Earlier quoted context omitted.
> Until someone can come up with a better option though... A welfare state maybe?
Eh? Like in North Korea?
More like most European countries.
xAI is looking more like a datacentre REIT than a frontier lab
231–240 of 580 posts
Re: xAI is looking more like a datacentre REIT than a frontier lab
#232Earlier quoted context omitted.
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.
> and power-supply agreements
Don't you mean gas turbine purchases and questionably legal operation? But yeah I feel exactly the same way. The AI part of xAI looks like a mess but it seems that they still managed to score a massive win.
Re: xAI is looking more like a datacentre REIT than a frontier lab
#233Earlier quoted context omitted.
This take clearly has a bone to pick. But ignoring that, the first sentence is just not reflective of the reality here—xAI is making a killing on renting out its GPUs, way more than "just power". The dynamics that normally make infrastructure providers have slim margins don't apply when demand far outstrips supply; the situation right now is closer to monopoly pricing power. It will likely take a few years for supply…
> xAI is making a killing on renting out its GPUs, way more than "just power" What's your evidence for this? Because from the S-1, SpaceX is largely an internet service provider that happens to launch rockets and own xAI.
In the article, it states that the two deals will cover the entire cost of SpaceX's AI buildout in 18 months. OpenAI and Anthropic would kill for that kind of cashflow.
Re: xAI is looking more like a datacentre REIT than a frontier lab
#234Earlier quoted context omitted.
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.
I don't see Alphabet share price changing much just because of SpaceX being valued 2T instead of lets say 1T (being extremely generous). In fact this deal will hurt their profits, which is more likely to hurt Alphabet stock price than the valuation of an asset that they hold.
Re: xAI is looking more like a datacentre REIT than a frontier lab
#235They have developed an LLM, so they are an AI lab, but the quality of that model suggests they're not a frontier anything.
> the quality of that model I guess the benchmarks disagree, but whenever I need to find specific information that does not easily show up with a web search, I try chatgpt, gemini and grok. Grok surfaces what I was looking for more often than the others. Things like "find the github repo from 2017 that does $vague_thing".
I find that too. I use Claude for coding but when I need to dig out something based on limited data I turn to Grok and it delivers.
Re: xAI is looking more like a datacentre REIT than a frontier lab
#236Earlier quoted context omitted.
> the quality of that model I guess the benchmarks disagree, but whenever I need to find specific information that does not easily show up with a web search, I try chatgpt, gemini and grok. Grok surfaces what I was looking for more often than the others. Things like "find the github repo from 2017 that does $vague_thing".
Grok does seem to have the best searching capabilities, and not just for twitter. I wonder what search engine they’re using on the backend.
Good question. You can actually see the searches it runs (momentarily) so testing could determine if it's using public search engines or a private system.
Re: xAI is looking more like a datacentre REIT than a frontier lab
#237Space X is a bet on AI, which is not 'data centre leasing' - it's a short term profitability bump and foregoing the entire AI dream.
Not a good look.
But the short term numbers may oddly provide the emotive juice necessary to fuel the gig "hey, look at their massive revenues!"
Re: xAI is looking more like a datacentre REIT than a frontier lab
#238Re: xAI is looking more like a datacentre REIT than a frontier lab
#239Earlier quoted context omitted.
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.
Respectfully, I tend to think of tier 1 data centers as someone I'm paying for colocation services and the value they provide is power infrastructure and redundancy, network infrastructure and redundancy, cooling, and physical security.
The shortage I referred to is in GPUs, that's what really being rented here.
Even if GPUs lasted forever, they're are a depreciating asset because they become obsolete with improvements over generations.
GPUs do not last forever, either. I've read here, and heard from others, that they aren't even living up to their 5 year depreciation schedules under production load, closer to 2-3 years.
I use AI all the time. I hope AI isn't short lived. It might be if they can't figure this shit out, or if IPOs like spacex poison public opinion against them first.
Re: xAI is looking more like a datacentre REIT than a frontier lab
#240Earlier quoted context omitted.
> 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.
> and power-supply agreements Don't you mean gas turbine purchases and questionably legal operation? But yeah I feel exactly the same way. The AI part of xAI looks like a mess but it seems that they still managed to score a massive win.
> Don't you mean gas turbine purchases and questionably legal operation?
The point is it’s running. They built fast before the backlash got organized. Now everyone has to deal with delays and thoughtful permitting processes.