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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

#181

Post by stymaar »

ryan_j_naughton wrote: post #166
stymaar wrote: post #136

Earlier quoted context omitted.

The idea that inflation and the money supply are linked is one of the most dumb one in folk economics. Just look at these charts: they were declining when inflation was raging on in 2022-23 …

> "The idea that inflation and the money supply are linked is one of the most dumb one in folk economics" "folk economics" implies it is by untrained people. Milton Friedman's famous quote of "inflation is always and everywhere a monetary phenomenon" shows that he deeply believed the relationship between inflation and money supply, and one certainly cannot call Friedman a "folk economist" considering he won the Nobel…

> "folk economics" implies it is by untrained people.

The problem is mostly its appropriation by untrained people though.

> Milton Friedman's famous quote of "inflation is always and everywhere a monetary phenomenon" shows that he deeply believed the relationship between inflation and money supply

Creationists theoreticians believe in creationism too. The problem arise when their theory reach the mainstream… (Influential people inside the Swedish Central bank making a fake Nobel prize to promote these ideas didn't help of course…)

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

#182

Post by JumpCrisscross »

chasd00 wrote: post #104
skybrian wrote: post #80

Earlier quoted context omitted.

No, that's silly. Chips don't rot like produce. Some components will go bad and will need to be replaced. The owner can choose how fast to replace them depending on how prices look in a few years. The rest of the building (including things like power) will still be useful.

i think what op meant is they're instantly out of date. You're not going to be able replace every GPU in your datacenter on every new release from Nvidia and customers are going to go to whoever has the highest performing gear.

> customers are going to go to whoever has the highest performing gear

This is where we lack data. I’m skeptical of the claim. If anything will force retirement of old chips, it will be power efficiency, not customers being picky amidst a chip shortage.

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

#183

Post by sedawkgrep »

mohamedkoubaa wrote: post #119
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?

I have a riddle for you: If it looks like a bubble and waddles like a bubble and quacks like a bubble what is it?

Elon?

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

#184

Post by xnx »

aurareturn wrote: post #117
xnx wrote: post #42

Same idea expressed by a commenter here 2 days ago: https://news.ycombinator.com/item?id=48426082

I'll add that I said xAI seems to be dropping out of the AGI race: https://news.ycombinator.com/item?id=48214042 Makes sense. Very difficult to catch OpenAI and Anthropic now since their flywheel of generate revenue, use revenue to buy more compute, train a smarter model with more compute, made it hard to compete. Being able to supply compute makes more sense for SpaceXAI if you can't compete in SOTA LLMs anymore.

How long until Meta figures this out?

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

#185

Post by treis »

SlinkyOnStairs wrote: post #93
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.

> There's no other realistic explanation except that they're making bank. If they were, they'd never shut up about it. Yet they keep quiet about the financials.

They don't shut up about it. Profitable on inference has been the story for years.

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

#186

Post by Ray20 »

granra wrote: post #157
bluGill wrote: post #116

Earlier quoted context omitted.

Until someone can come up with a better option though... Note that a pension plan that invests for you blindly is no better - either the returns are so bad that they are a scam, or they are investing in stocks anyway and so you get the same results but less control. Similar for things like social security, they are either worse options or you need to pump stocks.

> Until someone can come up with a better option though... A welfare state maybe?

Eh? Like in North Korea?

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

#187

Post by aurareturn »

xnx wrote: post #184
aurareturn wrote: post #117

Earlier quoted context omitted.

I'll add that I said xAI seems to be dropping out of the AGI race: https://news.ycombinator.com/item?id=48214042 Makes sense. Very difficult to catch OpenAI and Anthropic now since their flywheel of generate revenue, use revenue to buy more compute, train a smarter model with more compute, made it hard to compete. Being able to supply compute makes more sense for SpaceXAI if you can't compete in SOTA LLMs anymore.

How long until Meta figures this out?

I don't think Meta has to. They have far bigger distribution than X.com. I think they'll be able to make use of their data centers better than xAI.

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

#188

Post by treis »

boarsofcanada wrote: post #126
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.

And yet they are not profitable on an ongoing basis, and aren’t even claiming to be. The supply is currently constrained because 50+% of data center plans were cancelled as a result of the impossibility of the buildouts happening in a timely fashion, and subscriptions are charging a small fraction of the actual cost of inference, leading them to all bleed money, hence the rush to IPO to get one last infusion, since m…

They've stopped subscriptions for the most part. Companies are paying API rates for their employees.

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

#189

Post by chris_money202 »

gunapologist99 wrote: post #170
throwaway5752 wrote: post #115

Earlier quoted context omitted.

There is a shortage, they are short lived assets. It's a blip and unrelated to their long term profitability and valuation. They can't make a long lived business of building and renting out compute at those margins. It was definitely a smart business move. It should be troubling to any shareholder than xAI is unable to utilize this infrastructure as renting it out to competitors.

Better not mention your theory to all the other Tier 1 data centers. Or maybe you're saying that it's only AI that's short-lived.

T1 companies have longer depreciation cycles, they have customers that will use the dated hw for non-frontier work. They can make the capex more justifiable and have flexibility to be more creative about its use. A frontier lab really needs the best hw available at full capacity.

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

#190

Post by SubmarineClub »

granra wrote: post #157
bluGill wrote: post #116

Earlier quoted context omitted.

Until someone can come up with a better option though... Note that a pension plan that invests for you blindly is no better - either the returns are so bad that they are a scam, or they are investing in stocks anyway and so you get the same results but less control. Similar for things like social security, they are either worse options or you need to pump stocks.

> Until someone can come up with a better option though... A welfare state maybe?

And the money to pay for all those retirees comes from…where?
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