Data centers submerged in the ocean or placed in the desert seem much more promising. But I have only an enthusiast's understanding of rockets and physics, so I'm genuinely open-minded to the possibility.
Is there anyone credible who thinks this is a plausible pathway for SpaceX to make huge amounts of profit?
Oh is that all? Those are major data center concerns.
Don't forget the biggest one: an ocean-based system could be pulled up and serviced without the need for a human-rated rocket. Oh, and bandwidth/latency.
The ONLY benefit of space is that it doesn't require siting a major construction in a town full of angry residents, and it has abundant solar power. But given how much it costs to get the solar panels in orbit, that power sure ain't free.
As a side note, I don't understand why I keep seeing these wrong arguments on HN repeatedly. Like everything mentioned in this thread can easily be fact checked. Radiative cooling is solved, launch costs are going down, so power costs will pay themselves back very quickly, etc.
You can argue about specifics, like chips will get more sophisticated + power efficient and fabrication will be the true longterm bottleneck, or SMRs/fusion could reduce energy bottlenecks, but talking about cooling as if convective cooling is the only option is just nonsensical.
This is emphatically not true at any scale in which this scheme makes sense. Be careful with including too many Musk boosters in your information diet.
The biggest issue with space is not repairability but heat - when you’re in a vacuum the only way to disperse heat is through black body radiation and that’s horribly slow compared with normal mechanisms. It means you need giant physical structures whose sole job is to accept heat from the processing core and radiate it away and have so much more material that you can radiate it at the speed you generate. It’s a huge unsolved physics problem which is why everyone is skeptical.
The problem with data centers in space is one of materials science and engineering: how to make radiators large enough and effective enough to cool it while also being economically feasible, both in terms of construction and getting them up there in the first place.
We can make a space data center right now. It would just be terrible and expensive.
The big win of being in space is just a worse alternative to using an intermediary heat transfer medium.
I've done builds that ran for 5+ years with virtually no physical attention, just continual degradation as hardware is taken out of service. There's also not much money to recover from 5+ year-old hardware.
I used to run AI inference GPU servers in road vehicles, which is probably an even harsher environment than a single rocket launch, and the vibration problems are real but solvable.
Also space has more radiation
I think this could be done at an interesting scale even on Falcon 9 alone. If Starship does even 20% of its early design goals, it'll beat Falcon 9 and we could see orbital servers being demised and replaced every 3 years, maybe even 2, for ones with abnormally high failure rates.
Now, whether or not this will all make money in the end has a lot to do with what's going on down here on terra firma and how long it takes to get useful capacity into orbit.
(It's taken 7 years to get Starlink capacity enough for serving 10M customers. Verizon FiOS did 10M in 5 years. AT&T Fiber took 4-5 years to deploy to 10M. So, space isn't a lot slower than terrestrial.)
Definitely not definitive but it's plausible current hardware could survive with minimal modification
my question was more whether the hardware would need extra redundancy or shielding in order to not have unacceptably high error rates
You can figure out the weight of the thing based on the total power output, and "power to weight ratio" from SpaceX's own diagrams. Then look up how much it costs to launch per ton, and even look up what they are projecting it will cost with Starship. Even if they get costs down, it's still astronomical. I just can't figure out who would pay that much money to put a rack into space. There's no way the power savings are worth it. Unless you have some niche where you need your workload in space, I can't see the value at all.
I too agree that SPCX’s space business is real and valuable, but it’s (almost completely) irrelevant here.
All of the losses are from the xAI/Twitter side of the house. And Elon Musk needs a flimsy story so that no one sues him. It doesnt have to be a believable story, it just needs to be enough so that no lawyer cares to bring a case in Texas vs SpaceX and Elon for breach of fiduciary duty.
The story did its job. Elon offloaded the money losing Twitter/xAI out of his personal wealth and onto the public through SpaceX. Done and done. SpaceX is now an AI company (or contains one) and needs to perform as such.
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It's literally the same story as Tesla/Solar City. Make up bullshit about solar panel synergy with EVs and buy out his cousins failing company. Make it TSLA shareholders problem for figuring out how to make a profit from the failing company, it's no longer Kimball Musks concern since the buyout
Scott Manly (who I think is credible) has a video where he goes over the logistics of SpaceX's space based data centers. He seems to think its an idea worth pursuing, but its important to note that his expertise is space tech, and not business strategy.
Inference the latency becomes trivial.
Other things, I suspect latency is too high again.
Sooner or later it's going to leak.
The ISS produces about 120 kilowatts of electricity.
An Nvidia Blackwell B200 GPU uses 1.2 kilowatts of electricity.
So, you would need a similar array of solar panels and radiators just to power 100 of them. You probably would need 2-3 launches for a satellite this big, and realistically, you would just make smaller satellites.
That's $4,000,000 worth of GPUs, A couple millon or more of RAM, SSDs, etc., a radiation-proof satellite housing to support all of that hardware, solar arrays, launch costs ($74M per Falcon launch), all for maintenance to be impossible and the hardware to become obsolete in a couple of years.
It's a delusion unless we invent some way to go to space for free.
The thing has two main parts. One, a bunch of solar panels, shielding and radiators. This the heavy / expensive to launch part, but should last for what, decades? Two, a bunch of GPUs. These become obsolete, but so what? They're not that heavy, so every few years you send up another rocket and swap them out.
SpaceX's launch cost, the internal spend to put one Falcon 9 Starlink payload in orbit, with a return to launch site booster recovery, is about $15M.
If you're going to make such assertions, do the legwork to make sure your numerical claims aren't off by 500%.
Even if we do somehow succeed at affordably dumping tons of GPUs into orbit, what do we do about the Kessler Syndrome?
I'm bullish on SpaceX as a company in terms of technical accomplishment.
Buying SPCX would make sense at about 1/4 of its IPO price. The IPO price and subsequent rise was inflated via hype and artificial supply restriction, i.e. publicly selling just 4% of the total company ownership.
Affordable is a bit questionable. It's heavily subsidized by Starlink and government.
Not completely clear what happens to price if SpaceX doesn't keep launch demand propped up with their own business.
Maybe!
>but in an affordable
Maaybe!
>and sustainable
Maaaaaaybe. Gotta start gigantic scale methane production from solar or whatever first.
We sometimes get in the habit of thinking Elon, who is a Nazi, accomplishes everything he sets out to do, since he was so incredibly effective at getting EVs going and getting the Falcon 9 going. But he has plenty of misses too, like ruining the foundations of democracy, being over 12 years late and counting with self driving cars, hyperloop, the cybertruck, etc.
Not much point to read any further.
I wonder if that's what's happening with ~$1T of stocks currently locked up...
I spent a week researching this talking to fidelity, schwab, IBKR, and Robinhood, none would allow it.
Which more or less answered the question for me, even if he was being a bit hyperbolic.
Once the lockup expire they'll be able to trade (sometimes there's trading window but some tech company don't have any for lower level employees), and they'll still be insiders.
When you own stock at a broker in a margin account, you may sign an agreement to allow the broker to lend out your stock to someone else. For lending your stock, you are entitled to a stock-borrow fee which usually is quite small say 0.25%, and paid by the borrower (short-seller). The borrower then sells the stock to someone else. At a later point, the short seller closes their position by buying it back, and returning it to you. This is roughly the mechanics of it. So, to answer your question, the short seller makes money from folks who buy high and sell low. In this specific example, the stock-borrow fee say was 5% because, the float is still low, and if the short seller borrowed at $165 after the IPO and sold it, and then bought it back at $135 and closed their position, they made money from folks who bought at $165 and sold at $135.
It's also possible Bob's thesis on SpaceX could have been wrong and the shares could skyrocket. There's usually a provision in the contract for Alice to recall the shares she lent to Bob. In this case, Bob would be forced to buy SpaceX stock at the current market value and likely lose money on the overall trade.
To answer your specific question, "Who do you make money from?" It's actually not clear. Bob selling-high and buying-low doesn't necessarily mean whom Bob sells-to and whom he buys-from are on losing sides of the trade despite Bob making a profit. E.g. the buyer of Bob's short-sell could write calls and the stock could close pass the strike on expiration and turn a small profit as well.
The money being made from SpaceX is money that Musk, or whoever, engineered to be lost from every pension fund that invests in Nasdaq-100; and the Nasdaq appear to have been entirely complicit, changing the rules to make it happen.
I mean Trump stole in the traditional way, using insider dealing, and going to war to manipulate markets. I guess Musk had to one-up him by getting an index itself to forcibly extract money from investors to give to him.
Not sure what his play is at this point, he can't be shorting his own stock, can he?
There are two big issues with shorting a stock. One, your downside is infinite, whereas your upside is only the size of your position. If you short a medical stock worth ten cents and it zooms up to $1000 because the company discovers a cure for cancer, that's going to cost you $999.90 for every share you shorted at ten cents. If the company goes bankrupt instead, you make... ten cents for every share. If you get unlucky a single short position will wipe out all the money you made or will make shorting stocks for the next three generations.
The second problem is you don't completely control your position. If you buy a stock to hold, it's yours until you decide to sell. But when you short a stock and enough the people at your brokerage holding shares in a company you shorted decide to sell, your broker will summarily close your position at the current market price because there aren't enough remaining shares for you to keep borrowing. That can be very frustrating if the stock is at a temporary peak, especially if it proceeds to go down to a price for which you would have closed at a profit.
EDIT: I suppose I should add a third problem to the list. If the cost of your short goes beyond a certain percentage of your account your broker will close your position to protect himself and his other customers. That usually happens if the stock is going up quickly. When your broker closes your position, he, along with all the other brokers closing short positions, needs to buy stock, which creates a positive feedback loop. That's called a "short squeeze". You can end up with prices shooting up to ridiculous levels because people have no choice but to buy.
You don't actually take the money right away but a broker holds it for you.
Say Acme is worth 100$ today and you think it'll go down to 80$ in a week. You give the broker a small betting fee. So you give him 101$, he makes the purchase and holds the "position" for you.
During that week the price could do 2 things.
The Good Scenario: Price goes down to 80$. Broker buys the stock at 80$ and pockets a nice shiny 1$. You pocket 20$.
The Bad Scenario: Price goes up to 120$. Broker buys the stock at 120$ and pockets a nice shiny 1$. You owe broker 21$.
I say 1$ but it's actually more complicated than that. Some brokers allow you to do short positions only if you have other stock with them as collateral which they would sell to pay for whatever loss you might have. Shorting is a risky business because shares could go up to infinity and you could lose everything with these positions.
When people say they're "long on this stock" means they think it'll go up in price. "short on this stock" means they think it'll godown in price. It's lingo they love to use.
So the people you make it from are from people betting the opposite as you. Another person could make the opposite bet as you and end up losing their money that you pocket.
Short selling - sell high, buy low, pocket the difference.
The money is coming from the same place in both cases - other people in the market.
If market opens at significantly different price, you may be forced to liquidate and loose more than expected.
Also worth mentioning you might be on the hook to buy it back at any time; after all, the person you borrowed it from may themselves wish to sell it. If widespread, this is the basis of "short squeezes" (e.g. of GameStop fame/infamy), if a lot of short sellers are trying to buy it back at the same time
as in, you give back _a_ share not the same share.
So you buy a bunch of shares at x price, you agree to hand them back in n days time.
You make money by selling the shares immediately and then you buy shares later at a lower price, then when you hand back the shares, the profit is the difference between ho much you sold them for, and how much you bought them back again.
The risk is, you _have_ to give the shares back usually at a fixed point in time. So if the price rises, you have to pay the difference. (there is normally a fee as well, to borrow the shares.)
Shorters are selling to willing buyers at the current fair market price. So that they may survive.
2) sell it
3) rebuy it at the lower price (assuming you're right)
4) give it back to whomever you borrowed it from plus a consideration for letting you hold what's theirs for a bit
Whatever's left after you return the stock and pay the interest is your profit, which comes from the people who bought it from you in step 2. If you're wrong, and the price goes up, you have to replace the stock you borrowed at a higher price than you got for it and that's your loss (which could potentially be infinite, as opposed to long positions where you can only lose what you initially invested)
The funniest and simplest answer is that you make money off yourself.
Sometime later, the stock has fallen and you decide to close the position. You buy back the shares with the borrowed money probably from a market maker and close your position. You give the shares you borrowed back to the lender. Your net profit is sell_price - buy_price - borrow_fees, anything left is your profit.
Stocks are not zero sum like options or futures, they also have no expiration date (unlike derivatives), it’s possible a short seller sold shares to someone who later profited, and then it’s also possible to buy the shares from someone who profited, even if you made a profit on shorting the stock.
So the answer is “other market participants” who also may have profited on their buy or sell.
I do think they have deeper pockets because they are more informed/sophisticated players, so the whole argument is kind of circular.
Completely wrong, my claim is that people who have deeper pockets they do so for a reason.
all you owe is the number of shares you sold, the original owner doesnt care what happened as long as they get identical ones back eventually. In the meantime, you pay interest on the initial value of what you borrowed and sold
You just sit on the cash
later when the shares are cheaper, you buy shares on the open market and give them back to the person you borrowed from
whatever cash is leftover from rebuying is your profit
https://news.ycombinator.com/item?id=48933344 - "SpaceX stock erases all its gains and slides below IPO price in intraday trading" - latimes.com | 306 points | 1 day ago | 281 comments
https://news.ycombinator.com/item?id=48920181 - "SpaceX bond worth 10% less than issue price – heading for junk bond status" - ft.com | 561 points | 2 days ago | 603 comments
how can that be healthy for civilization
It's actually more like 1 trillion of value was "lost" when the stock dropped, and $9 billion was gained by some (and equivalently lost from others) for being right about the stock dropping.
Stock dropping is not literally a loss of any underlying good. It is a "assessment of how valuable something is". So when we say "omg we lost $1t in value" is not quite right. It's "we (everyone betting in the stock market) now collectively understand the value of this thing (company in this case) to be $1t less than assumed previously"
In this case, massive swings in value mean that the assessed value of a thing is very uncertain. I'd say this is extremely true for spacex, where in theory many people think it could be worth a fortune, or nothing, and no one can ever know the "true" value.
This is because there is not such thing as "absolute value" in the real world. And when it comes to things like stocks, "value" is just "hypothesized current value", which is a whole bunch of things combined: long term value of company, plus short term expected movement, even things like "who wants to own more of this this in the next few milliseconds", make up what a thing is estimated to be worth right now.
Assuming the stock market is some oracle of absolute value will make the world look insane. Seeing it as estimated value at one point in time in a very uncertain world where nothing has "true" value and all value is just relations between people and the things they want and the things they own and can exchange, is much closer to reality.