I think that's the datacenter with the gas turbine generators that operate without permits because they're "portable." Data centers have tremendous externalities but colossus is a particularly nasty offender, and not just due its size.
The newer location is about 3 miles southwest of the Memphis Airport (MEM), one of the world’s largest cargo airports and the center of FedEx operations (500 take-off and landings per day most concentrated in a 6 h FedEx window with lots of engines running on ramps and that produces about 2000 tons of NOx per year).
I live about 18 miles downwind of the new Colossus sites, the airport, and lots of truck logistics sites, and a large refinery.
I definitely will be getting 2x exposure to ozone and particulates from both Colossi when they are running full bore. Plus an extra dose of ultrafine particulate with my morning fresh air.
Yes, wouldn’t it be nice to be in Nashville instead with HCA, Oracle, many insurance and financial institutions, and the joy of country music.
As an avid Opus user I am in an ethical Nimby bind. We do need almost any investments we can get in Shelby County TN. I’ll take Anthropic in preference to Grok NOx. And it will be my NOx.
xAI’s turbines produce meaningful local/regional pollution (especially NOx in a vulnerable area) but represent a rounding error nationally and globally.
> xAI’s turbines produce meaningful local/regional pollution (especially NOx in a vulnerable area) but represent a rounding error nationally and globally.
If you shoot someone in the face, it will produce a meaningful increase in local/regional murder, but represent a rounding error nationally and globally.
Seems like selc's time would be better spent trying to close the loophole that allows for unpermitted turbine generators instead of going after one company for doing what they were allowed to do when they did it.
I dont know, Id say the enraging thing is that the government is so incompetent and unable to expand electricity supply that datacenters are forced into using loopholes to get power the only way they can.
> Id say the enraging thing is that the government is so incompetent and unable to expand electricity supply
So let's say you're a homebuilder, if I tell you I want a new home and I want to live there tomorrow, you can all of a sudden build it in a day, right?
Electricity use is skyrocketing for various reasons, these datacenters being one of them. There are a lot of countries struggling to keep up with demand. So incompetence? No, probably more like supply lagging demand.
Or ASML and Nvidia and all also are incompetent, because they didn't see demand coming....
Have you considered that the march of progress requires human blood to grease the gears and mulched skulls to pave the (highly efficient) road? Really, when you take into account all of the future lives this will improve and save it's difficult to claim any cost now is too high. Would you stand in their way and delay the day that Mythos cures cancer?
I wonder what percentage of GDP expenditure will give us SkyNet.
Undoubtedly, it will find cures to all cancers… The ARR and stock appreciation will be amazing. Except the cures will be found long after it has wiped out all humans.
I'm not saying human blood and mulched skulls are a renewable source of power, I'm just saying. Or maybe they can partner with SoulCycle to power computation with 24/7 spin classes?
What's the tremendous externality of gas generators? People heat their own homes with natural gas and it's no big deal. How can a datacenter that is miles away be worse than that?
More signs that xAI might be giving up on the AGI race. xAI let Cursor train a model on Colossus 2, gave the entire Colossus1 to Anthropic, and is now giving compute in Colossus2 to Anthropic as well.
Bad read on the situation. xAI has too much compute and not enough customers using it. They have around half a million GPUs, some of which are stolen from Tesla, running at 11% utilization. xAI predicted more people would be using Grok, but Grok is not a SOTA model & users primarily want to use SOTA models. They have excess capacity and it makes sense to rent out GPUs to other customers while they improve their models.
More people should try Grok. I don't use it for coding but it's replaced a lot of my ChatGPT usage. Definitely more perferred model for quick questions or easy answers.
Elon lost his lawsuit with openAI and knows xAI isn't on the same trajectory. Might as well try to win the bet and flip off Sam by supporting the best competition. Also they are getting a head start on AI as a commodity. I'm sure there's plenty of money to be made for those that can leverage their capital to essentially rent capacity right now. If he's not making enough off of grok, might as well cover their expenses.
How come a company like Anthropic has invested in photonic computing? If it's good enough for Boeing, I'd assume they would at least invest in it. qc-LPU100 seems worth it for some matrix mult, if it can be proven its O(n) (at least less than O(n^3).
That's very doubtful given recent news that Colossus is running at 11% capacity and has hundreds of thousands of idle GPUs. xAI acquired too many GPUs and currently doesn't have enough customers to use them. That's why they are making compute deals with Anthropic and Cursor.
xAI is bleeding money and this compute deal with Anthropic will pay for all of xAI's capex ($25 billion) in 2 years.
That's Intel. Probably IBM too, though they've been doing mass manufacturing with TSMC (and GloFo before) for years instead of their fabs. I wouldn't be surprised if HP did similar things back in the 80s.
What do you mean by etching? Google does also it's own chip design with TPUs, data centers, and models but afaik only TSMC Intel and Samsung do the actual semiconductor fabrication
Here's a probably stupid question - if someone were unbounded by ethics and conceivably had enough power and connections to power to shield themselves from many consequences of their actions - and that person owned these DCs, could they in theory observe all the streams of tokens coming in and out of these models, and even exfiltrate copies of these models wholesale to have their own teams do what they will with them in the pursuit of building their own competitive models?
Or is there something fundamental in the way these models get deployed (encryption or something or than legal contracts?) at this scale that prohibits the owners of the infra from gaining this level of insight / access?
1) The situation you described would be covered under the contract between Anthropic and xAI, and that any violation of that would be subject to financial penalties and legal proceedings. The US has a robust corporate legal system, and disputes do get resolved through the court system, although in a slow and costly manner.
The contract can stipulate a penalty at a high enough amount to discourage this behavior.
2) Output from models & intra-datacenter communications can be encrypted if customers truly cared.
3) There is no reason do this, because there are far better ways to exfiltrate data from Anthropic models. Chinese companies are already doing this at an industrial scale where they are reselling Claude tokens for 10-20% of the cost while retaining the data to train their own models. https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...
If we look at Deepseek V4-pro, created by Deepseek who Anthropic formally accused of harvesting Claude tokens at scale, it performs the same as Claude did 6 months prior.
xAI had a lot of negotiating power here because Anthropic had ~0 comparable options and ultimately desperately needed the compute now. So, it wouldn't surprise me if data sharing was an explicit part of the agreement
There's accusations that the Chinese labs have done essentially that to OpenAI and Anthropic and exfiltrated their models without having DC access, so if you had DC access, yes, you could do that. If you had DC access though you could just copy the model onto an SSD.
Why is xAI giving up their advantage? Is this a signal that their frontier model improvements are plateauing and decided there is no value in hoarding all their compute?
Elon got rid of most of the core xAI researchers recently. It looked like firings and he said something like Grok needs to be rewritten because it was fundamentally built in a bad way. My guess - Grok was not one of the top two models and had no traction beyond users on Twitter - so investing in it did not make sense. Or maybe he needs time to build a new team and rebuild Grok, and while he’s doing that, he needs revenue to make up for all the GPUs they bought.
Either way, I doubt he has any ‘real’ advantage in this game. It’s OpenAI and Anthropic, and then everyone else including the open weight models.
What advantage? Has there ever been any indication they’re leading in any segment? Sure Elon has thrown a bunch of money at hardware, but to what end?
And frankly as bad as Altman is from a: if AI is really going to disrupt humanity do I want this guy in charge? Elon is 10x worse. So why would the best and the brightest ever work for him?
yes, but it's only advantage if one is compute-strained and the other isn't. if they both have lots then there's no advantage. if one doesn't fully utilise their compute then it's not an advantage either
Well, other than your ability to turn that into cash by renting it out for the highest price to someone who needs it, you can promise prospective employees that are supposed to use that infra to train models that they won’t be compute starved.
You can kick off more model training runs and experiments than your competitors.
You can kick off a $1-2t IPO claiming you are going to capture a large portion of the largest TAM the world has ever seen.
They have neither the most resources nor the best models. They are mediocre at everything except the CSAM generation market, they've got that one cornered
I see this as a huge warning sign. If a frontier ai lab is in this position of renting their own capacity, imagine how much overcapacity there is in the system.
Outside of VC money, and circular financing, the only external money coming into ai are into open-ai, and anthropic via their subscriptions and APIs.
They were briefly SOTA on some benchmarks, although there were suggestions there might have been some massaging of the results since real world usage showed lackluster performance compared to the benchmarks.
I don't see a scenario where it really makes sense to be a frontier lab long term. Eventually model quality will plateau then you distill and get 90% for 10% or less cost.
General AI is that scenario. The investor dream is that their horse hits general AI first, patents it (or otherwise somehow stops the competition from hitting it), and then reaps the massive benefits.
I'm not saying it's a likely scenario, but I genuinely believe a big percentage of AI investment revolves around that (or similar) scenarios.
Opus and GPT are so different there’s room for both and I wouldn’t be ignoring Gemini even if it isn’t ahem great at coding, since it’s quite obviously very good otherwise.
In the times before you also would rather have very smart people working together instead of one very smart dude alone even if he had an identical twin.
This might come down to when you expect plateau to happen. You could have said similar about transistor density many decades ago.
(I'm not denying it could happen next year for all we know. But we simply don't know, and from what I hear from researchers the breadth of ideas we've tried are still small)
Grok’s whole thing is being irresponsible and edgy. Can’t s ee Anthropic going for that, can’t see Grok’s customer base accepting an AI that refuses to do nonconsensual porn.
Fake __AI__ revenue. Maybe Hetzner should build Colossus4, rent it out and book it as AI revenue instead of hardware rental revenue and get a P/E of 100.
Anthropic this quarter will have revenue of $10.9B, up from $4.8B last quarter[0]. They're paying SpaceX $1.25B per month for compute[1] - which is more than what SpaceX earn on space. SpaceX spent about $30-40B in capex on Colossus 1 & 2.
This is all real revenue, real spend, real usage.
Hetzner just aren't at this scale. Not even close. If they wanted to get into this business - first, they're late. Second, it's at a scale of ~10x of their total lifetime datacenter buildout. Third, they'd need to change their business to being one that is debt fronted.
xAI have proven out that being able to deploy compute is a very viable business (and difficult to pull off)
At some point AI cynicism clashes with reality, it must be exhausting maintaining it.
Anthropic’s revenue is computed different from OpenAI. As I recall, they inflate it by including money that they end up just paying forward to some of the companies they depend on. OpenAI doesn’t count that component. And none of these companies - including SpaceX - have trustworthy accounting.
Jesus Christ, the Hetzner example is obviously an example of booking revenue as AI revenue (where investors assume it is generated by Grok subscriptions) vs. hardware rental revenue, which traditionally not valued as highly.
Nowhere does the hypothetical state that Hetzner, an example for hardware rental, has the funding or the capabilities to execute the sarcastic example.
But ok, now hardware rentals have a P/E of 100 or more.
Investors aren’t dumb. These numbers are being reported and the fact that the data centers are being rented out is publicly disclosed everywhere. Investors know full well that the revenue is from the data center rental. No (non-retail) investor is going to see the jump in revenue and think “I better buy up because grok must be kicking ass!”
And yes, if hetzner built a massive AI hyper scale datacenter and rented it out for billions, with the expectation that they would keep building more, they would also see massive PE ratios because it’s expected that their revenue would be going up.
You’re falling for the Musk shell game. He just says whatever is convenient at any given moment. FSD. Funding secured. I talked to the Claude guys.
He didn’t change his mind about anything. It’s just that he wants to prop up SpaceX’s IPO as much as he can. Plus if he hits various targets, he unlocks more shares for himself, I think.
I think that's the datacenter with the gas turbine generators that operate without permits because they're "portable." Data centers have tremendous externalities but colossus is a particularly nasty offender, and not just due its size.
Edit: They did it with Colossus and now they're doing the exact same thing with Colossus2. https://www.selc.org/news/xai-built-an-illegal-power-plant-t...
The newer location is about 3 miles southwest of the Memphis Airport (MEM), one of the world’s largest cargo airports and the center of FedEx operations (500 take-off and landings per day most concentrated in a 6 h FedEx window with lots of engines running on ramps and that produces about 2000 tons of NOx per year).
I live about 18 miles downwind of the new Colossus sites, the airport, and lots of truck logistics sites, and a large refinery.
I definitely will be getting 2x exposure to ozone and particulates from both Colossi when they are running full bore. Plus an extra dose of ultrafine particulate with my morning fresh air.
Yes, wouldn’t it be nice to be in Nashville instead with HCA, Oracle, many insurance and financial institutions, and the joy of country music.
As an avid Opus user I am in an ethical Nimby bind. We do need almost any investments we can get in Shelby County TN. I’ll take Anthropic in preference to Grok NOx. And it will be my NOx.
[delayed]
Your math is way wrong. The airport is and will be far, far worse. You didn't even mention all of the lead
there is no lead in jet fuel.
i would expect close to no 100LL burning planes use MEM.
What was the specific mathematical or factual error? It is not theoretical for me.
xAI’s turbines produce meaningful local/regional pollution (especially NOx in a vulnerable area) but represent a rounding error nationally and globally.
> xAI’s turbines produce meaningful local/regional pollution (especially NOx in a vulnerable area) but represent a rounding error nationally and globally.
If you shoot someone in the face, it will produce a meaningful increase in local/regional murder, but represent a rounding error nationally and globally.
Seems like selc's time would be better spent trying to close the loophole that allows for unpermitted turbine generators instead of going after one company for doing what they were allowed to do when they did it.
I dug into this topic in some detail on my blog and it's both enraging and depressing.
https://poiesic.com/posts/pattern-recognition
This is a really great watch from Benn Jordan on the topic https://www.youtube.com/watch?v=_bP80DEAbuo
Some wild things happening with those, and infrasound. Colossus is shown 4 mins in
This was debunked: https://blog.andymasley.com/p/contra-benn-jordan-data-center...
The debunk is extremely sketchy on many points.
https://www.bearlythinking.com/p/andy-masley-doesnt-understa...
I dont know, Id say the enraging thing is that the government is so incompetent and unable to expand electricity supply that datacenters are forced into using loopholes to get power the only way they can.
> Id say the enraging thing is that the government is so incompetent and unable to expand electricity supply
So let's say you're a homebuilder, if I tell you I want a new home and I want to live there tomorrow, you can all of a sudden build it in a day, right?
Electricity use is skyrocketing for various reasons, these datacenters being one of them. There are a lot of countries struggling to keep up with demand. So incompetence? No, probably more like supply lagging demand.
Or ASML and Nvidia and all also are incompetent, because they didn't see demand coming....
If only there was some sort of planning, by a central authority!
Yup, and now Anthropic is complicit in the environmental damage and health problems for local residents that these data centers are causing.
But hey, number must go up, right?
Have you considered that the march of progress requires human blood to grease the gears and mulched skulls to pave the (highly efficient) road? Really, when you take into account all of the future lives this will improve and save it's difficult to claim any cost now is too high. Would you stand in their way and delay the day that Mythos cures cancer?
This is a joke. Read it in a mocking tone.
https://www.newyorker.com/cartoon/a16995
I wonder what percentage of GDP expenditure will give us SkyNet.
Undoubtedly, it will find cures to all cancers… The ARR and stock appreciation will be amazing. Except the cures will be found long after it has wiped out all humans.
Wiping out all humans _is_ the cure.
Not Anthropic, but Sam Altman - AI will solve climate change and cure all diseases.
AI is the new religion, and one needs to be stupid to believe it.
Already so many people are treating it as a higher being, believing whatever that comes out of it
That implies you don't need to be stupid to believe the other ones.
I'm not saying human blood and mulched skulls are a renewable source of power, I'm just saying. Or maybe they can partner with SoulCycle to power computation with 24/7 spin classes?
And people called the matrix’s human batteries far-fetched.
Always felt like it would've made more sense if it was using part of the peoples' brains to do their computation, as super energy efficient computers.
I believe that was in the original script, and rewritten after some exec didn't understand how brains could be computers.
Per sanguinem ad astra
I loled
When do we start building pyramids and doing the Sardaukar blood letting ritual?
When the 10-year yield hits 6%. Basic macroeconomics.
Some of you may die, but it’s a sacrifice that I am willing to make.
A superintelligent AI will be safe though, because it learnt its morality from us.
Doesnt AI learning its morality from humans makes it unsafe, I mean just look at some cases, humans dont exactly always have good morals
Do you think Boris cares about people getting cancer and dying from these data centers? No, he cares about becoming rich as fuck.
This is simply called disruption. They really don't care.
Given how much our EPA has been gutted by the current administration, I don’t think relief is very likely.
So much for Dario’s ethics. He happily partners with Elon. He seems like just another power hungry monopoly seeking liar.
What's the tremendous externality of gas generators? People heat their own homes with natural gas and it's no big deal. How can a datacenter that is miles away be worse than that?
How can something that is a million times bigger than your home be any different, right?
The gas furnace in my basement don't have a massive jet turbine emiting high frequency noise
I wouldn't call noise pollution a "tremendous externality". The gas turbines should just be placed far enough from where people live.
More signs that xAI might be giving up on the AGI race. xAI let Cursor train a model on Colossus 2, gave the entire Colossus1 to Anthropic, and is now giving compute in Colossus2 to Anthropic as well.
Bad read on the situation. xAI has too much compute and not enough customers using it. They have around half a million GPUs, some of which are stolen from Tesla, running at 11% utilization. xAI predicted more people would be using Grok, but Grok is not a SOTA model & users primarily want to use SOTA models. They have excess capacity and it makes sense to rent out GPUs to other customers while they improve their models.
Grok is also tuned to align with Musk's personal beliefs. I wouldn't touch it with a 10 foot pole.
It is a race that has a flywheel effect.
Once xAI training team “fix” their model, where will Anthropic be then?
More people should try Grok. I don't use it for coding but it's replaced a lot of my ChatGPT usage. Definitely more perferred model for quick questions or easy answers.
It's not stolen if it was taken from Tesla, investors already agreed that Elon can do anything he pleases with their money.
Elon lost his lawsuit with openAI and knows xAI isn't on the same trajectory. Might as well try to win the bet and flip off Sam by supporting the best competition. Also they are getting a head start on AI as a commodity. I'm sure there's plenty of money to be made for those that can leverage their capital to essentially rent capacity right now. If he's not making enough off of grok, might as well cover their expenses.
FWIW, SpaceX (parent company of xAI) has an option to acquire Cursor for $60B that expires 7 days after their imminent IPO.
Do people still use Cursor? My company’s leadership has been clear that Cursor was cool for a hot minute but you Should Not be using it anymore
It was kinda obvious when SpaceX "acquired" it. Elon rewarded xAI investors/prevented lawsuits by giving them SpaceX equity, and that was that.
xAI might acquire Cursor. They are in the process of training new coding models and probably a new Grok.
Until they finish training, it makes sense to rent the excess capacity.
How come a company like Anthropic has invested in photonic computing? If it's good enough for Boeing, I'd assume they would at least invest in it. qc-LPU100 seems worth it for some matrix mult, if it can be proven its O(n) (at least less than O(n^3).
I use Claude daily but I do not want that my spend is going towards Elon.
Very possible Elon is doing this to make give Anthropic better chances against OAI while he attempts to reshape xAI.
Also possible he sees infra as the future of xAI if he really believes in the value of space compute.
Hard to see this any of this as anything other than a bearish sign for Grok though.
That's very doubtful given recent news that Colossus is running at 11% capacity and has hundreds of thousands of idle GPUs. xAI acquired too many GPUs and currently doesn't have enough customers to use them. That's why they are making compute deals with Anthropic and Cursor.
xAI is bleeding money and this compute deal with Anthropic will pay for all of xAI's capex ($25 billion) in 2 years.
Right, also Anthropic has been having difficult time getting more GPUs
We could see the first company vertically integrated from etching to chip to data center
That's Intel. Probably IBM too, though they've been doing mass manufacturing with TSMC (and GloFo before) for years instead of their fabs. I wouldn't be surprised if HP did similar things back in the 80s.
What do you mean by etching? Google does also it's own chip design with TPUs, data centers, and models but afaik only TSMC Intel and Samsung do the actual semiconductor fabrication
Assume he's referring to SpaceX's https://en.wikipedia.org/wiki/Terafab
Here's a probably stupid question - if someone were unbounded by ethics and conceivably had enough power and connections to power to shield themselves from many consequences of their actions - and that person owned these DCs, could they in theory observe all the streams of tokens coming in and out of these models, and even exfiltrate copies of these models wholesale to have their own teams do what they will with them in the pursuit of building their own competitive models?
Or is there something fundamental in the way these models get deployed (encryption or something or than legal contracts?) at this scale that prohibits the owners of the infra from gaining this level of insight / access?
1) The situation you described would be covered under the contract between Anthropic and xAI, and that any violation of that would be subject to financial penalties and legal proceedings. The US has a robust corporate legal system, and disputes do get resolved through the court system, although in a slow and costly manner.
The contract can stipulate a penalty at a high enough amount to discourage this behavior.
2) Output from models & intra-datacenter communications can be encrypted if customers truly cared.
3) There is no reason do this, because there are far better ways to exfiltrate data from Anthropic models. Chinese companies are already doing this at an industrial scale where they are reselling Claude tokens for 10-20% of the cost while retaining the data to train their own models. https://www.chinatalk.media/p/how-to-buy-cheap-claude-tokens...
If we look at Deepseek V4-pro, created by Deepseek who Anthropic formally accused of harvesting Claude tokens at scale, it performs the same as Claude did 6 months prior.
I guess there's a reason why those Chinese companies are in china
What prevents a data center operator from reading your chats? [FEATURE] Provide a way to select your data center #56916 https://github.com/anthropics/claude-code/issues/56916
xAI had a lot of negotiating power here because Anthropic had ~0 comparable options and ultimately desperately needed the compute now. So, it wouldn't surprise me if data sharing was an explicit part of the agreement
There's accusations that the Chinese labs have done essentially that to OpenAI and Anthropic and exfiltrated their models without having DC access, so if you had DC access, yes, you could do that. If you had DC access though you could just copy the model onto an SSD.
Why is xAI giving up their advantage? Is this a signal that their frontier model improvements are plateauing and decided there is no value in hoarding all their compute?
I would guess it's purely because Grok isn't nearly in-demand enough to produce meaningful revenue. And they want to juice the numbers for IPO
And I'm sure it's a bonus point for Musk that it goes to OpenAI's most relevant competitor
As weird as it seems I think this is Musk’s best shot at winning over Altman. He has personal vendetta.
Elon got rid of most of the core xAI researchers recently. It looked like firings and he said something like Grok needs to be rewritten because it was fundamentally built in a bad way. My guess - Grok was not one of the top two models and had no traction beyond users on Twitter - so investing in it did not make sense. Or maybe he needs time to build a new team and rebuild Grok, and while he’s doing that, he needs revenue to make up for all the GPUs they bought.
Either way, I doubt he has any ‘real’ advantage in this game. It’s OpenAI and Anthropic, and then everyone else including the open weight models.
What advantage? Has there ever been any indication they’re leading in any segment? Sure Elon has thrown a bunch of money at hardware, but to what end?
And frankly as bad as Altman is from a: if AI is really going to disrupt humanity do I want this guy in charge? Elon is 10x worse. So why would the best and the brightest ever work for him?
No other LLM has made as much child porn as grok so there is that...
In a compute starved world, big ass data centers are an advantage.
yes, but it's only advantage if one is compute-strained and the other isn't. if they both have lots then there's no advantage. if one doesn't fully utilise their compute then it's not an advantage either
Well, it appears all their competitors are compute starved so…
can you elucidate what that advantage is, that isnt renting it out for the highest price to somebody that really needs it?
Well, other than your ability to turn that into cash by renting it out for the highest price to someone who needs it, you can promise prospective employees that are supposed to use that infra to train models that they won’t be compute starved.
You can kick off more model training runs and experiments than your competitors.
You can kick off a $1-2t IPO claiming you are going to capture a large portion of the largest TAM the world has ever seen.
They have neither the most resources nor the best models. They are mediocre at everything except the CSAM generation market, they've got that one cornered
Training a model that is larger than your competitor's.
The datacenter advantage, obviously
When did xAI have an advantage?
Advantage in training compute.
I think they overestimated the demand for Grok, which is mostly useless, and now they have too much compute on hand.
I see this as a huge warning sign. If a frontier ai lab is in this position of renting their own capacity, imagine how much overcapacity there is in the system.
Outside of VC money, and circular financing, the only external money coming into ai are into open-ai, and anthropic via their subscriptions and APIs.
> a frontier ai lab
Wait, do people consider xAI a frontier AI lab?
They were briefly SOTA on some benchmarks, although there were suggestions there might have been some massaging of the results since real world usage showed lackluster performance compared to the benchmarks.
I don't see a scenario where it really makes sense to be a frontier lab long term. Eventually model quality will plateau then you distill and get 90% for 10% or less cost.
General AI is that scenario. The investor dream is that their horse hits general AI first, patents it (or otherwise somehow stops the competition from hitting it), and then reaps the massive benefits.
I'm not saying it's a likely scenario, but I genuinely believe a big percentage of AI investment revolves around that (or similar) scenarios.
Opus and GPT are so different there’s room for both and I wouldn’t be ignoring Gemini even if it isn’t ahem great at coding, since it’s quite obviously very good otherwise.
In the times before you also would rather have very smart people working together instead of one very smart dude alone even if he had an identical twin.
This might come down to when you expect plateau to happen. You could have said similar about transistor density many decades ago.
(I'm not denying it could happen next year for all we know. But we simply don't know, and from what I hear from researchers the breadth of ideas we've tried are still small)
Over the past 6 months, Anthropic has made more waves as a product company than a frontier lab.
Cant wait to see their books once they IPO
Sigh.
I’d hoped Anthropic would steer clear of blatantly unethical practices but here they go in bed with that guy and his horribly damaging data center.
https://x.com/nottombrown/status/2057194829986300375?s=20
Does an expansion of computing power on this scale imply that computing capital is displacing model architecture as the true moat in AI competition?
Seems like either Grok is being shut down or it will be "powered by anthropic" soon.
Grok’s whole thing is being irresponsible and edgy. Can’t s ee Anthropic going for that, can’t see Grok’s customer base accepting an AI that refuses to do nonconsensual porn.
Model fine-tunes to change the 'edgy' tone are very cheap and easy to do.
Grok could easily be powered by Claude in just a few weeks engineering time.
I predict SpaceX will subsume Anthropic at some point.
Musk said Anthropic Claude was woke DEI until he said it wasn't. It must be hard for Musk fans to keep up.
Related:
SpaceX S-1
https://news.ycombinator.com/item?id=48213933
Too bad Enron is still not around. They'd have some real fun with today's electrical markets.
I though Claude is too woke. Musk has posted that at least 50 times in the last year.
But booking outrageous rental fees as fake AI revenue ahead of the SpaceX IPO apparently takes precedence.
Anthropic is paying real cash, how is it fake revenue?
Fake __AI__ revenue. Maybe Hetzner should build Colossus4, rent it out and book it as AI revenue instead of hardware rental revenue and get a P/E of 100.
Anthropic this quarter will have revenue of $10.9B, up from $4.8B last quarter[0]. They're paying SpaceX $1.25B per month for compute[1] - which is more than what SpaceX earn on space. SpaceX spent about $30-40B in capex on Colossus 1 & 2.
This is all real revenue, real spend, real usage.
Hetzner just aren't at this scale. Not even close. If they wanted to get into this business - first, they're late. Second, it's at a scale of ~10x of their total lifetime datacenter buildout. Third, they'd need to change their business to being one that is debt fronted.
xAI have proven out that being able to deploy compute is a very viable business (and difficult to pull off)
At some point AI cynicism clashes with reality, it must be exhausting maintaining it.
[0] https://www.wsj.com/tech/ai/mind-blowing-growth-is-about-to-...
[1] https://www.wired.com/story/spacex-ipo-anthropic-compute-fin...
Anthropic’s revenue is computed different from OpenAI. As I recall, they inflate it by including money that they end up just paying forward to some of the companies they depend on. OpenAI doesn’t count that component. And none of these companies - including SpaceX - have trustworthy accounting.
Jesus Christ, the Hetzner example is obviously an example of booking revenue as AI revenue (where investors assume it is generated by Grok subscriptions) vs. hardware rental revenue, which traditionally not valued as highly.
Nowhere does the hypothetical state that Hetzner, an example for hardware rental, has the funding or the capabilities to execute the sarcastic example.
But ok, now hardware rentals have a P/E of 100 or more.
Investors aren’t dumb. These numbers are being reported and the fact that the data centers are being rented out is publicly disclosed everywhere. Investors know full well that the revenue is from the data center rental. No (non-retail) investor is going to see the jump in revenue and think “I better buy up because grok must be kicking ass!”
And yes, if hetzner built a massive AI hyper scale datacenter and rented it out for billions, with the expectation that they would keep building more, they would also see massive PE ratios because it’s expected that their revenue would be going up.
I think you're low at 100. TSLA has 370 PE, and SpaceX is targeting 250+.
If Hetzner could build that, they would.
He talked with the Anthropic team, and his concerns lessened. It's actually a good thing to be able to change one's mind.
You’re falling for the Musk shell game. He just says whatever is convenient at any given moment. FSD. Funding secured. I talked to the Claude guys.
He didn’t change his mind about anything. It’s just that he wants to prop up SpaceX’s IPO as much as he can. Plus if he hits various targets, he unlocks more shares for himself, I think.
The eternal truth: money talks, bullshit walks
Musk will buy Anthropic and fix the wokeness. It was done before.
Don’t put it past Dario to buy spaceX
Elon will never sell SpaceX. And he controls 86% of votes.
Anthropic is gross for this. The grandstanding about principles and values is intolerable.
Cool. Can they make Claude not absolute dogwater then?