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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

#211

Post by emodendroket »

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 seems to be the best at understanding current events. Maybe due to X integration, or some other tool call optimization in the backend? I don't know, but I often ask about things going on, and the other models have outdated info, give unhelpful answers, etc.

That makes sense, but occasionally you ask about an issue where it's clearly received political instruction from the commissar and it acts totally lobotomized. But it's true that Gemini will often blithely state that something could never happen and you'll say "what do you mean, that just happened" and then it comes back apologizing after running a Web search.

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

#212

Post by emodendroket »

NewJazz wrote: post #88
lachlan_gray wrote: post #74

Earlier quoted context omitted.

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

That's because it can't literally reason, it has just been manually steered into those reasoning speech cycles.

Yes, yes. Does everyone still find it interesting to go over this point every time about how it's not literally a person with human reasoning?

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

#213

Post by [deleted] »

eqmvii wrote: post #108
9cb14c1ec0 wrote: post #25

So we know what they are renting these GPUs for. I'm really curious about the input costs of their power generation. Is there actually enough margin in these deals for xAI to cover their depreciation cost? Edit: from the footnotes: > Colossus actually runs largely on its own on-site gas turbines, which comes out even cheaper: at a simple-cycle heat rate of ~10,000 Btu/kWh and Henry Hub gas at ~$3.50/MMBtu, the fuel b…

I think the hard part is acquiring the GPUs, first at all, then at any reasonable price.

[deleted]

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

#214

Post by wongarsu »

trenchgun wrote: post #127
eqmvii wrote: post #108

Earlier quoted context omitted.

I think the hard part is acquiring the GPUs, first at all, then at any reasonable price.

Yes, and then you need to have the datacenter. Do you get a permit? How long does it take to build it?

Getting somebody who actually knows how to design and build a data center also seems to be a bit of an issue right now

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

#215

Post by tootie »

bko wrote: post #128
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?

Or, hear me out, maybe there's a compute shortage and xAI has compute and manages that well. There are no dark GPUs. Compute translates directly to money for these frontier labs. I think everyone is reading way too much into this. Sure there is some circular transactions that are sus, but this ain't it.

Compute is presently in shortage but generally it's a commodity. It also depreciates.

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

#216

Post by b112 »

bko wrote: post #128
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?

Or, hear me out, maybe there's a compute shortage and xAI has compute and manages that well. There are no dark GPUs. Compute translates directly to money for these frontier labs. I think everyone is reading way too much into this. Sure there is some circular transactions that are sus, but this ain't it.

Indeed, that hardware was bought on old RAM, SSD, etc pricing. These are now 5x the price.

To reap massive profits before depreciation is just plain smart. LLM space, model generation is just plain crowded now too. And everyone thinks a crash is coming.

They could also build out their own end-user infra, but letting someone else which already sells direct to the public do so, is sensible.

I know of the desire to show profit for the IPO, but my point is, this is a good move on its own.

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

#217

Post by chatmasta »

mlyle wrote: post #159
chatmasta wrote: post #129

Earlier quoted context omitted.

I’m not sure they need novelty or moat. AI compute resources are so scarce that inference providers will buy whatever is available. SpaceX sells inference hardware in bulk, with a proven track record of running inference and training workloads at scale.

Without a moat, P settles to MC. No one makes significant profit.

xAI covers their cost of N-1 datacenter while running their own models in N and building out N+1.

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

#218

Post by top_sigrid »

celdon25 wrote: post #208

Elon is brilliant when it comes to hardware. But unfortunately with xAI, he went on a firing spree, PayPal Mafia style, just like with Twitter when he bought it, shortly before doing another hiring drive, and failing to hire software engineers at scale. The datacenter deals came after. But now, the man who promised the world an AI system that defends free speech and is “pro-human”, is instead selling to his competito…

> Elon is brilliant when it comes to hardware.

What shall that even mean?

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

#219

Post by Retric »

redox99 wrote: post #134
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?

You seem to imply that with this deal their shares are worth 88B but without it they're worthless. It's very hard to know how much the deal actually increases SpaceX market cap, but unless Google exits their SpaceX position soon it doesn't even make much sense as a circular deal.

Executive compensation is often based around share prices, so this can be worth quite a lot to the people making these decisions without any long term upside for the company.

If you want to understand how companies behave you really need to look at things from the perspective of people making the decisions.

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

#220

Post by JumpCrisscross »

tootie wrote: post #215
bko wrote: post #128

Earlier quoted context omitted.

Or, hear me out, maybe there's a compute shortage and xAI has compute and manages that well. There are no dark GPUs. Compute translates directly to money for these frontier labs. I think everyone is reading way too much into this. Sure there is some circular transactions that are sus, but this ain't it.

Compute is presently in shortage but generally it's a commodity. It also depreciates.

> generally it's a commodity

The NVIDIA GPUs, HBM, land-use permits and power-supply agreements xAI nailed down are absolutely not commodities.

I think xAI is a mess. But let’s call a spade a spade, they speculated on AI compute and they are currently right.

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