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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

#141

Post by idiotsecant »

elorant wrote: post #78
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.

I dont think so. These entities and the hardware they own would be bought for legitimate AI use long before they'd hit the open market. AI is very useful, and even profitable at the inference level. It's just an open question whether this monumental amount of spend for research is worth it.

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

#142

Post by disgruntledphd2 »

gruez wrote: post #123
staplers wrote: post #86

Earlier quoted context omitted.

That's done quietly behind the scenes so leaders can blame something else for inflation. See "M2SL" or "TOTBKCR" on tradingview if you want to see inflation live.

>See "M2SL" or "TOTBKCR" on tradingview if you want to see inflation live. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/TOTBKCR And you would have been massively wrong. People have been complaining about quantitative easing since post GFC, and if you took the figures at face value, those would imply inflation was nearly 100% between the end of GFC and before the pandemic. Whatever you th…

I mean, it sortof did in assets, just not in the changes tracked by CPI.

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

#143

Post by crystal_revenge »

mohamedkoubaa wrote: post #119
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?

It's not interesting to say "this is a bubble!" I've heard that about virtually everything (and in many cases it's likely true). What is interesting is pointing out the mechanics that make the bubble pop.

This is precisely what makes the movie the Big Short interesting: we see that people did identify, within a reasonable time frame, when people would start defaulting and how that would cascade into a true crisis.

It's pretty clear that while the fruits of AI are quite useful, the entire thing is rife with very questionable financial engineering... but I still don't know what it is that makes all of this break. For example, it's obvious that the SpaceX IPO is a massive wealth transfer program, but it's not obvious that it will immediately end in a crash. Given how irrational the stock market has been, I don't see a reason it can't continue to be irrational for long after the bag has been handed over to the retail investors and retirement funds.

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

#144

Post by idiotsecant »

brokencode wrote: post #109
xiaoyu2006 wrote: post #102

Earlier quoted context omitted.

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

With most 401k plans, you can choose what you invest in to an extent. You can put it in bonds or other investments if you want.

This doesnt fix the systemic issue. Most people put their money in a target fund and leave it alone. Those target funds are at risk of being forced to buy these over-inflated assets. The incentive to do this is there because those target funds and naive investors exist.

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

#145

Post by timacles »

AznHisoka wrote: post #8
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?

Someone gets bailed out and the cycle starts again. Isnt this how it works?

We are basically dealing with the fallout of the 2008 GFC bailout to this day.

The fiat economic system is irreparably broken, and we are circling the drain. Another bailout is _probably_ inevitable. But the cycle sure as hell isnt resetting and we are speeding towards something... what it is is unclear though, and when is also unclear.

The part people cant wrap around is the scale of it and the time it takes to go through the super cycle. Theoretically, it all started with the Dot com bubble, which indirectly cause the housing bubble, which caused the GFC. Which caused whatever happened in 2019, which caused QE in 2022 under the guise of COVID, which is causing whatever the hell is happening now.

Capitalism has become uncorked, and money is irreversibly flowing to the top at an increasing rate. The logical next stage is that like 75% of the world's population is literally not even part of any economy. And that doesnt really make any sense

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

#146

Post by throw-the-towel »

hdndjsbbs wrote: post #124
xiaoyu2006 wrote: post #102

Earlier quoted context omitted.

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

This is what financial capitalism and "democratizing finance" has meant in practice. Rich people have access to different types of investments, and by the time those trickle down to common investors the juice has all been squeezed out. Whatever the trend is, by the time you hear about it the market has already been arbitraged by faster investors with more resources. We are not going to come up with a market-based sol…

The middle class resists it because we know who will be taxed through the nose to fund this safety net. Hint: it's not the ultra rich.

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

#147

Post by selicos »

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?…

1. It seeks to manipulate the information you see and your lens to the world. This is already partially true from independent and major publications.

As soon as we hand over searching out information to social media algorithms and LLM tools, we abandon our ability to see reality outside our direct vision.

Grok's ownership has already demonstrated capacity to influence major world elections and other events. You cannot trust it with this sort of information gathering and reporting.

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

#148

Post by irishcoffee »

olyjohn wrote: post #96
irishcoffee wrote: post #92

Earlier quoted context omitted.

I believe you've described "investing with a hope for a profitable return" which is usually the point of investing. Circular investing is a thing that is happening with all of these companies related to language models. Google hoping for a ROI isn't a great example of that.

Since when is leasing capacity in a datacenter considered investing?

Why does one lease something? To provide value equal or better to the cost, no?

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

#149

Post by johnsmith1840 »

treis wrote: post #59
SlinkyOnStairs wrote: post #45

Earlier quoted context omitted.

> the big providers are charging full freight for inference. Except they're not. Anthropic's claims of temporary profitability line up exactly with when SpaceX is giving them discounted compute, OpenAI's such a shitfest they threw the CFO off the glass cliff for daring to push back against the IPO. "Profitable on inference" is an unsubstantiated rumour. Just look at the copilot changes. Demand switching to other prov…

The pricing on Open router is clear. Anthropic, OpenAI, and Google all garner a massive premium over deepseek and qwen. There's no other realistic explanation except that they're making bank.

Why do you think Chinese companies can do that? It's government subsidising price they do it with literally every ibdustry.

Home grow a bunch discount them federally, let them wipe the foreign markets.

If AI is threatened by china why would US NOT do the same? If they did they're in a much stronger position to do so than china. Cheaper energy, more cash, stronger industries.

Infrastrucure is thr kind of thing that only a foolish US admin would let fall apart to their advesary.

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

#150

Post by rvz »

mohamedkoubaa wrote: post #119
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?

A bubble waiting to burst.
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