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As far as I can Google the colossus data centers did cost about 7-10 and 18 B respectively. Renting them out in part at 1.25 B pr month sounds like a very good

by chvid 5mo ago

As far as I can Google the colossus data centers did cost about 7-10 and 18 B respectively. Renting them out in part at 1.25 B pr month sounds like a very good deal for spacex.

BoredPositron 5mo ago
It's really not.
- gekoxyz 5mo ago
  can you elaborate?
  - lumost 5mo ago
    Napkin math on 5 year depreciation is 5.5 billion per year for 28 billion. However the 28 billion is cash upfront, spacex is probably paying 10-20% interest on the 28 billion for another 2-6 billion per year. So net you are looking at finance expenses of 7-11 billion per year. The electricity costs will be significant on top of that, but harder to get a solid read on. Net of everything, spacex may be getting a 14-28 percent yield before paying for electricity. After electricity/insurance/data/taxes/other expenses - I’d guess it’s anywhere between 0% and 7% yield. Odds are good that Anthropic abandons the deal before the depreciation schedule completes. Who is going to rent the GPUs then?
    - bluecalm 5mo ago
      That assumes they are renting out the whole capacity. Have you seen anything suggesting that's the case?
      - tredre3 5mo ago
        Anthropic is renting the whole capacity (of one of the colossus), it was a big part of the announcement. https://finance.yahoo.com/news/anthropic-to-rent-all-ai-capacity-at-spacexs-colossus-data-center-180327774.html?guccounter=1 https://finance.yahoo.com/news/anthropic-to-rent-all-ai-capa... I don't know about Cursor.
        bluecalm 5mo ago
        Yeah one of them but the costs in the calculation are for two of them.
    - burnerRhodov3 5mo ago
      5.5 year depreciation is only on the chips. Power, networking, cabling, the actual construction of the building is probably closer to 60% of that number. Also, they are only renting out colosus 1 ($10B), not colosus II ($18B). So, it's 10B, with $4b of that being attributed to a 5 year depreciation. The rest of the facility probably has a depreciation of around 20 years, and you can easily swap out GPU's, TPU's, Trititum, Tesla's own GPU's, as they start failing, so the normal depreciation curve only "kinda applies here". There is no interest, as he was venture funded not debt funded. Electricity is coming from Nat Gas Turbines, so again even though you have a some depreciation on the equipment there, you are getting it for far below meter prices. So, from my math, he gets ROI on the chips in 3 months, and ROI on the entire facility in 9 months? That's literally the best investment of all time.
      - tonfa 5mo ago
        > Also, they are only renting out colosus 1 ($10B), not colosus II ($18B). The news from the S1 is that they're renting both (see OP).
        burnerRhodov3 5mo ago
        yes, it says they will be paying for "additional capacity" at a reduced rate as it becomes availble in May and June. Essentially, they are using most of C2 for Grok5. That training run is coming to an End, and they will be leasing more capacity. So taht 1.25b per month will go up to around $1.5B-$2B per month as they finish grok 5. Edit: from cofounder of Anthropic: "will be scaling up on GB200 capacity in Colossus 2 throughout June." https://x.com/nottombrown/status/2057194829986300375 https://x.com/nottombrown/status/2057194829986300375 So the 1.25B is for c1, and the revenue will scale into c2. No idea how much scale, but c2 is almost double the compute? So potentially $3b a month, but probably closer to $2.5B since they get a discount.
      - kgwgk 5mo ago
        > There is no interest, as he was venture funded not debt funded. Who is "he"? SpaceX has $20bn of debt and $9bn in "other financing" corresponding to "obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions."
    - nl 5mo ago
      That depreciation it too high in practice. 5 year old H100s are now completed depreciated but are being rented out at higher rates than when they were new. > Who is going to rent the GPUs then? I'd LOVE a way to be on the other side of that bet. If only there was another way outside of buying into all the other Elon risks associated with SpaceX.
    - chermi 5mo ago
      I am very skeptical that musk is 10-20% interest. I would guess closer to 5.
epolanski 5mo ago
We all know very little of that is gonna materialize long term. Reality is that this is all to show some more (theorical) revenue and will be scrapped 6 months from now.
Zigurd 5mo ago
Opex and debt service will eat that cash flow.

by chvid 5mo ago

As far as I can Google the colossus data centers did cost about 7-10 and 18 B respectively. Renting them out in part at 1.25 B pr month sounds like a very good deal for spacex.

BoredPositron 5mo ago

It's really not.

gekoxyz 5mo ago
can you elaborate?
- lumost 5mo ago
  Napkin math on 5 year depreciation is 5.5 billion per year for 28 billion. However the 28 billion is cash upfront, spacex is probably paying 10-20% interest on the 28 billion for another 2-6 billion per year. So net you are looking at finance expenses of 7-11 billion per year. The electricity costs will be significant on top of that, but harder to get a solid read on. Net of everything, spacex may be getting a 14-28 percent yield before paying for electricity. After electricity/insurance/data/taxes/other expenses - I’d guess it’s anywhere between 0% and 7% yield. Odds are good that Anthropic abandons the deal before the depreciation schedule completes. Who is going to rent the GPUs then?
  - bluecalm 5mo ago
    That assumes they are renting out the whole capacity. Have you seen anything suggesting that's the case?
    - tredre3 5mo ago
      Anthropic is renting the whole capacity (of one of the colossus), it was a big part of the announcement. https://finance.yahoo.com/news/anthropic-to-rent-all-ai-capacity-at-spacexs-colossus-data-center-180327774.html?guccounter=1 https://finance.yahoo.com/news/anthropic-to-rent-all-ai-capa... I don't know about Cursor.
      - bluecalm 5mo ago
        Yeah one of them but the costs in the calculation are for two of them.
  - burnerRhodov3 5mo ago
    5.5 year depreciation is only on the chips. Power, networking, cabling, the actual construction of the building is probably closer to 60% of that number. Also, they are only renting out colosus 1 ($10B), not colosus II ($18B). So, it's 10B, with $4b of that being attributed to a 5 year depreciation. The rest of the facility probably has a depreciation of around 20 years, and you can easily swap out GPU's, TPU's, Trititum, Tesla's own GPU's, as they start failing, so the normal depreciation curve only "kinda applies here". There is no interest, as he was venture funded not debt funded. Electricity is coming from Nat Gas Turbines, so again even though you have a some depreciation on the equipment there, you are getting it for far below meter prices. So, from my math, he gets ROI on the chips in 3 months, and ROI on the entire facility in 9 months? That's literally the best investment of all time.
    - tonfa 5mo ago
      > Also, they are only renting out colosus 1 ($10B), not colosus II ($18B). The news from the S1 is that they're renting both (see OP).
      - burnerRhodov3 5mo ago
        yes, it says they will be paying for "additional capacity" at a reduced rate as it becomes availble in May and June. Essentially, they are using most of C2 for Grok5. That training run is coming to an End, and they will be leasing more capacity. So taht 1.25b per month will go up to around $1.5B-$2B per month as they finish grok 5. Edit: from cofounder of Anthropic: "will be scaling up on GB200 capacity in Colossus 2 throughout June." https://x.com/nottombrown/status/2057194829986300375 https://x.com/nottombrown/status/2057194829986300375 So the 1.25B is for c1, and the revenue will scale into c2. No idea how much scale, but c2 is almost double the compute? So potentially $3b a month, but probably closer to $2.5B since they get a discount.
    - kgwgk 5mo ago
      > There is no interest, as he was venture funded not debt funded. Who is "he"? SpaceX has $20bn of debt and $9bn in "other financing" corresponding to "obligations related to certain AI infrastructure assets recorded as failed sale-leaseback transactions."
  - nl 5mo ago
    That depreciation it too high in practice. 5 year old H100s are now completed depreciated but are being rented out at higher rates than when they were new. > Who is going to rent the GPUs then? I'd LOVE a way to be on the other side of that bet. If only there was another way outside of buying into all the other Elon risks associated with SpaceX.
  - chermi 5mo ago
    I am very skeptical that musk is 10-20% interest. I would guess closer to 5.

epolanski 5mo ago

We all know very little of that is gonna materialize long term. Reality is that this is all to show some more (theorical) revenue and will be scrapped 6 months from now.

Zigurd 5mo ago

Opex and debt service will eat that cash flow.