Meta is just another company that, like xAI/Grok, is at last starting to face reality: there are going to be two or three winners in this space, and they are not one of them.
Meta building cloud business to sell excess AI capacity
51–60 of 67 posts
Re: Meta building cloud business to sell excess AI capacity
#52I think we're going to look back on this as one of the things that really exacerbates this bubble. It's one thing for these companies to have high expectations of their future compute needs and therefore overbuild. But what the SpaceX/Anthropic deal showed was even if you fall short, you can profit by selling off your overcapacity. This means there is essentially no incentive to limit how much capacity you're buildin…
> But what the SpaceX/Anthropic deal showed was even if you fall short, you can profit by selling off your overcapacity.
Do you have proof that the deal is profitable (and for how long?) for SpaceX ?
Re: Meta building cloud business to sell excess AI capacity
#53Earlier quoted context omitted.
This is an interesting angle. I had not considered how fundamentally exposed Meta is, should Apple and Google decide to break omerta.
Btw I am just quoting someone else. It's in the news in for a long time. Besides ads monetization, Zuck's moves in recent years are mostly about creating their own platform so the Apple incident never happen again
It contextualizes all the strange Metaverse and VR-goggles stuff quite well. It always seemed like a weirdly forced product without any particular market fit - who is clamoring for a version of Teams where you need a bulky helmet, and can theoretically buy pretend digital land in order to have a... less useful corporate website? Who is interested in buying dorky goggles that instantly mark you as a weird creep who is probably recording everything you see?
Owning A Platform being the point instead of any actual use-case tracks perfectly with all these weird, forced pitches. These are all products for nobody.
Re: Meta building cloud business to sell excess AI capacity
#54So have they just given up on llama then? What happened to the 25 year old Zuck paid $250M for?
If you mean Alexandr Wang, the number is off by an order of magnitude. Forbes estimates he made over $3 billion from selling his startup to Meta and getting hired as chief AI officer.
Nah, it's a guy named Matt Deitke and he was 24 at the time.
Re: Meta building cloud business to sell excess AI capacity
#55xAI has shown this to be quite lucrative. And it seems to even make some sense - if the contract can be ended on relatively short notice, you basically have the capacity on stand-by if you ever need it yourself (accumulating GPUs is not trivial), but can monetize it if you don't need it. Though it's probably a bad sign generally that you can't capitalize on all the GPUs you've acquired.
> xAI has shown this to be quite lucrative How do you know this? Have they released any numbers?
I think the SpaceX IPO showed them to rent the clusters for billions a month
Re: Meta building cloud business to sell excess AI capacity
#56[dupe] Earlier on source: https://news.ycombinator.com/item?id=48745966
Re: Meta building cloud business to sell excess AI capacity
#57Earlier quoted context omitted.
It's an inherently different thing. Fibre is infrastructure. It'll still function decades later. GPUs at this scale are consumables. I've heard 3-5 years lifespan before they fail out. This might be a low estimate, but even if you double it - they're 50% of the cost of datacenters. We're flushing entire countries worth of economic value down an Nvidia shaped toilet.
Anyone got any good testing data? Surely someone knows rough failure rate from constant usage?
It's not that they fail (which they also do), it's that they become obsolete. They consume more energy to do fewer operations relative to newer nodes. This is the basis behind Moore's law.
Re: Meta building cloud business to sell excess AI capacity
#58Re: Meta building cloud business to sell excess AI capacity
#59Earlier quoted context omitted.
> xAI has shown this to be quite lucrative How do you know this? Have they released any numbers?
I think the SpaceX IPO showed them to rent the clusters for billions a month
That doesn't mean they're lucrative, though. They cost tens of billions to build and huge sums to run. Even if I believe that they are now running profitably, that doesn't mean they're "quite lucrative" overall.
SpaceX's numbers show xAI increasing its losses over time. In 2025, xAI lost $6.4 billion on $3.2 billion. In 2026, xAI posted a $2.47 billion operating loss in the first quarter alone.
Re: Meta building cloud business to sell excess AI capacity
#60Earlier quoted context omitted.
It’s a hard thing to measure right? Google under bet on demand for their AI infra and left lots of money on the table with Anthropic/ has to buy computer from SpaceX for awhile, Meta over built.
> Meta over built. In retrospect, this seems pretty easy for Meta to have done as heretofore they were a single captive customer AI shop.
Even then though at their scale - billions of DAU with pretty elite consumer distribution in terms of InstaGram and WhatsApp the future is hard to predict.
Like they have much lower cost of capital than OpenAI or Anthropic for example and far more direct to consumer muscle, if they could've gotten their models into a better position it's very possible they could've beaten out OpenAI on consumer AI. Probably a smaller prize to win than B2B AI but still huge.
And then if the case where AI is panning out but they are failing to execute (where we appear to be now) they have the option of becoming a SpaceX style NeoCloud that is pretty solid, even though most of their moves were pretty bad along the way.