Hacker News new | past | comments | ask | show | jobs | submit
lumost | on: SpaceX S-1
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?

burnerRhodov3 | parent | next
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.

roryirvine | root | parent | next
Generating your own electricity really isn't that much far below grid prices - you'd typically be looking at a central estimate of 15 years to get a return on investment for a large Combined Cooling and Power cogeneration setup.

But, crucially, there's a huge level of uncertainty. You're making bets on the relative cost of nat gas and grid power, both of which have historically shown extreme volatility over that sort of timescale.

The level of risk means that very few proposed schemes go ahead in full unless there's some other factor involved (lack of sufficient grid connectivity, availability of subsidies).

kgwgk | root | parent | next
> 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."

loading story #48218062
tonfa | root | parent
> 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).

loading story #48217999
chermi | parent | next
I am very skeptical that musk is 10-20% interest. I would guess closer to 5.
nl | parent | next
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.

bluecalm | parent
That assumes they are renting out the whole capacity. Have you seen anything suggesting that's the case?
tredre3 | root | parent
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-capa...

I don't know about Cursor.

loading story #48218946