There is a shortage, they are short lived assets. It's a blip and unrelated to their long term profitability and valuation. They can't make a long lived business of building and renting out compute at those margins.
It was definitely a smart business move. It should be troubling to any shareholder than xAI is unable to utilize this infrastructure as renting it out to competitors.
T1 companies have longer depreciation cycles, they have customers that will use the dated hw for non-frontier work. They can make the capex more justifiable and have flexibility to be more creative about its use. A frontier lab really needs the best hw available at full capacity.
Respectfully, I tend to think of tier 1 data centers as someone I'm paying for colocation services and the value they provide is power infrastructure and redundancy, network infrastructure and redundancy, cooling, and physical security.
The shortage I referred to is in GPUs, that's what really being rented here.
Even if GPUs lasted forever, they're are a depreciating asset because they become obsolete with improvements over generations.
GPUs do not last forever, either. I've read here, and heard from others, that they aren't even living up to their 5 year depreciation schedules under production load, closer to 2-3 years.
I use AI all the time. I hope AI isn't short lived. It might be if they can't figure this shit out, or if IPOs like spacex poison public opinion against them first.
> GPUs do not last forever, either. I've read here, and heard from others, that they aren't even living up to their 5 year depreciation schedules under production load, closer to 2-3 years
People said this about GPUs during the crypto mining craze and were wrong back then too. While I can’t speak for the entire industry I can say my personal experience follows any normal intuition over solid state electronics.
Some early failures in the bathtub curve, and then you start seeing fans, heat paste, and board capacitors fail far before you start seeing any chip failures at scale.
Sure you can abuse anything you want to burn it out, but I doubt that’s what’s happening inside these facilities.
xAI is more than half of SpaceX revenue with the Google sublease. SpaceX is looking like a datacenter REIT.
Moreover they're leasing compute - the actual infra around it is much less important - and how long does anyone expect heavily utilized GPUs to run? How likely is SpaceX to be able to re-lease this compute capacity? It will be broken down or out of date in 2-3 years.
This should be essentially ignored in the long term for SpaceX business prospects, and is low margin business that barely justifies a 10x earnings multiple let along a 100 revenue multiple for the xAI unit.
It's funnier because it's old, failed policy that they are recycling without being aware of it because they are ignorant. All old things really do become new again.
It's the current set of policy that is failing. All literacy and math score are down across the entire country and theyve been going down for the past 10 years.
The decline is across demographics, across geographies, and correlated with an increase young mental health issues.
The answer is staring us in the face, quite literally, as we type this. We put a cheating and dopamine producing machine in the hands of children without any regulations. Of course it is harming their academic performance.
Ask a football coach if there kids are going to play tackle football and you'll be surprised how often you they won't let them. Ask an educator or psychologist at what age they give smart devices to their kids, and I'd guess it is 3-4 years above the median.
The policy doesn't matter when we're actively damaging the brains of children, which are not fully developed.
There are people who see massive business opportunities for enriching themselves in privatizing the education system. Some of there points are reasonable, and sometimes they are frauds. Either way, they lobby hard and have a lot of generally Republican politicians in their pockets.
Also, teacher pay is terrible in comparison to the job stress and - reasonably and expected - educational requirements.
The education system is trying to deal with a probably that is out of their control, the increasing wealth stratification in the US, while fending off adversaries that with both good and bad intentioned reasons are trying to undermine the institutions of public education.
At the same time, we have a totally new societal threat in social media. If you haven't read "Careless People", read it. You seem societies around the world locking social media away from kids on the advice of professional groups of educators, pediatricians, and psychologists. There are hordes of irresponsible and negligent parents whose kids are barely functional, and working their way through the educational pipeline.
There is no easy fix here that anyone is missing. In a democracy, this is an existential national crisis, as we are all seeing in real time.
edit: don't ask me who is working on this. It just tells me you are unserious and just complaining. Try google. Hundreds of thousands of people are working on this. Please elaborate on your disagreement with teachers groups (NEA, AFT), the prior administration (American Rescue Plan), or the current administration (ECCA). Or disagreements with AmeriCorps or NPSS as private volunteer service groups groups. Or disagreements with private education advocates (CAPE, NAIS). You may not like all the administrators and principals and teachers as individuals working on it in the system, or PTA organizations outside the system. I could go on all day. But these people are all seriously concerned about the problem, even though they may disagree in areas - you are not special in awareness of this issue.
Who's working on this? I think there are some pretty obvious easy fixes, at least for California:
Find a library that still has a copy of the educational plan California used back in the 1970's, and do that.
At the time, we had the best schools in the country. The state is much richer and has much higher income/sales tax rates now than it did back then. I think that should more than make up for the Prop 13 funding disaster, though it might mean moving some cash around in the state budget.
> copy [the] educational plan California used back in the 1970's
I think that would go a long way.
> more than make up for the Prop 13 funding disaster
Wrong funding disaster. The real funding disaster is Prop 98, which mandates a certain amount of K-12 spending according to "the level of funding in 1986-87, General Fund revenues, per capita personal income, and school attendance". [0]
Specifically, "[...] [T]he Guarantee is in a Test 1 for all years 2024-25 through 2026-27. This means that the funding level of the Guarantee in these years is equal to roughly 40 percent of General Fund revenues, plus local property tax revenues. Pursuant to the Proposition 98 formula, this percentage of General Fund revenues is not reduced to reflect enrollment adjustments, which further increases per pupil funding." [0]
Additionally, both property tax revenues (affected by Prop 13) and general fund revenues are used to fund the LCFF[1], which is big on "equity" and gives schools with high ESL and generally disadvantaged students significantly more funds. It also guarantees funding growth with COLA and population growth adjustments.
Finally, on top of all that mandatory funding, we're spending discretionary funds to more than double outlays on special education vs. FY18-19[0]--which is claimed to be an investment in student outcomes. And discretionary funds for professional development. And discretionary funds to pay staff 14 weeks pregnancy leave. And discretionary funds to give LCFF a nearly doubled "super COLA".
The state doesn't have a funding problem, it has a spending problem. And the result of this unchecked spending growth is that mandatory Prop 98 spending alone is now a record $127.1B vs $59B in 2013-14 and $78.5B in 2018-19[2]--despite a ~7% enrollment decline over that period[3]. Meanwhile outcomes have plummeted.
The education administration mafia has the state over a barrel. Yet somehow most Californians believe that education is underfunded, usually with a dash of "something something Prop 13". But actually the problem is closer to a resource curse. With ever-growing guaranteed slices of the budget and discretionary sweeteners up the wazoo, who needs to actually teach kids?
Do you know how much hard power credibility the US has lost from the Iran War failure?
The US couldn't defend our bases in the area or our newly less enthusiastic regional allies. It couldn't keep the Hormuz open. The US wasted years worth of advanced munitions inventory defending against relatively cheap missiles.
The US couldn't annex Canada if it wanted to. Canada doesn't even need a military to destroy the US via assymetric tactics.
"US couldn't annex Canada if it wanted to" - Truly, the state of our military is shockingly bad. The US Marines could annex Canada, and I honestly mean that.
I do agree that the US military's perceived preeminence has taken a big blow, but what you're saying is just outrageously false.
I do not think they could. It is not just a matter of seizing something as much as holding it, as everyone has plainly seen in Ukraine, or post-occupation Iraq or Afghanistan.
Neither of those latter countries had a large shared land border with the US and ethnically similar populations that would make it easy to attack unhardened infrastructure.
I think there's a few things going on here:
- surveys are just bad, you have a selection bias right off the bat, especially from an outfit like the globe and mail
- the idea is that an invasion would be overwhelming and futile to resist. Russia is not going to invade Canada. I think the assumption would be it'd be China (also very unrealistic) or the USA (this used to be unrealistic).
Given an unavoidable end result, I can kind of understand the idea that you wouldn't want to die for that. Plus there's the idea it'd be a soft invasion, where life would be good after. If Canadians had to fight for their actual lives, I would hope you'd see a bit more resistance. But that's the issue when you have a barely functional military, you can't just make one overnight.
There's already a good number of folks who would like a US annexation (in theory at least), as you allude to.
The cultural aspects are a little more complicated than what you describe, but I'll leave that.
The oil industry is dying and we are destroying the planet and a delicate ecosystem to harvest non-renewable energy. It should stay in the ground and be saved for future generations for an emergency, not to just power grossly oversized vehicles and social media content generation to manipulate people into buying things.
This is history in the making. We're living in an evil time - bad people are stealing from humanity, using conflict to distract, and acquiring personal power out of greed. This will be one of the greatest moments in the papacy, and I expect if there are people around to read it, it will be talked about in a thousand years.
You're finding somethere where nothing exists on the basis of semantics. Donald Trump is not a populist and he stated economic policy is simply "stated". Society just has become so trusting that someone can go about bald-faced lying about their beliefs and actions, while doing the opposite, without consequence.
Donald Trump and Bernie Sanders are on polar opposite ends of ideologies.
Bernie Sanders has a lifetime record of integrity, working to fairly distribute wealth, and good and transparent governance.
Donald Trump has a lifetime record of bankruptcies, fraud convictions, lying about his policies for the working while governing for the richest people, using government to enrich himself, and using government to hide his misdeeds and shield himself and his business partners from accountability. Donald Trump says he is many things he is not, and simply believing the words that come out of his mouth is being gullible.
There's a matter of debate as to what populism is. And on both ends of that debate are Trump and Sanders.
Sanders is the archetype of an ideological populist, related to socialism, and he believes in governing for the popular good, it is why he is an independent. He's a throwback to early 20th century social programs. It is relatively noble and good. He wants fair redistribution of wealth. He wants to remove wealth's influence from the democratic process. He has a lifetime of track record and governance as proof.
Trump is the archetype of the "thin center" populist. He has no real driving philosophy of governance, and demagogues under the banner of populism. He panders to the religious right even though he can't name a book of the Bible. He panders to the nationalists and bigots. He panders to patriots. And he sets up his opposition, regardless of truth, as the opposite of those things.
edit: we're just talking past each other. Bernie Sanders is a left wing populist. Ron Paul is a right wing populist. Massie is a right wing populist. My point is that Trump is simply a fake populist. He says populist things and doesn't believe or act on them for the most part. He's simply a kleptocrat with autocratic tendencies.
I think you're right. People have been fooled into thinking he's a populist. He uses some populist trappings but look, for example, what he's done about Epstein: he's running interference for billionaires, contradicting what he promised to do. His bombing of Iran is not populist, either.
No, there isn't really much debate, but definitely a lot of debate between left wing and right wing populism, which seems to be what you are stuck on.
It seems like I'm trying to tell you he is a populist, and you are trying to tell me his a bad person/bad leader. Which is true, but orthogonal to populism.
But if it helps, in my original comment I laid out many of Trump's populist policies. Ironically many of these are shared with Bernie, or if they had originated with Bernie, would have been celebrated.
Remember many Bernie bros went to trump in 2016, because Hilary's list of policies looks nothing like the one I laid out above.
It was definitely a smart business move. It should be troubling to any shareholder than xAI is unable to utilize this infrastructure as renting it out to competitors.
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