> generally it's a commodity

The NVIDIA GPUs, HBM, land-use permits and power-supply agreements xAI nailed down are absolutely not commodities.

I think xAI is a mess. But let’s call a spade a spade, they speculated on AI compute and they are currently right.

grogers 27 minutes ago | parent | next [-]

My read is that xAI built a lot of compute for their own use, but they didn't get any adoption so they are reselling the unused capacity to recoup at least some of the costs. So calling it a good bet is kind of misleading

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fc417fc802 2 hours ago | parent | prev | next [-]

> and power-supply agreements

Don't you mean gas turbine purchases and questionably legal operation? But yeah I feel exactly the same way. The AI part of xAI looks like a mess but it seems that they still managed to score a massive win.

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JumpCrisscross 2 hours ago | parent [-]

> Don't you mean gas turbine purchases and questionably legal operation?

The point is it’s running. They built fast before the backlash got organized. Now everyone has to deal with delays and thoughtful permitting processes.

	▲	BoorishBears 14 minutes ago \| parent \| next [-]
		You're taking an odd tone here. The "backlash" is the poorest residents one of the poorest large cities in America trying to fight for their right to clean air. Your point might end "it's running", but wholistic thinkers have no problem considering the how they arrived there, given what it's doing to these folks for marginal benefit. It's not like xAI would go under if they had chosen a less populated location and waited to get permanent power.
	▲	XorNot 27 minutes ago \| parent \| prev [-]
		The point is they're in a business no one would claim is particularly profitable but claiming a valuation like they're in a totally different business - one where they're not even top 3. Its not that there isn't value in that business, but it's not the AI business either. Its the one where Oracle is laying off staff to try and avoid a revenue crash on future commitments. Both Google and Anthropic would be trying to can this sort of rental arrangement as fast as possible since it's a mind bogglingly expensive way to get something you already do in house.

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BoorishBears 31 minutes ago | parent | prev [-]

This feels highly revisionist: they bet on becoming a frontier lab and were aiming for AGI.

If they were speculating on compute, it seems highly unlikely they'd have spent the operating costs for the last 3 years of model development and deployment instead of just getting even more compute.