| ▲ | delichon a day ago | |
Opportunity cost is the standard, not profitability. Companies generally try to invest in their core competencies and outsource the rest. The Nvidia deal with Groq is an example. They spent $20B for Groq's inference technology while leaving their profitable cloud services business alone. Selling shovels instead of mining gold can be a rational choice even when gold mining is profitable. And the shovel companies do better when gold mines are profitable. | ||
| ▲ | spwa4 a day ago | parent [-] | |
Unfortunately Tesla's great accomplishments do not lie in the car space, but in the getting investments space. In finance. Which means they will have the profitability right, exactly, guaranteed. Take the Tesla metal casting advance (single-press casting, or as Tesla calls is "Gigacasting"): it is mostly the result of investment, more specifically all other carmakers deciding they weren't willing to risk it, no matter how many papers said the simulations were correct. Tesla risked it, it worked exactly like the (mostly German made) theory and simulations said it was going to work, and now everyone and their mother (ie. even non-car companies) are using it. Result: Tesla has a patent on it, that nobody has licensed since they were working on it decades before the first Tesla engineer thought of it. The idea was literally available in CAD software before Tesla started to work on it (not that I want to claim there wasn't a LOT of design + validation + testing + integrating + ... work left to be done) This principle is generally true for all Elon Musk companies, and most of their accomplishments/vision. SpaceX is not even close to the first to land a rocket, for example (that was McDonnel-Douglas). Nor were they the second, or the fifth. Oh and only one of the companies that attempted it before SpaceX needed 2 tries, all others succeeded immediately, or the company died, some succeeded, and the company still died. SpaceX, by contrast, needed 7 crashes before succeeding for the first time (one of their rockets never tried to land on account of blowing up during ascent, I'm counting that one), and 17 tries before they first tried to move it to production. I'm not to say integrating everything, massively expanding the scope/scale of these applications, getting the investments, and getting it commercially operating isn't a gigantic accomplishment, but it is not inventing it at all. Elon Musk's constant talk about inventing and "work from first principles" ... is therefore kind of total bullshit. He has never done that, and neither have his businesses. | ||