It's like buying a ticket for a concert, realizing you can't go and that you can resell it for more than what you paid.

You're right that long term it should stabilize into a low margin business.

Elon is also much less risk averse than others, which helps to build stuff fast, possibly cheaper, pushing legality to the limit. Colossus was definitely built much faster than anything else. I think building datacenters suits him better than a pure software play, where "move fast break things" is already the norm.

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bleepblap 5 hours ago | parent [-]

The concert analogy makes sense (I analogized it as "staunching the bleeding").

WRT SpaceX building data centers: I think there's a natural tension between a "low margin business" and "being risk adverse". SpaceX (the rocket business) did well because it was high risk and high reward. Building a 10b datacenter to hope to get a slice of a low-margin industry is high risk and low reward and just seems fundamentally like a losing strategy.

	▲	redox99 5 hours ago \| parent [-]
		It's not like Elon is a stranger to low margin. Making cars is low margin, and it's not like SpaceX has crazy margins now that we know the financials. Also I think stuff like Hetzner is a commodity. But are gigawatt scale data centers a commodity? You need those for AI training. Anyways their goal is datacenters in space, not traditional data centers. Although I think that's only viable for inference.