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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

#201

Post by hdndjsbbs »

SubmarineClub wrote: post #193
hdndjsbbs wrote: post #124

Earlier quoted context omitted.

This is what financial capitalism and "democratizing finance" has meant in practice. Rich people have access to different types of investments, and by the time those trickle down to common investors the juice has all been squeezed out. Whatever the trend is, by the time you hear about it the market has already been arbitraged by faster investors with more resources. We are not going to come up with a market-based sol…

You do realize that basically all those fancy ‘exotic asset’ classes underperform the S&P 500, right?

Why does anyone participate in VC funds or PE at all then?

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

#202

Post by oblio »

JumpCrisscross wrote: post #174
oblio wrote: post #171

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. Alphabet/Google profits: Q1 2025: $34.54 billion Q2 2025: $28.20 billion Q3 2025: $34.98 billion Q4 2025: $34.46 billion > Amazon profits: Q1 2025: $17.1 billion Q2 2025: $18.16 billion Q3 2025: $21.2 billion Q4 2025: $21.19 billion > Both Alphabet/Google and Amazon have invested recently in…

> Both Alphabet/Google and Amazon have invested recently into Anthropic and are doing all sorts of financial chicanery bko didn’t say there isn’t circular financing going on. They’re just saying this isn’t an example of it. They’re right. It’s a potential conflict of interest. And if the agreement is fake—if Google cancels without paying the cash—it could be market manipulation. But the influencer space likes to latc…

Did I say it was circular financing? I said "financial chicanery". I even included a link to a video explaining said financial chicanery.

What are you even going on about?

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

#203

Post by treis »

doctorwho42 wrote: post #172
treis wrote: post #41

Earlier quoted context omitted.

>What happens in a few years when DeepSeek runs on the chinese chips like the Huawei Ascend at a fraction of the cost ? Nvidia goes back to being a 100 billion dollar business and everyone else reaps the benefits of cheap tokens.

So Nvidia will lose 94.5% of their market cap, and you think that will not effect anything beyond AI?

Not any more than when one company beats out another.

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

#204

Post by treis »

johnsmith1840 wrote: post #149
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.

Why do you think Chinese companies can do that? It's government subsidising price they do it with literally every ibdustry. Home grow a bunch discount them federally, let them wipe the foreign markets. If AI is threatened by china why would US NOT do the same? If they did they're in a much stronger position to do so than china. Cheaper energy, more cash, stronger industries. Infrastrucure is thr kind of thing that on…

It's not all Chinese companies. It's some western companies running Chinese models.

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

#205

Post by jorvi »

skybrian wrote: post #67
TSiege wrote: post #51

Earlier quoted context omitted.

If Alphabet can afford it why are they issuing $80B in new shares for fresh capital?

It makes good financial sense for a company to sell shares when the price is high and do stock buybacks when it's low. I guess they think the price is on the high side? Also, selling shares puts them in a better position to survive a downturn (more cash, less debt).

In a real competitive market it would never make financial sense to do stock buybacks because competition is so fierce you need to invest it all in R&D and sharp prices for your customers. See the Chinese EV market.

Stock buybacks are also a tax trick.

They're just holistically evil and should have never been made legal.

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

#206

Post by mlnj »

trollbridge wrote: post #191
doctorwho42 wrote: post #172

Earlier quoted context omitted.

So Nvidia will lose 94.5% of their market cap, and you think that will not effect anything beyond AI?

There's an assumption here that Nvidia will stop innovating.

The only assumption I am making is that NVIDIA and others dig thier claws into western governments and make decade long contracts for even greater surveillance. Trillions of dollars worth.

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

#207

Post by emodendroket »

nonethewiser wrote: post #79

Weren't we just talking about how SpaceX is valued based on some profits from starlink + tons of speculation? Yet when we learn of this new $26B in yearly revenue (2.2B/month from Google and Anthropic)the conversation does not return to that discussion. It transforms into: "xAI's tech sucks" "Google/SpaceX is Structurally Bad for the Economy" etc This is called motivated reasoning. We get new information and instead…

Well, perhaps, but those concerns seem different enough that it seems fairly plausible different people have them. It seems hard to argue the basic point that Grok is not as good as its competition if you spend time using both. That may or may not matter from a business perspective.

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

#208

Post by celdon25 »

Elon is brilliant when it comes to hardware. But unfortunately with xAI, he went on a firing spree, PayPal Mafia style, just like with Twitter when he bought it, shortly before doing another hiring drive, and failing to hire software engineers at scale.

The datacenter deals came after. But now, the man who promised the world an AI system that defends free speech and is “pro-human”, is instead selling to his competitors and lowering the daily app usage limits of his own Grok by an order of magnitude (really).

If you’re dealing with the world’s richest man, you can predict that money will come before other concerns despite other rhetoric. Interesting strategy though!

Edit: To be fair, they did decide that hardware was "the bottleneck" according to an interview I saw last year. But I firmly believe they underestimated the software problem (and their app was/is riddled with them).

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

#209

Post by JumpCrisscross »

oblio wrote: post #202
JumpCrisscross wrote: post #174

Earlier quoted context omitted.

> Both Alphabet/Google and Amazon have invested recently into Anthropic and are doing all sorts of financial chicanery bko didn’t say there isn’t circular financing going on. They’re just saying this isn’t an example of it. They’re right. It’s a potential conflict of interest. And if the agreement is fake—if Google cancels without paying the cash—it could be market manipulation. But the influencer space likes to latc…

Did I say it was circular financing? I said "financial chicanery". I even included a link to a video explaining said financial chicanery. What are you even going on about?

The comment you’re responding to and the comment above it are about circular financing. It’s reasonably to assume that’s the same chicanery you’re talking about; expecting everyone to watch a random video to understand your comment is unreasonable.

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

#210

Post by wmf »

chris_money202 wrote: post #87
nonethewiser wrote: post #79

Weren't we just talking about how SpaceX is valued based on some profits from starlink + tons of speculation? Yet when we learn of this new $26B in yearly revenue (2.2B/month from Google and Anthropic)the conversation does not return to that discussion. It transforms into: "xAI's tech sucks" "Google/SpaceX is Structurally Bad for the Economy" etc This is called motivated reasoning. We get new information and instead…

Think two things can be true at once. They should be using their capital to achieve their speculative price. Instead, they are using their capital to achieve a modest ROI, thus invalidating the speculation AND proving they have tech issues in what the speculation is around.

Elon says Grok models are being trained right now. (Unless I missed an update.) For whatever reason these training runs are not using xAI's full GPU capacity. Short of a miracle or time machine it sounds like there is nothing more they can do to advance their mission.
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