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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

#111

Post by htx80nerd »

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?…

My favorite was ChatGPT, and I still use it often, but it becomes way too 'hair splitting' argumentative too often over very minor non controversial topics. Like it's always going out of its way to "well actually..."

Grok used to be really really bad ~8 months ago or so, but it's gotten better.

ChatGPT team needs to turn down the 'disagree just because' factor by a lot.

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

#112

Post by bpodgursky »

chris_money202 wrote: post #87
nonethewiser wrote: post #79

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…

Think two things can be true at once. They should be using their capital to achieve their speculative price. Instead, they are using their capital to achieve a modest ROI, thus invalidating the speculation AND proving they have tech issues in what the speculation is around.

They are making $24B/yr on datacenters they built in < 2 years for $2-3B. To call that a "modest ROI" is... quite a statement.

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

#113

Post by atleastoptimal »

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?

The music would have a risk of "stopping" if these deals were backed by a speculative entity. However AI actually has real value/revenue, and is not a speculative product (i.e. people aren't buying tokens to resell them, a token is "consumed" at moment of inference)

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

#114

Post by Terr_ »

atleastoptimal wrote: post #113
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?

The music would have a risk of "stopping" if these deals were backed by a speculative entity. However AI actually has real value/revenue, and is not a speculative product (i.e. people aren't buying tokens to resell them, a token is "consumed" at moment of inference)

That's like saying "nobody is speculating in Enron stock" simply because there was electrical power that was sold for real revenue and consumed.

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

#115

Post by throwaway5752 »

bpodgursky wrote: post #112
chris_money202 wrote: post #87

Earlier quoted context omitted.

Think two things can be true at once. They should be using their capital to achieve their speculative price. Instead, they are using their capital to achieve a modest ROI, thus invalidating the speculation AND proving they have tech issues in what the speculation is around.

They are making $24B/yr on datacenters they built in < 2 years for $2-3B. To call that a "modest ROI" is... quite a statement.

There is a shortage, they are short lived assets. It's a blip and unrelated to their long term profitability and valuation. They can't make a long lived business of building and renting out compute at those margins.

It was definitely a smart business move. It should be troubling to any shareholder than xAI is unable to utilize this infrastructure as renting it out to competitors.

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

#116

Post by bluGill »

xiaoyu2006 wrote: post #102
Qhemlomo wrote: post #10

Earlier quoted context omitted.

At least Alphabet, Microsoft and Amazon can afford it. Nvidia is not losing anything if their stock falls. So whats left? The typical candidates of course: We poor people. 401k, ETF, etc. we pay the bill.

I always think 401k is not fair at all. It kinda forces one to invest and pump the stock prices.

Until someone can come up with a better option though...

Note that a pension plan that invests for you blindly is no better - either the returns are so bad that they are a scam, or they are investing in stocks anyway and so you get the same results but less control. Similar for things like social security, they are either worse options or you need to pump stocks.

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

#117

Post by aurareturn »

xnx wrote: post #42

Same idea expressed by a commenter here 2 days ago: https://news.ycombinator.com/item?id=48426082

I'll add that I said xAI seems to be dropping out of the AGI race: https://news.ycombinator.com/item?id=48214042

Makes sense. Very difficult to catch OpenAI and Anthropic now since their flywheel of generate revenue, use revenue to buy more compute, train a smarter model with more compute, made it hard to compete.

Being able to supply compute makes more sense for SpaceXAI if you can't compete in SOTA LLMs anymore.

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

#118

Post by jdale27 »

xiaoyu2006 wrote: post #102
Qhemlomo wrote: post #10

Earlier quoted context omitted.

At least Alphabet, Microsoft and Amazon can afford it. Nvidia is not losing anything if their stock falls. So whats left? The typical candidates of course: We poor people. 401k, ETF, etc. we pay the bill.

I always think 401k is not fair at all. It kinda forces one to invest and pump the stock prices.

You don’t have to invest your 401k in stocks.

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

#119

Post by mohamedkoubaa »

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?

I have a riddle for you:

If it looks like a bubble and waddles like a bubble and quacks like a bubble what is it?

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

#120

Post by ryandrake »

NetOpWibby wrote: post #94
elorant wrote: post #78

Earlier quoted context omitted.

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

This is what I’m looking forward to

I can't wait until these datacenters go bust and bulk DDR5 RAM and GPUs are sold on pallets by the kilogram rather than by the gigabyte.
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