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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

#541

Post by andrekandre »

fluidcruft wrote: post #482
ben_w wrote: post #472

Earlier quoted context omitted.

Long term, or short term? Short term, money physically exists and gets spent, so if you wave a magic want of oversimplification and transition all labour to AI instantly, all the money currently in bank accounts and wallets gets spend on the same businesses it was already getting spent on, a lot of which gets spent on stuff from other businesses who have in this scenario also replaced all their labour with AI. Eventu…

I don't know. It just seems odd because money was used as an abstraction of labor and if labor disappears it seems like money has no fundamental value. If you can't pay people to do something (because machines are doing all the labor). Then people have no money and money has no value to people. Industrialization resulted in transition to service-based economy but this new wave of machines are being said to replace se…

  > how do these people supposedly buying fully-mechanized burgers
stand in line and watch some ads; the more you watch, the more you can order!

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

#542

Post by grim_io »

brightball wrote: post #537
m3kw9 wrote: post #533

Face it, nobody serious is using Grok for anything, they may as well sell the compute

Yet

What's first, a usable frontier grok model or actual FSD(unsupervised)?

Might as well be the Mars colonization the way both are going.

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

#543

Post by mNovak »

otterley wrote: post #300

It's not a datacenter REIT. Datacenter REITs don't sell compute. They sell space, power, and cooling in which compute lives. I get the point the author is trying to make (in that SpaceX's most valuable asset is its compute capacity), but it's not quite the right analogy. SpaceX is basically Elon's holding company for everything-but-Tesla at this point. If you're betting on SpaceX, you're betting on a conglomerate.

I think the right comparison would be a vertically integrated Neocloud like Oracle (insofar as they own some/most of their own datacenters, unlike a CoreWeave).

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

#544

Post by JumpCrisscross »

s1artibartfast wrote: post #522
JumpCrisscross wrote: post #383

Earlier quoted context omitted.

> anything to read on how the economics of an orbital datacenter make any sense? I'll do a write-up at some point. But the core drivers are launch cost, permitting delays for terrestrial datacentres and interest rates. The balance is between, on one hand, the financing cost of the permiting delays against, on the other hand, the cost of launching radiators. (Chips are light. Solar panels without glass cladding are su…

why are oribital datacenters favored by lower financing costs? Is this assuming that the full project cost is locked up during permitting? Land costs I can see, but how much of a center buildout is that these days?

> why are oribital datacenters favored by lower financing costs?

Rates drive permitting costs. If rates are 1%, a 3-year delay is tolerable. If they’re 5%, that might crash your economics on its own.

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

#545

Post by WorldPeas »

olyjohn wrote: post #96
irishcoffee wrote: post #92

Earlier quoted context omitted.

I believe you've described "investing with a hope for a profitable return" which is usually the point of investing. Circular investing is a thing that is happening with all of these companies related to language models. Google hoping for a ROI isn't a great example of that.

Since when is leasing capacity in a datacenter considered investing?

it's about squatting a percent that cannot be taken, there are many companies I know of who have large capacity reservations they don't use only because they hope to use it /soon/ and don't want to deal with cold start times. I remember when one used to be able to start a lambda labs on-demand h100 job and it'd start in 30 minutes, now you'd be lucky if it happened the same day

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

#546

Post by ben_w »

andrekandre wrote: post #541
fluidcruft wrote: post #482

Earlier quoted context omitted.

I don't know. It just seems odd because money was used as an abstraction of labor and if labor disappears it seems like money has no fundamental value. If you can't pay people to do something (because machines are doing all the labor). Then people have no money and money has no value to people. Industrialization resulted in transition to service-based economy but this new wave of machines are being said to replace se…

> how do these people supposedly buying fully-mechanized burgers stand in line and watch some ads; the more you watch, the more you can order!

What good is showing ads to someone with no money?

(Only answer I can think of is political ads).

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

#547

Post by mNovak »

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.

Also gas turbines are on backorder until 2029, and new grid connection queues on a similar timescale.

Hence why all the bitcoin miners are cashing in (or trying to) by converting their facilities to datacenters.

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

#548

Post by db48x »

podocarp wrote: post #324
db48x wrote: post #296

Earlier quoted context omitted.

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?

I live in Oregon. The price was $900/month last time I checked. I believe they do provide a QSFP+ module to plug into your equipment. They also allow residential customers, at any tier of service, to announce their own IP blocks via BGP.

https://ziplyfiber.com/internet/multigig

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

#549

Post by senordevnyc »

fragmede wrote: post #433
jklinger410 wrote: post #137

Earlier quoted context omitted.

> I think everyone is reading way too much into this. Sure there is some circular transactions that are sus, but this ain't it. Let us pin this comment and see how it ages

Let's say it does all collapse. How would we know it's the 5-6% stake (which in my mind doesn't make them a "major shareholder") that was a circular deal that was the fall of the house of cards vs some other segment?

When has that kind of nuance ever stopped an angry mob with an axe to grind?

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

#550

Post by senordevnyc »

bootsmann wrote: post #83
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.

I can sell the tomatoes in my garden for twice the price of those in the supermarket and still make massive loses.

When you're selling orders of magnitude more than the grocery store? Only if you're completely incompetent.
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