xAI is looking more like a datacentre REIT than a frontier lab • Hacker News Board

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

#241

Post by fc417fc802 » Mon, Jun 08, 2026, 9:56 PM UTC

atleastoptimal wrote: post #158

Terr_ wrote: post #131

Earlier quoted context omitted.

Please address the primary point first: Selling some product does not disprove speculation. In the case of Enron, people were obviously speculating in its stock, and that remains true regardless of why it collapsed later, or even whether it collapsed at all. I say "first" because if you still can't agree that speculation in AI stocks even exists , then it's pointless to discuss what people might be doing to exploit o…

Speculation exists for every security. However wrt revenue numbers, Anthropic/OpenAI’s revenues are largely made of companies/individuals purchasing tokens. Enron’s was accounting which stated future potential revenue as current earnings. They are not the same. Enron pulled off a lot of shady schemes to hide their accounting practices. All of the “circular deals” AI labs are doing are publicly known and clear to see,…

It's an interesting point that the token revenue will presumably survive a crash in stock prices. But (IIUC) much of the new infrastructure is funded using stock is it not? So it seems like token revenue theoretically surviving doesn't address the risk to the rest of the economy here. And if the economy takes a large enough hit then presumably so will token spend because someone has to pay for that after all.

Sure their actual immediate revenue is driven by concrete numbers but when the rest of the economy is reorganizing itself based on their projected future revenue is the former observation still relevant?

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

#242

Post by bluegatty » Mon, Jun 08, 2026, 9:56 PM UTC

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?

It's very healthy to be skeptical but there's nothing weird specifically about this.

It gets weird when people stop looking at the books and ignore the circularity.

It also increase risk by reducing resiliency.

It's also 'cleaner' then the Nvidia style deals with OAI who are customers.

'Google Finance' is investing in a company.

Just so happens that company leases something to Google. Not so bad.

Nvidia invests in OAI so that money comes right back as sales <- much more conspicuous, looks like 'vendor financing'.

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

#243

Post by jhallenworld » Mon, Jun 08, 2026, 9:57 PM UTC

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.

>There are no dark GPUs

This might not be true. Someone was comparing Nvidia's production rate with known data center capacity, and they do not match. Their conclusion was that people (possibly even Nvidia) were hoarding GPUs- in the very short term this might be a good strategy, but GPUs go EOL fast. There are other stories about paused datacenter builds that match with this.

TSMC is definitely fully allocated, based on current 40 wk lead times for FPGAs..

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

#244

Post by JumpCrisscross » Mon, Jun 08, 2026, 9:58 PM UTC

oblio wrote: post #229

JumpCrisscross wrote: post #209

Earlier quoted context omitted.

The comment you’re responding to and the comment above it are about circular financing. It’s reasonably to assume that’s the same chicanery you’re talking about; expecting everyone to watch a random video to understand your comment is unreasonable.

I listed a bunch of data points that make no sense (profits spiking 50% in a non-Christmas quarter for companies) and weren't directly tied[1] to the circular financing. [1] They're indirectly tied to it.

> that make no sense (profits spiking 50%

They were unrealized gains on non-marketable equities. It’s clearly disclosed and done according to GAAP. It’s put under other income precisely so analysts can strip it out when modelling long-term trends.

Like, yes, if SpaceX goes to zero Google would have to realize losses and probably lose a quarter or two of GAAP profits. (But not cash flows. Cash-flow wise, it may wind up being positive due to tax effects.) It’s a risk factor, of course, but far from making no sense.

None of which is particularly relevant to the deal at hand other than in raising a potential conflict of interest among related parties.

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

#245

Post by karl_gluck » Mon, Jun 08, 2026, 9:59 PM UTC

Is this HN user runako’s comment[1] from 2 days ago turned into an article?

I guess it’s very possible multiple people are coming up with the same idea at the same time but given this was submitted by the author it seems kinda rude not to mention it.

[1] https://news.ycombinator.com/threads?id=runako#48426082

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

#246

Post by supern0va » Mon, Jun 08, 2026, 10:03 PM UTC

minraws wrote: post #139

atleastoptimal wrote: post #121

Earlier quoted context omitted.

Enron collapsed due to legitimate fraud. To imply Enron is an apt comparison requires assertion that AI companies are actually cooking the books. Is that what you are saying?

The ARR were fine but showing skewed quarterly profitability numbers by slowing down research due to hitting compute capacity suggests otherwise. I am certain Anthropic spent less on building the next model this quarter if they make it to profitability due to the shear fact that they don't have enough compute. Which solves the profitability problem with relative ease momentarily. Also just to confirm, AI subscription…

>The ARR were fine but showing skewed quarterly profitability numbers by slowing down research due to hitting compute capacity suggests otherwise.

I have to say, I find this really puzzling. We know for a fact that Anthropic are making bank on metered inference. That's their biggest source of profitability, we are seeing software companies start to majorly adopt coding agents over just the last few months.

Right as the biggest driver of enterprise adoption is accelerating, and it's tied to their biggest profit vector, you find it suspect that their profits are increasing significantly?

Also, can you clarify what you mean by "slowing down research" exactly? Do you mean they're not doing big pretraining runs? Less compute available for researchers? Scaled back RL?

>Also just to confirm, AI subscriptions are definitely being sold at a loss how big I don't know but these models are much harder to run.

Maximum usage of AI subscriptions is a loss, but do we actually know how that nets out? Has anyone done any research to try to figure that out?

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

#247

Post by noncoml » Mon, Jun 08, 2026, 10:06 PM UTC

PixyMisa wrote: post #230

crystal_revenge wrote: post #143

Earlier quoted context omitted.

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…

Also, SpaceX is a rocket and communications company with a secondary AI play, where Anthropic and OpenAI are pure AI companies. And it is far and away the world leader in satellite launch capacity and satellite internet. Does that justify the massive valuation? Probably not. But it's a factor.

If you sum the valuations of the company from its individual parts, no one sane would value it more than half a billion. But look at TSLA a P/E still at 370.

Who is the smart and who is the idiot?

The one who invested in it $40 or the one who was saying that even at $40 it was already too expensive?

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

#248

Post by outside1234 » Mon, Jun 08, 2026, 10:06 PM UTC

EDIT: A data center REIT where 1/5th of the datacenter falls apart each year and needs to be rebuilt. (aka "not a good REIT investment")

Because the GPUs go out of date.

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

#249

Post by NewJazz » Mon, Jun 08, 2026, 10:07 PM UTC

emodendroket wrote: post #212

NewJazz wrote: post #88

Earlier quoted context omitted.

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?

Uh, only when people don't seem to understand it, or try to personify it. Which is quite often.

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

#250

Post by Eisenstein » Mon, Jun 08, 2026, 10:08 PM UTC

WarmWash wrote: post #221

hdndjsbbs wrote: post #198

Earlier quoted context omitted.

The people who have private investments in SpaceX pre-IPO definitely have access to investments I don't have access to.

I didn't even mention venture capital because the win rate is so low. When you have billions already, then maybe you can buy $10M lotto tickets that get pitched to you. If you're a regular guy and want risk exposure like that, you can buy penny stocks. Everyone is so fixated on the winners, that they completely forget (or aren't even aware) that there a many many times more losers.

I think people understand that there are losers. What they are complaining about is that the losers can dump $10M on a lotto ticket and not feel any pain when it disappears. If all those with money are are placing huge long-shot bets and cashing out when they win then what does that say about the state of the system, and markets in general? I don't know exactly, but I don't think it's good.