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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

#441

Post by s08148692 »

bobsomers wrote: post #322
blactuary wrote: post #308

Writing this: > In comparison, SpaceX/xAI are incredible at building datacentres on time. The original Colossus 1 datacentre was built in 122 days. Musk's empire does have a huge advantage in really understanding how to plan, build and execute enormous infrastructure projects quickly Without even mentioning that it was done illegally and the air pollution they are creating with gas turbines is wildly irresponsible

It's easy to deliver things fast when you don't care at all for the local communities or residents whose lives you ruin in the process. https://www.youtube.com/watch?v=_bP80DEAbuo (@ 4:08)

No it's not. That statement assumes other corps care. They don't. If it was easy, everybody would be doing it. The fact that not everyone doing it is not because everyone else is not out of the goodness of their hearts

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

#442

Post by imtringued »

SlinkyOnStairs wrote: post #45
treis wrote: post #14

Earlier quoted context omitted.

There's no realistic way for the music to stop. The demand for LLMs is staggering and the big providers are charging full freight for inference. They might not make back the money from training but these data centers are definitely going to be fully utilized for at least the next 5 years.

> the big providers are charging full freight for inference. Except they're not. Anthropic's claims of temporary profitability line up exactly with when SpaceX is giving them discounted compute, OpenAI's such a shitfest they threw the CFO off the glass cliff for daring to push back against the IPO. "Profitable on inference" is an unsubstantiated rumour. Just look at the copilot changes. Demand switching to other prov…

Anthropic is a five year old startup, if they can be profitable that quickly in the AI space, even if only temporarily, I'm not really seeing the problem?

These companies are going all in and growing rapidly, because they want to dominate the market and since it is difficult to differentiate between competitors, even being third place is a terrible place to be in the consumer facing AI space.

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

#443

Post by zozbot234 »

almog wrote: post #439
nl wrote: post #309

Earlier quoted context omitted.

> Compute is also a rapidly depreciating asset. That's the default assumption but in the new GPU+Memory constrained age isn't true. Time on 4 year old H100 servers costs more now than when they were new (!!)

Depreciating doesn't just mean it could depreciate in value relative to the performance of newer GPUs, but also that its lifespan is limited by reliability issues and failures.

[dead]

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

#444

Post by imtringued »

alpha_squared wrote: post #226
_alternator_ wrote: post #122

Earlier quoted context omitted.

This take clearly has a bone to pick. But ignoring that, the first sentence is just not reflective of the reality here—xAI is making a killing on renting out its GPUs, way more than "just power". The dynamics that normally make infrastructure providers have slim margins don't apply when demand far outstrips supply; the situation right now is closer to monopoly pricing power. It will likely take a few years for supply…

> xAI is making a killing on renting out its GPUs, way more than "just power" What's your evidence for this? Because from the S-1, SpaceX is largely an internet service provider that happens to launch rockets and own xAI.

xAI is a failure of an AI company from a consumer perspective. They invested a large amount of money into owning their own infrastructure, while driving away consumers with their right-wing or "alt right"-ish branding and having a reputation of X users abusing the AI services.

Turns out there was another company with a much better reputation for which the compute is a better fit. Now that the data centers are being put to use, they actually make them a little bit of money instead of losing money.

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

#445

Post by softwaredoug »

I’m not anti data center, but Colossus 1 is the posterchild for the anti data center crowd. The grievances with Colossus 1 might be a major cause why other data centers have such high opposition.

Polluting power generation, straining local power and broken promise after broken promise to fix the situation. And regulators caring more about helping xAI than mitigating the problems.

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

#447

Post by code51 »

nl wrote: post #309
adjejmxbdjdn wrote: post #251

Earlier quoted context omitted.

Compute is also a rapidly depreciating asset. I want to make a comparison with a car rental business and say that it would be like valuing Hertz entirely on the basis of the number of cars they own, as opposed to how many they rent out, but cars have a much longer depreciation period, if there are no customers they’re not costing you more money, unlike your computer which you are using for training and sucking up mas…

> Compute is also a rapidly depreciating asset. That's the default assumption but in the new GPU+Memory constrained age isn't true. Time on 4 year old H100 servers costs more now than when they were new (!!)

That's just inflation (yeah, the global one) and demand at play.

Let's not mix up depreciation of real value vs USD price (which is arbitrary, plus government controlled)

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

#448

Post by iugtmkbdfil834 »

andy_ppp wrote: post #438
saulpw wrote: post #401

Earlier quoted context omitted.

Rich people become the only consumers.

Yes, the plan seems to be anti human in the extreme. Why do you need the plebs if they can be entirely replaced by AI? But the question then becomes why does the AI (and before that their security detail in a post money world) need billionaires?

This likely is the tertiary reason as to why llms are so heavily kneecapped. Granted, at this point, projects do exist to remove those arbitrary restrictions, but the effort that goes into it suggests it is a real concern.

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

#449

Post by [deleted] »

pants2 wrote: post #367
frankacter wrote: post #360

Earlier quoted context omitted.

Cheap. Fast. Good. Pick two. Colossus is the world's largest single, unified GPU cluster, all GPUs acting as one coherent supercomputer rather than fragmented pools or multi-site setups. They spun it up in a fraction of the time by all estimates. It's not something you can just throw money at and reproduce the results. Per Jensen Huang: "As far as I know, there's only one person in the world who could do that; Elon i…

Colossus took an old manufacturing plant where they made rangetops and stoves and turned it into a functioning 100,000-GPU datacenter in 122 days. That's a truly insane turnaround time!

[deleted]

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

#450

Post by elictronic »

snypher wrote: post #290
Dig1t wrote: post #265

Earlier quoted context omitted.

All that means is that there's a bottleneck at the data center layer. When he says "dark GPUs" he's saying that there are no dark DEPLOYED GPUs. This is a reference to the 1990's dot com bubble where internet infrastructure companies overbuilt network capacity, leading to the term "dark fiber". That was an indicator of a bubble because it showed that capacity was larger than demand. OP is saying that this is specific…

Don't you think that under excess demand, production will ramp, competition will become available etc? These posts read like we're all out of fresh silicon or something.

Supply will catch up, it will just take 3-5 years, with the price rising the whole time. Basically a worse version of the Covid supply disruption where I sold my car for more than I bought it for years later.

The physical world can’t be patched overnight, and cutting edge manufacturing takes a long time. Fortunately we are in a very peaceful low tension world right now and no one would try burning down or blowing up one of those extremely important, irreplaceable fabs.

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