351–360 of 580 posts
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If I lease an apartment for two years, that's not an investment.
In accounting terms it’s not an investment it’s an operating expense or in your example a personal expense, but if you leased a property and operated a business (ie an AirBnB for an apartment) it could be considered as part of an investment as it’s a means to make a profit.
> 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?
There's no realistic way for the music to stop. The demand for LLMs is staggering and the big providers are charging full freight for inference. They might not make back the money from training but these data centers are definitely going to be fully utilized for at least the next 5 years.
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That's like saying "nobody is speculating in Enron stock" simply because there was electrical power that was sold for real revenue and consumed.
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?
Technology has a very short life. The difference is that a REIT might contain an office buildings that can be used for any business, but a data center is filled with carcasses that start rotting and stinking from the day of installation.
The idea that the AI data centers would depreciate in just a few years is plain wrong. The argument was that new chips would be so much more powerful and efficient that it would be cheaper to buy and operate the new chips than to just operate the old chips. Except that demand is significantly outpacing new chip manufacturing, and until it catches up years and years from now, the efficiency argument doesn't matter at…
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It is depreciating, but demand has been very high. There's a reason old 3090's went from $600 in 2022 o to over $1K in 2026.
My local inference rig now costs three times what I bought it for. If I'd gotten the max ram I could at the time I would have made $10k after selling the excess to my current spec. How someone can look at an asset class thats appreciated an order of magnitude in the last two years and say it will depreciate in value when the tailwinds are even stronger now is beyond me.
The same argument you’ve made would work for tulip bulbs, dotcom prices, or whatever. Prices go up until they don’t. Exponentials don’t last forever and the intrinsics of technology assets depreciate: things wear out and are also replaced with better things.
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.
And yet Anthropic is paying xAI over a billion dollars a month for those out of date GPUs in their first datacentre (H100s being nearly 4 years old at this point). Even A100s are still barely available on the major clouds despite being 6 years old.
It makes sense. They've long since fallen behind the big 3 in quality of their models. There's no good reason at this point to keep burning money on Grok rather than making back some of that money renting out their Colossus data center.
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It feels like this is the line people are using to justify the expense of compute capex
The fact that you can sell or lease out something for more than you bought it for is justification in and of itself.
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> 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?
But there are many funds that have different strategies, both passive and active. Such as by investing based on value, quality, dividends, etc.
I get that the average person doesn’t know this, but the 401k doesn’t inherently force somebody into broad market funds.
AFAIK the Colossus data center was more or less "brute force" when it comes to building a datacenter fast -- ie it was very expensive and they cut some pretty ugly corners (their generators are "temporary" to get around regulations, but I don't see how they can possibly be "temporary" and they create a massive amount of pollution compared to other power sources). The reason I point that out is the article mentions th…
Colossus is the world's largest single, unified GPU cluster, all GPUs acting as one coherent supercomputer rather than fragmented pools or multi-site setups. They spun it up in a fraction of the time by all estimates. It's not something you can just throw money at and reproduce the results.
Per Jensen Huang:
"As far as I know, there's only one person in the world who could do that; Elon is singular in his understanding of engineering and construction and large systems and marshaling resources; it's just unbelievable. A supercomputer that you would build would take normally three years to plan and then they deliver the equipment and it takes one year to get it all working."
..."it took 19 days to get Colossus from hardware installation to beginning training, the fastest by far anyone's been able to do that."
https://www.businessinsider.com/jensen-huang-elon-musk-super...
Regarding on site generators. Meta, OpenAI (Microsoft/Oracle) and others are also using on-site gas turbines, generators, and "behind-the-meter" power plants to keep up with the power demand. This has become an industry-wide strategy driven by grid constraints, with natural gas as a fast-deploy option.
It would be great if the grids could keep up with demand, if other options would be considered capable of producing the ongoing demands (ie. more renewable, nuclear, etc) but they're not, and companies are not going to just wait because then they're as good as done.