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xAI is looking more like a datacentre REIT than a frontier lab

martinalderson.com

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Re: xAI is looking more like a datacentre REIT than a frontier lab

#71

Post by SecretDreams »

joxdosba wrote: post #66
SecretDreams wrote: post #38

Earlier quoted context omitted.

Look, there's two things: * LLMs are useful * Company valuations around LLMs are not realistic Both can be true, much like they were during the Dotcom bubble. The internet turned out to be a pretty real thing. A couple examples below might feel familiar in the next couple months/years. > Blucora (then InfoSpace): Founded by Naveen Jain, at its peak its market cap was $31 billion and was the largest Internet business…

Btw how much is MicroStrategy down since the year 2000?

I was expecting this comment. You know the answer. A scam will keep scamming.

There are also legitimate companies from the dotcom bubble era like amazon, microsoft, and intel. They all were vastly overpriced during the dotcom era. Probably also now lol.

Re: xAI is looking more like a datacentre REIT than a frontier lab

#72

Post by zoogeny »

If xAI is a datacenter REIT, it is a special kind that has a promise that no other datacenter provider could dream of: LEO datacenters. As far-fetched as that may sound, the biggest profit center for SpaceX in my understanding was Starlink. xAI already has extremely high-bandwidth connections from Earth to LEO available. Connecting that to solar powered orbital datacenters seems doable in realistic timeframes, especially once Starship comes online and gives them a significant boost in launch capacity.

If that ends up being viable and profitable, there is no realistic competition for decades. In this view, xAI earning a reputation as a reliable AI hyperscaler is just another tactic in that strategy.

Re: xAI is looking more like a datacentre REIT than a frontier lab

#73

Post by nonethewiser »

leetharris wrote: post #15
hawkice wrote: post #2

They have developed an LLM, so they are an AI lab, but the quality of that model suggests they're not a frontier anything.

I have the pro account for ChatGPT, Claude, Gemini, and Grok. They all have various strengths and weaknesses. My favorite is still ChatGPT, then Gemini/Claude, then Grok. Grok often feels 1-2 generations behind the competition in general use, but it has three things that I love: 1. It seems to be the best at understanding current events. Maybe due to X integration, or some other tool call optimization in the backend?…

What are you using it for? Im pretty surprised ChatGPT is your top model but maybe you arent using it for code.

Re: xAI is looking more like a datacentre REIT than a frontier lab

#74

Post by lachlan_gray »

square_usual wrote: post #55
leetharris wrote: post #15

Earlier quoted context omitted.

I have the pro account for ChatGPT, Claude, Gemini, and Grok. They all have various strengths and weaknesses. My favorite is still ChatGPT, then Gemini/Claude, then Grok. Grok often feels 1-2 generations behind the competition in general use, but it has three things that I love: 1. It seems to be the best at understanding current events. Maybe due to X integration, or some other tool call optimization in the backend?…

Opus 4.8 has made huge jumps in being less sycophantic. I see it pushing back on ideas a lot, and that's very helpful when you're evaluating options.

Almost too much so, it often feels like opus is pushing back for the sake of pushing back. The way old models used to add disclaimers to every message regardless of content

Re: xAI is looking more like a datacentre REIT than a frontier lab

#75

Post by SecretDreams »

dluxem wrote: post #62
SecretDreams wrote: post #38

Earlier quoted context omitted.

Look, there's two things: * LLMs are useful * Company valuations around LLMs are not realistic Both can be true, much like they were during the Dotcom bubble. The internet turned out to be a pretty real thing. A couple examples below might feel familiar in the next couple months/years. > Blucora (then InfoSpace): Founded by Naveen Jain, at its peak its market cap was $31 billion and was the largest Internet business…

I am of the same mindset as you, but you also have to look at PE multiples of Cisco in 1999 and Nvidia today. One being the "ammunition" supplier in the battle for the Internet, and the other supplier in the battle for AI. Cisco was over 400 at one point and Nvidia is around 30. Not quite the same. Other players today: - Digital Realty 48x - Equinix 75x - CoreWeave (still losing money) There is likely a bubble of som…

The circular financing aspects in the current era are really obscuring some of the financials. There are also very legitimate companies offering very real products. The big issue today is that things feel a lot more obscured and interconnected, which makes it hard to discern shit from gold. Does not help when the gold and shit are swimming in the same circles and shaking hands with all the same people.

Re: xAI is looking more like a datacentre REIT than a frontier lab

#76

Post by nemomarx »

nonethewiser wrote: post #70
TSiege wrote: post #6

> And Google is a major shareholder in SpaceX, so they certainly have incentive to juice the valuation of the IPO. Google own 5-6% of the shares of SpaceX. SpaceX is seeking a valuation of $1.77T which means Google's shares would be worth $88.5B-$106.2B. I'm not a skeptic of AI/LLMs but this makes me deeply suspicious of these circular deals. What happens when the music stops?

What's circular?

Google rents from SpaceX enough to show profitability, so that SpaceX can IPO and make googles early shares worth more than enough to pay for the renting they're doing.

Great deal for Google but they end up basically just paying spacex to pay them back, right?

Re: xAI is looking more like a datacentre REIT than a frontier lab

#77

Post by [deleted] »

reducesuffering wrote: post #36
bpodgursky wrote: post #9

Earlier quoted context omitted.

A lot of people are emotionally unprepared for a world where the music doesn't stop.

The level of denialism when faced to confront hard realities of the world around us never ceases to surprise me. Alas AI capabilities continue to rip through expectations and the next goalposts are moved.

[deleted]

Re: xAI is looking more like a datacentre REIT than a frontier lab

#78

Post by elorant »

TSiege wrote: post #6

> And Google is a major shareholder in SpaceX, so they certainly have incentive to juice the valuation of the IPO. Google own 5-6% of the shares of SpaceX. SpaceX is seeking a valuation of $1.77T which means Google's shares would be worth $88.5B-$106.2B. I'm not a skeptic of AI/LLMs but this makes me deeply suspicious of these circular deals. What happens when the music stops?

When the music stops we could start buying hardware again at rational prices.

Re: xAI is looking more like a datacentre REIT than a frontier lab

#79

Post by nonethewiser »

Weren't we just talking about how SpaceX is valued based on some profits from starlink + tons of speculation?

Yet when we learn of this new $26B in yearly revenue (2.2B/month from Google and Anthropic)the conversation does not return to that discussion. It transforms into:

"xAI's tech sucks"

"Google/SpaceX is Structurally Bad for the Economy"

etc

This is called motivated reasoning. We get new information and instead of the obvious thing, updating prior conclusions, we just find a different way to react negatively. The negative reaction will be achieved. The narrative here is completely polluted by people who dislike Elon/SpaceX.

Re: xAI is looking more like a datacentre REIT than a frontier lab

#80

Post by skybrian »

HoldOnAMinute wrote: post #24

Technology has a very short life. The difference is that a REIT might contain an office buildings that can be used for any business, but a data center is filled with carcasses that start rotting and stinking from the day of installation.

No, that's silly. Chips don't rot like produce. Some components will go bad and will need to be replaced. The owner can choose how fast to replace them depending on how prices look in a few years. The rest of the building (including things like power) will still be useful.
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