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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

#321

Post by brikym »

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.

They're worthless to the S&P 500 which requires four quarters of profitability. SpaceX is running at a $5B loss. Google 'buys' $10B of compute every year...

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

#322

Post by bobsomers »

blactuary wrote: post #308

Writing this: > In comparison, SpaceX/xAI are incredible at building datacentres on time. The original Colossus 1 datacentre was built in 122 days. Musk's empire does have a huge advantage in really understanding how to plan, build and execute enormous infrastructure projects quickly Without even mentioning that it was done illegally and the air pollution they are creating with gas turbines is wildly irresponsible

It's easy to deliver things fast when you don't care at all for the local communities or residents whose lives you ruin in the process.

https://www.youtube.com/watch?v=_bP80DEAbuo (@ 4:08)

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

#323

Post by VirusNewbie »

gruez wrote: post #305
downrightmike wrote: post #284

Earlier quoted context omitted.

That's because they take and modify what is tracked in the CPI at will

https://www.bls.gov/cpi/tables/relative-importance/home.htm What do you find controversial, and would cause a material difference in the headline inflation rate?

Housing has a massive lag when it comes to CPI.

CPI works by asking how much people pay for rent. If home prices raise 20% in one year (not at all unreasonable in various times in the last ten years), it takes a long time for that to be reflected as many people have their rents fixed, some people have rent control, some landlords will only raise rents on new tenants, etc.

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

#324

Post by podocarp »

db48x wrote: post #296
hadlock wrote: post #276

Earlier quoted context omitted.

Adding to this, a lot of fiber installed in the 1990s is still dark. Multi-wavelength XYZ and other improvements mean the same fiber from 35 years ago can carry 100 or 1000x what it was originally designed for. Also, like Solar, all the cost is in labor. When they designed the Seattle/King County fiber network, they knew they would never have access/permits to go back and add more, so instead of running a single 12 f…

Yea, fiber is great. They can do hundreds of terabits/s per fiber today, and petabits/s is not far away. Bandwidth is fundamentally cheap enough that my ISP offers 50Gbps residential service!

Can I ask where do you stay? Korea? 50G is insane, is it on qsfp? Also what's the pricing on that?

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

#325

Post by emodendroket »

NewJazz wrote: post #249
emodendroket wrote: post #212

Earlier quoted context omitted.

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.

People “personify” their cars but I don’t think because they think cars have human cognition

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

#326

Post by podocarp »

AtlasBarfed wrote: post #280
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.

There is a compute shortage. In fact, for all these companies to do what they're going to do, they need a massive, massive massive amount of data centers, a highly improbable number of data centers that need to be built in an highly improbably short amount of time. And the capitals about to dry off in about a year. So it's a race between these improbable timelines on data center construction, with capital evaporating…

Source for capital drying up in one year? Not trying to be snarky but that's super big if true.

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

#327

Post by idiotsecant »

JumpCrisscross wrote: post #179
idiotsecant wrote: post #144

Earlier quoted context omitted.

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.

> Those target funds are at risk of being forced to buy these over-inflated assets Target funds are diversely managed. This isn’t a real concern.

The diverse investment is the reason that funds will be forced to buy these worthless stocks. It's a direct transfer of money from the working class to the extreme capital class.

If you're good with that, I'll send you my PayPal so you can get me my 5 bucks. It's a tiny fraction of your overall cash flow, whats the big deal?

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

#328

Post by credit_guy »

Sure, but it's very different from a regular datacenter REIT. It's supply and demand: a regular datacenter REIT competes with tons of other datacenter REITs. xAI has something to offer that basically nobody else can: datacenter capacity ready to use for LLM inference. When you are a monopoly you can charge exorbitant prices. There's no shame in being "just a datacenter REIT" when you can charge 10x what it costs you to run that datacenter.

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

#329

Post by joquarky »

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?

Simple solution: just put them in space!

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

#330

Post by podocarp »

johnsmith1840 wrote: post #149
treis wrote: post #59

Earlier quoted context omitted.

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 on…

This is just silly. Deepseek has published so much regarding speeding up and making cheaper inference and people are still harping on the government subsidies thing.

So what's all the project Stargate stuff? Subsidies only work when China is doing it?

Deepseek is actively sacrificing performance for cost, which is very clear in their latest model releases. They are not attempting to get to number 1 in benchmarks, and they say it clearly in their own publications.

Furthermore, being open weight, anyone can sell qwen and deepseek compute, not just Ali and deepseek themselves.

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