All important technologic revolution can turn into an infrastructure revolution => the railroads, electricity etc … so the technology can be a transformation while the capital cycle becomes in excess
Google to pay SpaceX $920M a month for compute capacity at xAI data centers
811–820 of 1001 posts
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#812Is there any data on whether Google, Amazon, Microsoft, Anthropic, OpenAI etc are most cost efficient in getting datacenter compute online and operating it? I'd be interested in how large the range is here across company and region and specific data center and how it relates to companies like Hetzner if at all.
Amazon / AWS is very efficient at it. They are the largest cloud by a significant margin. Much larger than Hetzner.
Google and MS may be close behind.
Not sure about Meta but they are also renting from Amazon so...
Anthropic mostly rents from Amazon, Goog & MS.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#813Earlier quoted context omitted.
What about swapping the SP500 for VT (total world equities)?
For those unaware (myself included), VT is the Vanguard Total World Stock Index Fund ETF which "tracks the FTSE Global All Cap Index, covering roughly 9,000 stocks across more than 40 developed and emerging markets." I see this argument a lot online: "You need more diversity." First, you didn't provide any reason or evidence about why this is a good idea. Second, "more diversity" isn't always better. The S&P 500 has…
https://www.apolloacademy.com/sp-500-concentration-approachi...
> The 10 biggest companies in the S&P 500 make up almost 40% of the index, and if Anthropic, OpenAI and SpaceX are added later this year, the concentration could approach 50%, see chart below. The bottom line is that the S&P 500 basically doesn’t offer much diversification anymore.
> My investment philosophy comes directly from Warren Buffett: "Never bet against America". Of the three largest economic zones in the world with free markets (United States, Europe, and Japan), the United States is by far the most dynamic. Ask yourself: In the next 30 years (or more), which of those three regions will grow the most? In my view: Absolutely the United States.
The next 30 years will not look like the last 30 years, and to be frank, this administration impaired any thesis of the US being at the center of the economic world globally for at least the next decade or two. The ultimate strength of the US economy was that global trade centered around the US. That trade is already reconfiguring around the US, and will continue to do so to de-risk and decouple. How is the US supposed to grow with restricted immigration? 21 states already have more deaths than births and this will continue to all 50 states eventually. India and Africa are the last parts of the world where any growth will be found, everywhere else is in terminal population decline.
https://www.visualcapitalist.com/fertility-rate-of-world-pop...
So! VT reduces your concentration risk from the AI bubble (versus the SP500) while still keeping you exposed to a risk asset class (total world equities) to capture higher returns than you’d get with bonds.
Your backtesting is of no value in this context, the world has changed permanently due to the actions of this administration. Portfolio composition decisions made today are for the future, not the past. Past performance is no guarantee of future results.
Citations:
https://web.archive.org/web/20210104201135/https://advisors....
https://www.morningstar.com/portfolios/experts-forecast-stoc...
https://www.aqr.com/Insights/Perspectives/The-Long-Run-Is-Ly... (click through to the full version, the last decade+ of US out performance was mostly just the US getting more expensive, not US companies being much better than foreign companies)
https://www.morningstar.com/stocks/you-might-think-industry-... (We see the same results looking at the more recent period of July 1963 to September 2024. US stocks returned 10.64% annually, high-tech stocks returned 11.35%, healthcare stocks returned 11.99%, and both were outperformed by beer, which returned 12.18%, smokes, which returned 14.56%, and guns (defense), which returned 12.77%. Even shops (wholesale, retail, and some services such as laundries and repair shops) outperformed, returning 11.88%)
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#814Earlier quoted context omitted.
What about swapping the SP500 for VT (total world equities)?
For those unaware (myself included), VT is the Vanguard Total World Stock Index Fund ETF which "tracks the FTSE Global All Cap Index, covering roughly 9,000 stocks across more than 40 developed and emerging markets." I see this argument a lot online: "You need more diversity." First, you didn't provide any reason or evidence about why this is a good idea. Second, "more diversity" isn't always better. The S&P 500 has…
I do not understand how you can talk about US, EU and Japan but not mention China. Because I'd bet China is in a similar league and has better prospects than any of the three.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#815Earlier quoted context omitted.
It might be. It might not be. That's where the money is or isn't. I think the mature part of their business is 3/Y, energy storage, and maybe cybertruck, although I also think it's too early to call it because it depends on lower cost cell in house cell production and they only started that recently. In the near term, the growth part is Semi, cybercab, FSD, lithium cell production, and maybe cybertruck. In the long t…
The growth part of Tesla is the increasingly large promises of snake oil Elon can spin.
That's what many said when they were ramping the S/X, the 3/Y, and energy storage.
https://www.wired.com/2009/10/audi-etron/
That doesn't mean they can't make a mess of things all by themselves. But comparing their infra investments/growth strategy to snake oil when they've gone from nothing to $100 billion/year in 15+ years might be short sighted.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#816Earlier quoted context omitted.
TSLA has a forward PE of ~200x. That is probably the most logical comparison with SpaceX. Proof that the market can stay irrational for quite a long time. It fills me with a bit of dread about the future of the market. I am 10 years out from retirement, have a bit over 1M sitting in that market, and I wonder if it will implode in the meantime. I am fairly committed to the "invest like a dead man" (i.e. index funds, n…
Start gradually converting your equity to bonds is the standard advice on that timeframe. If you're dreading equity drawdowns, that's what fixed income is for.
You absolutely need to get inflation adjusted bonds. Otherwise you’ll get wiped out. I am in the krugman, stiglitz monetary camp; so not prone to constant fear of hyperinflation but what the government is doing makes inflation certain and the only way out a fairly painful recession either of will be hard on equity and bonds.
The market of a good leader is a lack of chaos. We are seeing the effects of a chaotic mind untethered from an accurate view of reality. Buckle up
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#817Earlier quoted context omitted.
I wouldn't call it brilliant. It's like cancer cells celebrating how fast they're growing.
Isn’t that the entire point of a capitalist economy? What is the alternative?
>> I wouldn't call it brilliant. It's like cancer cells celebrating how fast they're growing.
> Isn’t that the entire point of a capitalist economy?
> What is the alternative?
If the point is to be cancer, then the alternative is to kill it.
Things are getting so out of hand, this former-libertarian is getting to the point were he'd support any market regulation that makes libertarians cry.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#818Earlier quoted context omitted.
Bus Tesla isn’t in anything looking like a growth phase
2024 total deliveries: 1,789,226 2025 total deliveries: 1,636,129 8% decline YOY, Tesla shut down production of Model S & X. Eventually, they will become a pure speculation as a service stock, with zero production. But its cheaper to produce than bitcoin, no energy needs to be expended, runs on pure Musk energy!
They shut down production of S & X to make more capability for cars that they want to focus on and which sell way more, AND Cybercab.
Tesla grows in large steps. Next big step is Robotaxis, which is well on its way. After that, robots, for which they have the best real-world AI platform for.
You could say Tesla is a speculation stock as well when they had released the Roadster. Tesla shorters always lose.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#819Earlier quoted context omitted.
Eh, Tesla had a relatively normal growth company valuation for a while when they were growing strongly. The problem is the stock still hasn't compressed the multiple back down as growth stagnated... because the market swapped out "valuation based growth" for "call option on robotaxi success" at the blink of an eye.
Robotaxi failed so now it's Optimus bots.
Failed? When? It's not doing too bad last I checked. While the competition flounders.
Robotaxi is the next great growth thing. After that, it's Optimus.
Re: Google to pay SpaceX $920M a month for compute capacity at xAI data centers
#820Earlier quoted context omitted.
What isn't right? I pointed out that if you adhere to the same power density then cooling is no longer a challenge on earth (in reply to the observation that cooling a DC on earth is one of the biggest challenges). For the record the equilibrium temperature in earth orbit is above freezing but below room temperature. Cooling won't be a problem at all unless you bring along a self contained power source. Heat distribu…
The idea that passive radiators don't work on the ground isn't right. I wrote it badly, the core of your argument is really fine. The reason we don't use them is because the other options are cheaper. But passive radiators on the ground are orders of magnitude cheaper than on space because they can use convection and conduction.
> The reason we don't use them is because the other options are cheaper.
Yes, that is literally what I have been saying from the beginning. Are you sure you didn't misread my original comment?
> passive radiators on the ground are orders of magnitude cheaper than on space because they can use convection and conduction.
That statement is technically correct when comparing designs to radiate an equivalent amount of heat in the two environments.
However in context (ie solar powered computing in outer space in the vicinity of the earth) it is entirely missing the point that the problem is not a lack of surface area but rather efficient heat distribution across the already existing surface area. I have no idea how much that costs in materials and workmanship but when you're boosting things into orbit I don't think the material cost of a rudimentary heat spreader is likely to be of much concern. The weight certainly will be, but you can also get away with some incredibly flimsy designs when operating in zero g.