5 ms·

Its very simple, xAI needs money to win the AI race, so best option is to attach to Elon’s moneybank (spacex) to get cash without dilution

ben_w 9mo ago
That may be the plan, but this is also a great way for GDPR's maximum fine, based on global revenue, to bite on SpaceX's much higher revenue. And without any real room for argument.
- deleted 9mo ago
  [deleted]
iknowstuff 9mo ago
Remember how he argued for Tesla’s Solarcity acquisition because solar roofs? Data centers in space are the same kind of justification imo.
- MobiusHorizons 9mo ago
  Solar roofs are much more practical to be honest.
  - darig 9mo ago
    [dead]
  - undersuit 9mo ago
    Putting solar roofs on a building? For a car company?
    - MobiusHorizons 9mo ago
      In comparison to datacenters in space yes. Solar roofs are already a profitable business, just not likely to be high growth. Datacenters in space are unlikely to ever make financial sense, and even if they did, they are very unlikely to show high growth due to continuing ongoing high capital expenses inherent in the model.
      - ben_w 9mo ago
        I think a better critique of space-based data centres is not that they never become high growth, it's just that when they do it implies the economy is radically different from the one we live in to the degree that all our current ideas about wealth and nations and ownership and morality and crime & punishment seem quaint and out-dated. The "put 500 to 1000 TW/year of AI satellites into deep space" for example, that's as far ahead of the entire planet Earth today as the entire planet Earth today is from specifically just Europe right after the fall of Rome. Multiplicatively, not additively. There's no reason to expect any current business (or nation, or any given asset) to survive that kind of transition intact.
    - mayoff 9mo ago
      For an electrification company.
    - rsynnott 9mo ago
      It's obviously a pretty weird thing for a car company to do, and is probably just a silly idea in general (it has little obvious benefit over normal solar panels, and is vastly more expensive and messy to install), but in principle it could at least work, FSOV work. The space datacenter thing is a nonsensical fantasy.
    - kuschku 9mo ago
      There's a synergy effect here - Tesla sells you a solar roof and car bundle, the roof comes without a battery (making it cheaper) and the car now gets a free recharge whenever you're home (making it cheaper in the long term). Of course that didn't work out with this specific acquisition, but overall it's at least a somewhat reasonable idea.
Findecanor 9mo ago
> win the AI race I keep seeing that term, but if it does not mean "AI arms race" or "AI surveillance race", what does it mean? Those are the only explanations that I have found, and neither is any race that I would like to see anyone win.
- strange_quark 9mo ago
  It’s a framing device to justify the money, the idea being the first company (to what?) will own the market.
- totetsu 9mo ago
  It’s a graft to keep people distracted and allow for positioning as we fall off the end of the fossil energy boom.
- ekidd 9mo ago
  A significant number of AI companies and investors are hoping to build a machine god. This is batshit insane, but I suppose it might be possible. Which wouldn't make it any more sane. But when they say, "Win the AI race," they mean, "Build the machine god first." Make of this what you will.
  - FeteCommuniste 9mo ago
    On the edge of my seat waiting to see what hits us first, a massive economic collapse when the hype runs out, or the Torment Nexus.
    - reverius42 9mo ago
      It really seems like the market has locked in on one of those two things being a guaranteed outcome at this point.
- bigstrat2003 9mo ago
  Big tech businesses are convinced that there must be some profitable business model for AI, and are undeterred by the fact that none has yet been found. They want to be the first to get there, raking in that sweet sweet money (even though there's no evidence yet that there is money to be made here). It's industry-wide FOMO, nothing more.
georgemcbay 9mo ago
> xAI needs money to win the AI race Off on a tangent here but I'd love for anyone to seriously explain how they believe the "AI race" is economically winnable in any meaningful way. Like what is the believed inflection point that changes us from the current situation (where all of the state-of-the-art models are roughly equal if you squint, and the open models are only like one release cycle behind) to one where someone achieves a clear advantage that won't be reproduced by everyone else in the "race" virtually immediately.
- CamperBob2 9mo ago
  They ultimately want to own everyone's business processes, is my guess. You can only jack up the subscription prices on coding models and chatbots by so much, as everyone has already noted... but if OpenAI runs your "smart" CRM and ERP flows, they can really tighten the screws.
  - adventured 9mo ago
    If you have the greatest coding agent under your thumb, eventually you orient it toward eating everything else instead of letting everybody else use your agent to build software & make money. Go forward ten years, it's highly likely GPT, Gemini, maybe Claude - they'll have consumed a very large amount of the software ecosystem. Why should MS Office exist at all as a separate piece of software? The various pieces of Office will be trivial for the GPT (etc) of ten years out to fully recreate & maintain internally for OpenAI. There's no scenario where they don't do what the platforms always do: eat the ecosystem, anything they can. If a platform can consume a thing that touches it, it will. Office? Dead. Box? Dead. DropBox? Dead. And so on. They'll move on anything that touches users (from productivity software to storage). You're not going to pay $20-$30 for GPT and then pay for DropBox too, OpenAI will just do an Amazon Prime maneuver and stack more onto what you get to try to kill everyone else. Google of course has a huge lead on this move already with their various prominent apps.
    - notahacker 9mo ago
      Dropbox is actually a great example of why this isn't likely to happen. Deeper pocketed competition with tons of cloud storage and the ability to build easy upload workflows (including directly into software with massive install base) exists, and showed an active interest in competing with them. Still doing OK Office's moat is much bigger (and its competition already free). "New vibe coded features every week" isn't an obvious reason for Office users to switch away from the platform their financial models and all their clients rely on to a new upstart software suite
danw1979 9mo ago
I’m not certain spacex is generating much cash right now ? Starship development is consuming billions. F9 & Starlink are probably profitable ? I’d say this is more shifting of the future burden of xAI to one of his companies he knows will be a hit stonk when it goes public, where enthusiasm is unlikely to be dampened by another massive cash drain on the books.

ben_w 9mo ago

That may be the plan, but this is also a great way for GDPR's maximum fine, based on global revenue, to bite on SpaceX's much higher revenue. And without any real room for argument.

deleted 9mo ago
[deleted]

iknowstuff 9mo ago

Remember how he argued for Tesla’s Solarcity acquisition because solar roofs? Data centers in space are the same kind of justification imo.

MobiusHorizons 9mo ago
Solar roofs are much more practical to be honest.
- darig 9mo ago
  [dead]
- undersuit 9mo ago
  Putting solar roofs on a building? For a car company?
  - MobiusHorizons 9mo ago
    In comparison to datacenters in space yes. Solar roofs are already a profitable business, just not likely to be high growth. Datacenters in space are unlikely to ever make financial sense, and even if they did, they are very unlikely to show high growth due to continuing ongoing high capital expenses inherent in the model.
    - ben_w 9mo ago
      I think a better critique of space-based data centres is not that they never become high growth, it's just that when they do it implies the economy is radically different from the one we live in to the degree that all our current ideas about wealth and nations and ownership and morality and crime & punishment seem quaint and out-dated. The "put 500 to 1000 TW/year of AI satellites into deep space" for example, that's as far ahead of the entire planet Earth today as the entire planet Earth today is from specifically just Europe right after the fall of Rome. Multiplicatively, not additively. There's no reason to expect any current business (or nation, or any given asset) to survive that kind of transition intact.
  - mayoff 9mo ago
    For an electrification company.
  - rsynnott 9mo ago
    It's obviously a pretty weird thing for a car company to do, and is probably just a silly idea in general (it has little obvious benefit over normal solar panels, and is vastly more expensive and messy to install), but in principle it could at least work, FSOV work. The space datacenter thing is a nonsensical fantasy.
  - kuschku 9mo ago
    There's a synergy effect here - Tesla sells you a solar roof and car bundle, the roof comes without a battery (making it cheaper) and the car now gets a free recharge whenever you're home (making it cheaper in the long term). Of course that didn't work out with this specific acquisition, but overall it's at least a somewhat reasonable idea.

Findecanor 9mo ago

> win the AI race I keep seeing that term, but if it does not mean "AI arms race" or "AI surveillance race", what does it mean? Those are the only explanations that I have found, and neither is any race that I would like to see anyone win.

strange_quark 9mo ago
It’s a framing device to justify the money, the idea being the first company (to what?) will own the market.
totetsu 9mo ago
It’s a graft to keep people distracted and allow for positioning as we fall off the end of the fossil energy boom.
ekidd 9mo ago
A significant number of AI companies and investors are hoping to build a machine god. This is batshit insane, but I suppose it might be possible. Which wouldn't make it any more sane. But when they say, "Win the AI race," they mean, "Build the machine god first." Make of this what you will.
- FeteCommuniste 9mo ago
  On the edge of my seat waiting to see what hits us first, a massive economic collapse when the hype runs out, or the Torment Nexus.
  - reverius42 9mo ago
    It really seems like the market has locked in on one of those two things being a guaranteed outcome at this point.
bigstrat2003 9mo ago
Big tech businesses are convinced that there must be some profitable business model for AI, and are undeterred by the fact that none has yet been found. They want to be the first to get there, raking in that sweet sweet money (even though there's no evidence yet that there is money to be made here). It's industry-wide FOMO, nothing more.

georgemcbay 9mo ago

> xAI needs money to win the AI race Off on a tangent here but I'd love for anyone to seriously explain how they believe the "AI race" is economically winnable in any meaningful way. Like what is the believed inflection point that changes us from the current situation (where all of the state-of-the-art models are roughly equal if you squint, and the open models are only like one release cycle behind) to one where someone achieves a clear advantage that won't be reproduced by everyone else in the "race" virtually immediately.

CamperBob2 9mo ago
They ultimately want to own everyone's business processes, is my guess. You can only jack up the subscription prices on coding models and chatbots by so much, as everyone has already noted... but if OpenAI runs your "smart" CRM and ERP flows, they can really tighten the screws.
- adventured 9mo ago
  If you have the greatest coding agent under your thumb, eventually you orient it toward eating everything else instead of letting everybody else use your agent to build software & make money. Go forward ten years, it's highly likely GPT, Gemini, maybe Claude - they'll have consumed a very large amount of the software ecosystem. Why should MS Office exist at all as a separate piece of software? The various pieces of Office will be trivial for the GPT (etc) of ten years out to fully recreate & maintain internally for OpenAI. There's no scenario where they don't do what the platforms always do: eat the ecosystem, anything they can. If a platform can consume a thing that touches it, it will. Office? Dead. Box? Dead. DropBox? Dead. And so on. They'll move on anything that touches users (from productivity software to storage). You're not going to pay $20-$30 for GPT and then pay for DropBox too, OpenAI will just do an Amazon Prime maneuver and stack more onto what you get to try to kill everyone else. Google of course has a huge lead on this move already with their various prominent apps.
  - notahacker 9mo ago
    Dropbox is actually a great example of why this isn't likely to happen. Deeper pocketed competition with tons of cloud storage and the ability to build easy upload workflows (including directly into software with massive install base) exists, and showed an active interest in competing with them. Still doing OK Office's moat is much bigger (and its competition already free). "New vibe coded features every week" isn't an obvious reason for Office users to switch away from the platform their financial models and all their clients rely on to a new upstart software suite

danw1979 9mo ago

I’m not certain spacex is generating much cash right now ? Starship development is consuming billions. F9 & Starlink are probably profitable ? I’d say this is more shifting of the future burden of xAI to one of his companies he knows will be a hit stonk when it goes public, where enthusiasm is unlikely to be dampened by another massive cash drain on the books.