Fuck this

I don't see the distinction you're drawing about "commodity", but I'm happy to be wrong on that. My point was that spaceX's ai division is buying all their inputs from external vendors and can't meaningfully differentiate themselves from person Y who buys all the same hardware except for the fact they bought them first. Which...

> Correct. But charging people now generates incumbency advantages

I don't see now this is an "incumbency advantage". There's nothing that sticks their clients to stay there and sign up for the next data center.

EDIT: said 50 engineers at $50m/yr originally and meant 50 @ $1m/yr

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.

Data centers (before recently) are low margin businesses because all the inputs are commodities: you buy power (joules), power (PDU), cooling hardware, physical racks, etc.. from the same vendors as everyone else. Worse, your biggest potential clients have the scale to just build it on their own and cut you out because of their scale and because you don't bring anything unique (outside of maybe physical proximity to an interesting market)

xAI has all the same commodity inputs plus another huge upfront capital expense (GPU/storage/networking), and their customer base is exclusively the well-funded companies who would normally just build it on their own.

I assume that they can't get better deals from nvidia than (e.g.) Microsoft because of their scale, so the unit cost of their inputs is the same or worse than their clients.

So the whole game is hoping that they hope to charge more now because people can't build fast enough and try to recoup their upfront costs before either a) other capacity comes online and b) the installed hardware becomes obsolete.

I'm being earnest -- it seems like they're trading one tiny margin service (datacenter) for another tiny margin service, with the added difficulty that there's an additional 10 figures of upfront expenditures and their viability depends solely on paying everything off before the price floor drops. Maybe it's staunching the bleeding, but it seems like not a great move

I have a hand-wavy hard sci-fi universe I've been rolling around my head for years and I eventually came to the conclusion that fission-fusion drives would be really handy for spacecraft, since it would be much easier to start a fission reaction in a cold/dark ship than fusion because of the power requirements. Otherwise you need some other way to generate 10s or 100s of MW to start the fusion reaction.

It's like I was a graphic designer and my finance company said "photoshop is too expensive". I wouldn't be mad at Adobe for it

At least people in the past had the integrity to acknowledge their positions head-on. One of the lamentable things missing today