311–320 of 580 posts
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Fundamentals dictate hardware is a depreciating asset, they're not wrong. They're just ignoring the reality of the current market.
This was true when Moores law wasn't dead. Per watts performance has been flat since Ampere. There is a reason why undervolted 3090s are still used.
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I don't see Alphabet share price changing much just because of SpaceX being valued 2T instead of lets say 1T (being extremely generous). In fact this deal will hurt their profits, which is more likely to hurt Alphabet stock price than the valuation of an asset that they hold.
> I don't see Alphabet share price changing much just because of SpaceX being valued 2T instead of lets say 1T Half of Alphabet's revenue increase last quarter came from marking up unrealized gains in their Anthropic investments. I'm not saying Alphabet is doing this to juice the share price, but I want to point out that they don't have to sell shares to post banner earnings results and see a 10% jump in share price…
EDIT: A data center REIT where 1/5th of the datacenter falls apart each year and needs to be rebuilt . (aka "not a good REIT investment") Because the GPUs go out of date.
And yet Anthropic is paying xAI over a billion dollars a month for those out of date GPUs in their first datacentre (H100s being nearly 4 years old at this point). Even A100s are still barely available on the major clouds despite being 6 years old.
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> Elon is brilliant when it comes to hardware. What shall that even mean?
Tesla, Falcon 9, Starlink, Mechazilla, SolarCity, Colossus, Neuralink, Starship, Optimus...
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…
I think the point is, that although at least xAI is monetizing their GPUs/datacenters, they are doing so at a REIT/rental multiplier instead of a frontier lab multiplier. Clearly, xAI thinks this is the best way for them to extract value out of their assets. Also, it is clear that Google and Anthropic both think they can extract more value out of those assets than they will pay in rent to SpaceX.
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They are making $24B/yr on datacenters they built in < 2 years for $2-3B. To call that a "modest ROI" is... quite a statement.
It's right in the article, there were 40bn of disclosed costs. It's still a good return, it pays for itself in 18 months, but if you build and rent data centres, then that's your business, and you're not likely to 100x in 3 years, which is the wild projection behind their valuation.
But better to make some money with it while trying to catch up than none money hoping you _can_ catch up.
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…
It's clever business perhaps, but it's terrible governance.
But then Musk will always control the majority of voting rights in SpaceX, so not like the shareholders are able to vote to remove him from the board. Being fair, it's the same share structure Zuckerberg uses to retain control over Meta, in case I give the impression that I think only Musk is doing this.
Which is why I'd never buy shares in either of them, the directors are supposed to act in the best interests of all shareholders, and well, if you can't vote on director appointments, you can't do anything when they decide to act in the best interests of a few shareholders.
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This was true when Moores law wasn't dead. Per watts performance has been flat since Ampere. There is a reason why undervolted 3090s are still used.
GPUs do have a life expectancy. They don’t run forever, especially at high temperatures and full utilization.