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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

#161

Post by xyst »

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 happens when the music stops?

Government hands Wall Street another bailout to the tune of trillions of dollars. Wall Street executives and hedge funds use funds to enrich themselves as usual. Main Street and tax payer get fisted again. These massive data centers go bust. Get gutted during bankruptcy and foreclosure proceedings Public deals with the fallout with no help from government.

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

#162

Post by mannanj »

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 told me this isn't "fraud". (Was in another one of these hacker news thread where a guy called all this Brilliant Financial Engineering). How is this not unethical at least, it befuddles me.

Maybe we've come to celebrate unethical behavior and its become so normalized that we forget to ask ourselves what should be allowed.

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

#164

Post by mikeryan »

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?

Google also just announced a new equity raise of $80B. I have no idea if doing this via equity vs debt is trying to suck some of the wind out of the IPO Market for Anthropic and OpenAI but it’s going to be interesting to see how the markets deal with all the new equity being floated. Someone isn’t going to hit their raise targets and the later IPOs may be the ones holding the bag.

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

#165

Post by smallmancontrov »

stymaar wrote: post #136
smallmancontrov wrote: post #97

Earlier quoted context omitted.

Any time you see a price denominated in $, divide by that chart.

The idea that inflation and the money supply are linked is one of the most dumb one in folk economics. Just look at these charts: they were declining when inflation was raging on in 2022-23 …

Lagged processes are one of the most fundamental concepts in economics. If merely recognizing the possibility that one could be at play here is throwing you for a loop, you need the simplified monetary model more than most.

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

#166

Post by ryan_j_naughton »

stymaar wrote: post #136
smallmancontrov wrote: post #97

Earlier quoted context omitted.

Any time you see a price denominated in $, divide by that chart.

The idea that inflation and the money supply are linked is one of the most dumb one in folk economics. Just look at these charts: they were declining when inflation was raging on in 2022-23 …

> "The idea that inflation and the money supply are linked is one of the most dumb one in folk economics"

"folk economics" implies it is by untrained people.

Milton Friedman's famous quote of "inflation is always and everywhere a monetary phenomenon" shows that he deeply believed the relationship between inflation and money supply, and one certainly cannot call Friedman a "folk economist" considering he won the Nobel prize in economics and was a professor at the University of Chicago.

Note: I am not saying he is right or supporting his belief. I am merely stating that such a belief is not a "folk economics" belief. This belief is still very prevalent in the freshwater schools of economics. [1]

As a personal anecdote, at Ronald Coase's 100th birthday party, I personally got Gary Becker and Richard Posner debating a very related topic (whether and by what degree the velocity of money of fluctuates and whether helicopter drops of cash would have been better during the early days of the money supply collapse in 2008/2009 than just giving money to the banks). In a room full of Nobel Prize winning economists in 2010, there was a very rigorous debate on the topic.

[1] https://en.wikipedia.org/wiki/Saltwater_and_freshwater_econo...

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

#167

Post by shmel »

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?

or, hear me out, we can try the Irish way? Just let them fail ffs

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

#168

Post by kccqzy »

mikeryan wrote: post #164
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?

Google also just announced a new equity raise of $80B. I have no idea if doing this via equity vs debt is trying to suck some of the wind out of the IPO Market for Anthropic and OpenAI but it’s going to be interesting to see how the markets deal with all the new equity being floated. Someone isn’t going to hit their raise targets and the later IPOs may be the ones holding the bag.

The $80B of equity raise is nothing compared to its previous share buyback programs.

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

#169

Post by mannanj »

timacles wrote: post #145
AznHisoka wrote: post #8

Earlier quoted context omitted.

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 t…

yeah I intuitively have felt something like this has been happening, too. And finding the evidence is such an immense task, and feels way out of my current energy level.

When COVID was ongoing there was a term floating around I liked, "Psychosis" was it. The spell is like that of, denial? Terror & shock?

Trauma might be better?

Looking at trauma responses and how to detect it in humans is an interesting perspective to look at all this with. Personally, if I look at it from "people are afraid, traumatized, defending themselves" and use that to extrapolate how most people (the masses, the non-rich) would act and also the rich - that points me to why theres such a sudden hastening of action and pace of wealth up towards the top in the name of AI & war.

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

#170

Post by gunapologist99 »

throwaway5752 wrote: post #115
bpodgursky wrote: post #112

Earlier quoted context omitted.

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.

Better not mention your theory to all the other Tier 1 data centers. Or maybe you're saying that it's only AI that's short-lived.
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