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Do you hold hopes for finding a revenue stream to outweigh the massive influx of AI debt Musk glued onto SpaceX?
by bandrami 4mo ago
Do you hold hopes for finding a revenue stream to outweigh the massive influx of AI debt Musk glued onto SpaceX?
- ericd 4mo agoIt looks like they're taking on $20B in debt to clean up xAI's debt, and then paying it off with the equity raise? Do you feel that's very significant for them? 1% dilution takes care of it.
- bandrami 4mo agoYou understand xAI hasn't magically stopped producing debt, right? It's still setting money on fire every single quarter
- ericd 4mo agoI think that's capex driving that, not opex, since they got those two (fragile) leases in place? They can stop building out their capacity there, if they want.
- bandrami 4mo agoRight but the word "capex" isn't a magical amulet that makes balance of payments and cash flow problems disappear. Plenty of companies have been wrecked by overextending on capital spending.
- ericd 4mo agoYeah, for sure, but it's also usually something that's a bit easier to trim when needed, unless they got way ahead of themselves and went deep into debt to do it. Most public companies have much worse debt:equity ratios.