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Comment by burnerRhodov3

16 days ago

What about the compute deals? $3.1B a month for half their compute? Elon built $6B of rev in 122 days. What can he do now that he's got a $85B war chest of cash?

13 comments

burnerRhodov3

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panick21_  16 days ago

Buying NVidia gear early and renting it out isn't exactly business model. Like what is their moat? While literally everybody is bidding up hardware?

The only way you can see this continue as a model if space based data-centers actually can beat everything land based. And that is very questionable.

> What can he do now that he's got a $85B war chest of cash?

Increase the profit of Micron and NVidia?

  • burnerRhodov3  16 days ago

    >Buying NVidia gear early

    xAI was retardedly late to the party. When Elon Musk founded xAI in July 2023, competitors had already spent years buying up massive silicon footprints and locking down cloud partnerships.

    OpenAI had a 3 year lead, anthropic 2.5 years, and google was building TPU's since 2015... what are you talking about?

    • panick21_  15 days ago

      First, many more people then just them buy these things and have ramped up their spending over the last 2 years.

      And others if they were earlier, the explosion and demand of investment increased exponentially over the last 2 years, as we can see in the profit margins of the memory companies for example.

      My claim was not that they were the first ever, but that Musk mobilized a huge amount of resources fairly quickly in a time where prices were exploding and before many others.

      Early enough that compared to now he got a ok price and he can rent it more expensive then he bought it.

      3 replies →

sublimefire  16 days ago

They have quite short cancellation notices and there is a question why do you need to rent it if you are an ai company? How is it grok not running the world using that compute.. And possible cancellation will erase a large income stream, think when gpus get old or sooner when Google does not need it anymore.

  • burnerRhodov3  16 days ago

    >there is a question why do you need to rent it if you are an ai company

    Uhhh... $3.1B a month for $20b in capex sound like the best investment ever?

pm90  16 days ago

The compute deals are going to go the same way as all those data centers that openai said they would need to build.

y2244  16 days ago

The compute deal is for their depreciating hardware.

Matter of time before its no longer considered good enough by the main players.

Anthropic are building their own Datacenters so it's a stop gap