analysts don't even ask on earnings calls for companies with lowly earthbound datacenters full of the same GPUs. The stock moves based on the same promise that's already unchecked without this new "in space" suffix: We'll build datacenters using money we don't have yet, fill them with GPUs we haven't secured or even sourced, power them with infrastructure that can't be built in the promised time, and profit on their inference time over an ever-increasing (on paper) lifespan.

Nope, it's 100% about building the stock valuation of SpaceX for an IPO in the face of significant risk from a cold war its CEO started on X with the U.S. federal government and increasing competition from Blue Origin, Quinfan and Guowang. DOD will play Bedrock vs Grok until there is feature parity and then make a decision not based on the features. Disclaimer: Not an Elon hater, but far from a sycophant, similar to how I felt about Steve Jobs for 40+ years.

Exactly, this is about attaching the AI hype bubble to all of his dealings before he offloads with an IPO (that still leaves him with 75% of the stock).

> The whole thing makes no sense and is seems like it's just Musk doing financial manipulation again. It's a fig leaf for getting two IPOs in one. There's no sense in analyzing it any further.

The deal they made values xAI at $230 Billion. It’s a made up number, with no trustworthy financial justification to back it up. It is set to provide a certain return to xAI’s investors (the valuation decides the amount you get per share), who in turn are bailing out the earlier acquisition of X (Twitter). All of this is basically a shell game where Elon is using one company to bail out another. It’s a way of reducing the risk of new ventures by spreading them out between his companies. It’s also really bad for SpaceX employees and investors, who are basically subsidizing other companies. The thing is, everyone knows Elon is not a real CEO of any of these companies. There isn’t enough time to even be the CEO of one company and a parent. This guy has 10 companies and 10 children. He’s just holding the position and preventing others from being in that position, so he can enact changes like this. And his boards are all stacked with family members, close friends, and sycophants who won’t oppose his agenda.

Thanks for putting words to that; the paragraph which most stuck out to me as outlandish is (emphasis mine): The basic math is that launching a million tons per year of satellites generating 100 kW of compute power per ton would add 100 gigawatts of AI compute capacity annually, *with no ongoing operational or maintenance needs*. I'm deeply disillusioned to arrive at this conclusion but the Occam's Razor in me feels this whole acquisition is more likely a play to increase the perceptual value of SpaceX before a planned IPO.

No it's just Musk's Big Idea for spacex to hype it before IPO. It's their version of FSD, robots etc. You've got to hand it to him, he is a bullshitter par excellence.

You don't have to believe one's bullshit. You just have to believe others will believe the bullshit.

This is the moving force behind all investments of the past decade or so. Crypto? Everyone involved knows it's empty, but they hype it up anyway because they believe some people buy the bullshit, and plenty of people gobble it up and signal boost it because they think they're ahead of the pack. NFTs, same thing. Tesla stocks was probably the one that started it. Pokemon cards.

The real reason is, Elon has SpaceX and xAI. He can create an illusion of synergy and orders of magnitude advancements to boost the market cap and pocket all the money. He realized long time ago you don't need to deliver to play the market cap game, in fact it's better if you are selling a story far in the future rather than a something you can deliver now.

No one buys into Elon's firms because he's expecting dividends. His investors are not investing because of his success rate in delivering on his promises. His investors are investing exclusively because they believe that stock they buy now will be worth more tomorrow. They all know that's most likely not because Elon delivers anything concrete (because he only does that in what, 20% of cases?), but because Elon rides the hype train harder tomorrow. But they don't care if it's hype or substance, as long as numbers go up. Elon's investors are happy with his success rate only in terms of continuously generating hype. Which, I have to admit, he's been able to keep up longer now than I ever thought possible.

exactly. This smells like a way to boost the SpaceX IPO to meme-stock premiums

What'd be the point of inflating market caps like this when it's obvious they'll crash the moment the owner tries to liquidate any of it before the promises are kept?

Ok then short SpaceX stock when it IPOs.