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Meta building cloud business to sell excess AI capacity

reuters.com

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Re: Meta building cloud business to sell excess AI capacity

#21

Post by johndhi »

cmiles8 wrote: post #19

So like likes of AWS are spending crazy sums building capacity citing amazing demand they can’t meet. Meanwhile those with capacity are saying hey maybe we don’t need so much and are building cloud businesses to compete with AWS and flood the market with excess capacity. Oh yeah, this is gonna end well.

I don't really think this necessarily means demand is limited.

It just means demand is consolidating to winners. There's no denying openai and anthropic and maybe Google have a ton of demand. The fact that xai and meta do not does not mean no demand exists.

Re: Meta building cloud business to sell excess AI capacity

#22

Post by bwb »

rwmj wrote: post #4
_heimdall wrote: post #2

For one thing, I still don't understand Meta as a business. It seems like Zuck refused to accept owning a boring ad business and keeps trying to act like a tech business. For another, this seems like a move that happens when the bubble pops. The dotcom bubble went from having tons of business raising fortunes on the promise of business models the internet unlocks to having few internet businesses left at that scale a…

The difference is the hardware will become obsolete in a few years, unlike the dark fibre (really, rights of way) that provided cheap connectivity for years after the crash.

Do we have any good data on how many of the GPU burn out given hard usage?

Are we talkinga bout loosing 50% of the hardware as it fails? Or far less?

Re: Meta building cloud business to sell excess AI capacity

#23

Post by cmiles8 »

johndhi wrote: post #21
cmiles8 wrote: post #19

So like likes of AWS are spending crazy sums building capacity citing amazing demand they can’t meet. Meanwhile those with capacity are saying hey maybe we don’t need so much and are building cloud businesses to compete with AWS and flood the market with excess capacity. Oh yeah, this is gonna end well.

I don't really think this necessarily means demand is limited. It just means demand is consolidating to winners. There's no denying openai and anthropic and maybe Google have a ton of demand. The fact that xai and meta do not does not mean no demand exists.

Everyone slamming the brakes on tokenmaxing and companies putting strict AI budgets in place is surely having at least some impact on demand.

And the point is not that “no” demand exists but the likes of AWS are building to the moon citing massive future need but that simply doesn’t jive with all this unused capacity from others coming to the market.

And building out massive capacity to sell a product that’s likely to trend to a low margin market commodity isn’t a great business.

Re: Meta building cloud business to sell excess AI capacity

#24

Post by eiejee »

re-thc wrote: post #18
_heimdall wrote: post #2

For one thing, I still don't understand Meta as a business. It seems like Zuck refused to accept owning a boring ad business and keeps trying to act like a tech business. For another, this seems like a move that happens when the bubble pops. The dotcom bubble went from having tons of business raising fortunes on the promise of business models the internet unlocks to having few internet businesses left at that scale a…

> It seems like Zuck refused to accept owning a boring ad business Zuck sees a real problem: not owning the platform. Hence the VR and other attempts. He sees what he has today as a dead end. The fear grips him. In theory Google and Apple could ban Meta’s apps and it would be game over.

lol that’s charitable

The real problem for Zuck is he thinks he’s some grand master who can play 5-d chess, except he can’t

Re: Meta building cloud business to sell excess AI capacity

#27

Post by eiejee »

gloryjulio wrote: post #7
_heimdall wrote: post #2

For one thing, I still don't understand Meta as a business. It seems like Zuck refused to accept owning a boring ad business and keeps trying to act like a tech business. For another, this seems like a move that happens when the bubble pops. The dotcom bubble went from having tons of business raising fortunes on the promise of business models the internet unlocks to having few internet businesses left at that scale a…

> For one thing, I still don't understand Meta as a business Zuck got spooked by apple ads change a few years ago, which crashed the meta's stock to double digit. So Zuck is trying to own a platform. They want to be a version of openai selling ads

Actually his basket case investments with VR is what led to a loss of investor trust

Re: Meta building cloud business to sell excess AI capacity

#28

Post by zaphirplane »

gloryjulio wrote: post #7
_heimdall wrote: post #2

For one thing, I still don't understand Meta as a business. It seems like Zuck refused to accept owning a boring ad business and keeps trying to act like a tech business. For another, this seems like a move that happens when the bubble pops. The dotcom bubble went from having tons of business raising fortunes on the promise of business models the internet unlocks to having few internet businesses left at that scale a…

> For one thing, I still don't understand Meta as a business Zuck got spooked by apple ads change a few years ago, which crashed the meta's stock to double digit. So Zuck is trying to own a platform. They want to be a version of openai selling ads

How is that different from Facebook

Re: Meta building cloud business to sell excess AI capacity

#29

Post by kombookcha »

gloryjulio wrote: post #7
_heimdall wrote: post #2

For one thing, I still don't understand Meta as a business. It seems like Zuck refused to accept owning a boring ad business and keeps trying to act like a tech business. For another, this seems like a move that happens when the bubble pops. The dotcom bubble went from having tons of business raising fortunes on the promise of business models the internet unlocks to having few internet businesses left at that scale a…

> For one thing, I still don't understand Meta as a business Zuck got spooked by apple ads change a few years ago, which crashed the meta's stock to double digit. So Zuck is trying to own a platform. They want to be a version of openai selling ads

This is an interesting angle. I had not considered how fundamentally exposed Meta is, should Apple and Google decide to break omerta.
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