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gpm 4 days ago

Paying $10B for the option is also crazy though. Paying $10B for the thing outright and not just an option would be absurdly high.

mlinsey 4 days ago | parent | next [-]

Is this cash or compute? Elon has one of the world's biggest compute clusters spun up, and little inference demand to speak of.

Trading billions worth of idle compute, in exchange for a high-strike call option on the #3 player in the most-promising-vertical for AI, plus (presmuably) some access to their data, starts to sound like not a bad trade. Especially if you're pre-committed to betting your entire rocket company on winning in AI, and you're currently in sixth or seventh place.

HWR_14 4 days ago | parent | next [-]

> you're pre-committed to betting your entire rocket company on winning in AI

SpaceX has invested a small amount as a share of its value in XAI, and could survive the loss of its investment.

mlinsey 4 days ago | parent [-]

It's true he could write off xAI today and the company could still fetch a trillion-dollar valuation. But I was more referring to his stated intentions - between his stated plans, his actions taking SpaceX from a profitable company to spending basically all their revenue (plus a rumored large chunk of what's raised via its IPO) on AI, and seeing his tendency to make bet-the-farm bets on Tesla, I think it's fair to say he's committing to bet all of SpaceX on xAI.

Barbing 4 days ago | parent | prev | next [-]

I heard he made a deal with a company to use his clusters. Is there good data on demand for Grok? Seems like relatively little chatter at least, in spite of tremendous investment.

throwanem 4 days ago | parent [-]

[flagged]

sighthrowaway 4 days ago | parent | next [-]

[flagged]

the-peter 4 days ago | parent | prev | next [-]

[flagged]

estomagordo 4 days ago | parent [-]

I hate Trump as much as the next guy, but what is that evidence, again?

modriano 4 days ago | parent | next [-]

He had a very close, decades long friendship with the most notorious sex-trafficker-of-children-to-rich-creeps in modern history for decades. And when imprisoned, that infamous pedophile died while in a federal prison under Trump's control, with a strange gap in the CCTV video footage. And Trump's handling of the entire Epstein Files saga makes it clear that Trump is described extensively in those files and he desperately wants to conceal it. What could be in there that he would use the entire justice department to try and redact? Trump is shameless about things that are legal even if they're salacious (like sleeping with porn star Stormy Daniels), so you have to wonder, what could Jeffery Epstein's good friend be trying to conceal?

Also, he owned the Miss Universe org (including Miss USA and Miss Teen USA) for decades, and he was known to walk into the dressing rooms of teen contestants as young as 15 while they were undressed. [0]

Also, he bragged about molesting women, and a court of law found that he sexually assaulted E Jean Carroll.

I haven't proven the case that Trump had sex with a minor, but there's way more than enough probable cause to believe it's more likely than not.

[0] https://web.archive.org/web/20200111171647/https://www.rolli...

estomagordo 4 days ago | parent | next [-]

Obviously this looks very bad but you don't seriously think it constitutes evidence?

modriano 4 days ago | parent | next [-]

Imagine there's a camera continuously recording a cookie jar. A child eats all of the cookies and then deletes the footage from the time they ate the cookies. A parent returns to find their child covered in crumbs, loudly proclaiming they haven't eaten a cookie in years and actively interferes with the parent's investigation and tries to distract from it by throwing a brick through the window of an Iranian family down the street.

Are any of the facts in this hypothetical "evidence"? With the knowledge of the truth (that the kid ate the cookies), it's clear these are all relevant pieces of evidence. If we take knowledge of the truth out of the equation, would these facts still be evidence? Unambiguously they would.

brazukadev 4 days ago | parent | prev [-]

you don't seriously think it constitutes evidence? Do you even know what the word evidence mean? It is not the same as proof.

estomagordo 4 days ago | parent [-]

Maybe you would want to insert the term "circumstantial" or so.

gpm 4 days ago | parent [-]

Definitionally both circumstantial and direct evidence are forms of evidence. No modifier is necessary.

And incidentally you can be convicted in a court of law purely on circumstantial evidence, and that's the place in society where we have the highest standard of proof. The evidence all being circumstantial is not a gotcha.

sighthrowaway 4 days ago | parent | prev [-]

[flagged]

kennywinker 4 days ago | parent | prev | next [-]

https://www.thedailybeast.com/new-evidence-corroborates-clai...

estomagordo 4 days ago | parent [-]

Yeah that's pretty bad.

rhizome 4 days ago | parent | prev | next [-]

This isn't court. The evidence, such as it is, is all of the smoke which commonly motivates people to look for fire. The strongest and most comprehensive that I've seen is the argument that if Trump was not implicated in the Epstein files, he would be publishing them in free book form himself and forcing every media outlet to advertise it. Slight exaggeration, but I think truly only slight.

Not really relevant to the thread, but there are simple answers to the "eViDeNcE??" question. You may have already known this.

estomagordo 4 days ago | parent [-]

Again, circumstantial and speculative.

pyvpx 4 days ago | parent | prev [-]

Clearly you don’t and that disingenuousness is frowned upon in discussions here.

walletdrainer 4 days ago | parent [-]

So, where’s the evidence?

kennywinker 4 days ago | parent [-]

https://www.thedailybeast.com/new-evidence-corroborates-clai...

throe930rkrdi 4 days ago | parent | prev | next [-]

[flagged]

whatsupdog 4 days ago | parent | prev [-]

[flagged]

saaaaaam 4 days ago | parent | next [-]

Someone who works on a “sugar dating” app advocating for synthetic child porn? That’s… uncomfortable?

throwanem 4 days ago | parent [-]

To say the least. Great catch! 'O brave new world, that has such people in 't.'

danso 4 days ago | parent | prev | next [-]

Has the availability of deepfake porn generation reduced the demand for deepfake porn featuring real people? When deepfake generators are capable of creating convincing imagery of flawless ideal fake humans, why do you suppose there’s so many real humans who report being non-consensual subjects of deepfake porn?

numpad0 4 days ago | parent [-]

> Has the availability of deepfake porn generation reduced the demand for deepfake porn featuring real people?

yes

> When deepfake generators are capable of creating convincing imagery of flawless ideal fake humans, why do you suppose there’s so many real humans who report being non-consensual subjects of deepfake porn?

?

eCa 4 days ago | parent | prev [-]

One obvious argument is what it was trained on.

whatsupdog 4 days ago | parent [-]

Doesn't have to be. You can train it on normal pictures of children and nude images of adults.

throwanem 4 days ago | parent [-]

> Doesn't have to be. You can train it on normal pictures of children and nude images of adults.

You say this so casually, as though it were a normal thing to know, or as if a normal person would know it. Does that actually seem true where you live right now?

And how do you know that, anyway, Harsh? I mean, all those "unblocked" games you stole to give away and that you also put on Github, that's one thing. But this...

arowthway 4 days ago | parent [-]

Come on, it's not hard to come up with this idea. And it's not even true, model trained on clothed children and nude adults wouldn't know how children's genitals look like.

throwanem 4 days ago | parent [-]

[flagged]

jacques_chester 4 days ago | parent | prev [-]

If it's not in an 8K filing it isn't real.

omcnoe 4 days ago | parent | prev | next [-]

Problem is basically, that if the option works out (Cursor truly has the talent to train a frontier model on SpaceX's infrastructure, and were simply lacking the infra before) the fair price would be way way more than $60B.

OpenAI tried to acquire Windsurf last year for $3B and couldn't.

4dsf 4 days ago | parent | next [-]

Seems like Elon's move is two fold

1) A gamble based on cursor's compute constraint 2) if 1) plays out, he can purchase cursor via shares of spaceX over valued shares, at a fixed price should the valuation increase.

sailingparrot 4 days ago | parent | prev [-]

> Cursor truly has the talent to train a frontier model on SpaceX's infrastructure, and were simply lacking the infra before

Wild conjecture.

jaccola 4 days ago | parent [-]

I think this was an “if” scenario

sailingparrot 4 days ago | parent [-]

This makes more sense that my initial reading of it indeed

MPSimmons 4 days ago | parent | prev | next [-]

It reportedly has a $2B ARR, and a 5x multiplier doesn't seem insane to me, but who knows, honestly

danpalmer 4 days ago | parent | next [-]

But it's paying a 5x ARR multiplier for the right to buy at a 30x multiplier.

rvnx 4 days ago | parent | prev | next [-]

They have 2B ARR because their business model is about selling models cheaper than they cost.

The main frenzy with Cursor started when you could access Anthropic models practically for free.

Otherwise it is just VS Code.

NitpickLawyer 4 days ago | parent | next [-]

> Otherwise it is just VS Code.

This is a bit simplistic. It's the VS Code that everyone used before cc came to town. Real devs, on real projects. All that data they collected is worth a lot more than "just vscode". Their composer2 is better than kimi2.5 and it's just a finetune on that data.

xAI had a decent model in grok4 (it was even sota on a bunch of benchmarks for a few weeks), but they didn't have great coding models (code-fast was ok-ish but nothing to write home about, certainly nowhere near SotA). Now that they've been banned from using claude, they'll get their expertise + data to build a coding model on top of whatever grok5 will be + their cluster for compute.

It doesn't sound like a bad plan to me, financial shenanigans or not.

jurgenburgen 4 days ago | parent [-]

What data? Their commercial terms promised they wouldn’t keep any for training.

NitpickLawyer 4 days ago | parent | next [-]

There's a lengthy discussion to be had here, and there's enough lawyerspeak in every provider's data retention policy to wiggle out of anything. A few notes from their current data use page:

> If you enable “Privacy Mode” in Cursor’s settings: zero data retention will be enabled for our model providers. Cursor may store some code data to provide extra features. None of your code will ever be trained on by us or any third-party.

Note the "may store some code data" and "none of your code will ever be trained on". In general you never want to include actual customer code in training the data, because of leaks that you may not want. Say someone has a hash somewhere, and your model autocompletes that hash. Bad. But that's not to say you couldn't train a reward model on pairs of prompts + completions. You have "some code data" (which could be acceptance rate) and use that. You just need to store the acceptance rate. And later, when you train new models, you check against that reward model. Does my new model reply close enough to score higher? If so, you're going in the right direction.

> If you choose to turn off “Privacy Mode”: we may use and store codebase data, prompts, editor actions, code snippets, and other code data and actions to improve our AI features and train our models.

Self explainatory.

> Even if you use your API key, your requests will still go through our backend!

They are collecting data even if you BYOK.

> If you choose to index your codebase, Cursor will upload your codebase in small chunks to our server to compute embeddings, but all plaintext code for computing embeddings ceases to exist after the life of the request. The embeddings and metadata about your codebase (hashes, file names) may be stored in our database.

They don't store (nor need to store) plain text, but they may store embeddings and metadata. Again, you can use those to train other things, not necessarily models. You can use metadata to check if you're going in the right direction.

henry2023 4 days ago | parent | prev [-]

At 60B they might do it anyway and then pay 200M in fines when the court rules against them.

bottlepalm 4 days ago | parent | prev [-]

xAI needs a dev tool to compete with Codex and Claude Code.

Cursor needs their own 1st party backend model.

Sounds like a match made in heaven.

ryanSrich 4 days ago | parent [-]

Not quite first party, but composer 2 is far superior to grok for coding. Unless you're eluding to them using SpaceX infra to train their own model vs. using grok

bottlepalm 3 days ago | parent [-]

If they're the same company then Grok becomes first party to Cursor.

Unit327 4 days ago | parent | prev [-]

2B ARR at what cost base?

vessenes 4 days ago | parent | prev | next [-]

Not only is it almost certainly compute (“services”) it’s likely priced at Anthropic rack-rate, or at least what Cursor’s been paying Anthropic.

The cluster’s already paid for, so likely in the $2B range for operating cash needs. Not more than $5.

If I imagine bringing in Cursor’s team to build a frontier model, ideally combined with Grok, which has one of the few truly proprietary data feeds available to it, and with a much larger custom model Cursor can solidify a place, and I get to do a stock swap to buy it, this sounds like a bet worth making.

Upshot - I bet there’s an MS/oAI deal on IP on the back of this; meanwhile the cluster goes brrr.

muyuu 4 days ago | parent | prev | next [-]

Is that so or would those 10B be discounted from the purchase?

not that it isn't wild regardless

gpm 4 days ago | parent [-]

I'm not sure what you're referring to by "that" but I think you're right that it's 10B to not purchase or 60B to purchase, so as an option posting $10B for an option with a $50 strike price.

muyuu 4 days ago | parent [-]

have concrete terms been published or is that an educated guess of the contract?

gpm 4 days ago | parent [-]

It's a statement based on the contents of the articles linked at the top of this comments section.

Lonestar1440 4 days ago | parent | prev [-]

But they also get a whole bunch of AI Services from Cursor. Other comments have noted that xAI has fallen on bad times (idk one way or the other) so perhaps they were going to spend $5B on getting these services elsewhere, anyway.

SpaceX spending $1B a month on various AI services seems ~plausible

(EDIT - Or maybe it's an IP transfer, or maybe it's over a longer time horizon. Idk but SpaceX clearly expects value from 'our work together' even if they don't exercise.)

gpm 4 days ago | parent | next [-]

$1B per month on AI services does not seem remotely plausible to me... Engineers don't consume that many tokens...

And on the AI development side they're the ones providing compute in the form of a "million H100 equivalent Colossus training supercomputer"... On top of the cash.

4 days ago | parent [-]
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robertjpayne 4 days ago | parent | prev | next [-]

Cursor has no AI services, they do not develop their own frontier models. I see no reason to understand why $10bn for Cursor's services is an advantage xAI versus say a $10bn deal with Anthropic, OpenAI or Google.

omcnoe 4 days ago | parent | next [-]

It's true that Cursor doesn't have their own frontier models, but they are training their own models. They just aren't at frontier level yet. The $60B/$10B deal looks like a bet that this is a capital/GPU constraint rather than a capability one.

Lonestar1440 4 days ago | parent | prev [-]

Those other companies wouldn't also toss in a purchase option.

But I agree that it's hard to articulate what Cursor services you could blow this much money on.

Maybe it is all just an option! Or maybe they get a bunch of IP either way?

NuclearPM 4 days ago | parent | prev [-]

Plausible how? Explain please.

Lonestar1440 4 days ago | parent [-]

Tokens. Tokens spawning sub agents using more tokens. Maybe some training too.

I didn't say it was Wise.

I said it seems within possibility for this, very particular, corporation.