etempleton

The calculus that McDonalds continues to miss is people have a lot of choices when it comes to fast food. They have a lot of built up brand equity and nostalgia, but they seem pretty dead set on killing that.

I don't eat at McDonalds. My friends don't eat at McDonalds. The McDonalds is so bad where we live kids don't like McDonalds because the food is bad even as far as fast food standards go.

I agree. These investors are already completely exposed. Their only way out of the hole is to dig themselves deeper and wait for 60 days or whatever after IPO to recoup their investment.

It is also why they are valuing themselves so high. They need it to be that high. To return value to shareholders.

To keep raising money at this point, after all the money already raised and ahead of a seemingly imminent IPO should tell everyone everything they need to know about the state of their finances. I can’t wait to read OpenAI and Anthropic’s S1s.

1.1 million? You are basically telling them that they made the right choice to break the law.

I think the Duo is a really interesting product that I am not sure I would ever get, but the form factor is interesting. I don’t know if I would want it for out and about, but it is kind of the ultimate phone for around the house, which is a ridiculous thing to say, but it kind of bridges the gap to the iPad but is more handheld, which is nice.

I remember feeling at the time that the Colbert Report’s satire was too on the nose for my tastes.

I think people constantly underestimate how destructive he is. They think Trump can be a pawn for their interests, but he is irrational, volatile, and stupid. The democrats and the Biden administration paved the way for Trump 2 by not having a primary.

Simple. No one trusts the current administration and no one should. The long term damage being done is astronomical. They are a magical combination of malicious and incompetent. The only thing that could make it worse is if they were more competent at being malicious.

My understanding is they are essentially traditional management consultants with fancy data analytic dashboards instead of PowerPoint decks and charge an even more obscene premium for the privilege.

It is a risky strategy but if people believe they are creepy they believe they are powerful.

I am just curious, and I genuinely want to know, how is a 150 million a year in revenue company worth 13 billion dollars?

Maybe in a year or so or maybe never. It depends on how 14a turns out and if it is comparable to TSMC 2NM. They may also choose to utilize 18a-p / 14a for other chips and not the M-series.

OpenAI is also now actively discounting their model. They just offered a free month to users. Both companies seem spooked by what I have to imagine is slowing user growth.

Components that are one of one. It would be bad for both countries and ASML. China is the biggest threat to ASML business, so there is incentive alignment.

ASML uses critical components made in the US that the US can put export controls more directly so they can effectively control who ASML sells to.

I think this would be a bad move because it would force China to move more quickly and further utilize their own technology.

It is hard to justify using inferior domestic technology when perfectly good, proven ASML tech is available.

I think you would be surprised, but yes, there will be a lot of battery tech on the field.

I once thought that this would be true, but wars are fought with oil burning machinery. And so countries with oil will always be able to play bully. A country with strong access to oil also has the most important resource in war. Batteries are simply less dense energy storage.

This isn’t the first time Zuckerberg has espoused the benefit of openness and transparency and how that would create a better society. I get this is a bit different, but the language and sentiment are close enough. Facebook and Instagram are now so closed you cannot view a business page without an account. I think it sold fair to recognize open today does not mean open tomorrow. They want to acquire users and build a platform and that means doing something different than the competition.

Until they are public and they release full financials using standard accounting practices, I would take what they say with a grain of salt.

SpaceX also painted a pretty rosey picture of their financials, but when they filed for IPO it became clear they were doing some real cherry picking and in actuality they were losing a ton of money.

If they really were doing so well they would file publicly and be rushing to IPO.

I guarantee they are losing billions per quarter. You can say they make money on inference, but that is irrelevant. That doesn't include all of their overhead and indirect costs let alone model training.

You have to assume that they aren’t being too creative with their accounting, which Anthropic and Open AI most certainly are.

Why do they both need to keep borrowing so much money if the margins are so fat?

Most people won’t go beyond free. A lot of people will spend $20 and some will go above $50.

Nvidia is basically the house loaning money to the gamblers. They don’t care if the gamblers win or lose. They just care that people keep playing.

Timing is always next to impossible to predict. Open AI has managed to continue to find investors and as long as they continue to do that they will be around no matter how much money they lose.

Microsoft and others report their stake in Open AI as net income. Open AI and others revenue comes in large part from large customers like Microsoft. Nvidia makes large investments into Open AI, SpaceX, and core weave and in return they buy Nvidia hardware. It is all very circular. And at the same time it appears these companies have near zero moat. I think it is foolish to not question how big this business really is. Seemingly no one knows.

Surely AI is a thing that is here to stay, but I am not at all convinced that the big frontier models are going to be able to return their investment and if it becomes apparent they cannot, then you are almost certainly going to see a massive correction.

Let's do some math with two pretty well understood variables. The cost of a SpaceX rocket launch and the cost to build a terrestrial 100 MW data center.

An average rocket launch for SpaceX costs 74 million. A business they break even on. Let's assume they get a bit more efficient and they get that down to 70 million per launch. According to Elon Musk's own estimate, the space data center will be 150 KW, roughly one Nvidia AI rack. It probably has to be under volted a bit and run at 120 - 140 kw, but, whatever, roughly equivalent.

A 100 MW data center costs up to 5 billion and to power it costs roughly 150 million a year, so let's just say 1 billion more for five years of power, so 6 billion dollars for the first 5 years of the data center's operation. Why just 5 years? Because that is how long a Starlink low-earth orbit satellite stays up before it is scuttled and burns up in Earth's atmosphere, so after 5 years you can write that thing off.

Anyway, the benchmark is set. 100 MW data center at 6 billion dollars. But hey, there are roadblocks here on earth; land isn't cheap and costs keep going up, so let's worst case scenario this and say the cost of a terrestrial data center doubles to 10 billion dollars and power costs quadruple. So that's a worst case scenario baseline cost of an astonishing 14 billion dollars for a terrestrial 100 MW data center with power for five years.

70 million per rocket launch seems like pennies compared to 14 billion dollars and power is free in space! But wait, you would of course need 666 of these 150 KW mini data centers to be equivalent to one 100 MW data center. So, 666 SpaceX rocket launches, at 70 million dollars per, equals 46+ billion dollars. And that is before you factor in any other, you know, data center costs.

So no, there is no life time where it is cheaper to have data centers in space, but it may be a thing Elon does just to keep the stock price high.

I think he is early, but there is no doubt there is a bubble. It is just a question of what will pop it? One of the big heavily capitalized frontier models throwing in the towel might do it. If Open AI, for examples, starts to fall behind and has trouble with their ipo or their ipo tanks I think that could trigger a crash because a lot of private capital would be exposed if that happens.

From another rationalist perspective, it will always be cheaper to run a data center somewhere on earth under any conceivable scenario. It would be easier and cheaper to put a data center in the ocean. Just a few of the significant issues:

1. Selling an old compute unit is a significant cost savings when they are replaced every five years. In space you basically have to write them off.

2. Cooling in space is limited. Not impossible but limited. And these things throw off massive amounts of heat. You are talking about huge heat sinks which take valuable space and add massive weight that limits space on the rocket.

3. The size per data center will be relatively minuscule OR they somehow have to assemble in space adding additional complexity.

4. Any launch, deployment, connectivity, or hardware failure is a total loss. So you have to account for that.

Ahhh, my mistake. macOS 15 not to be confused with macOS 10.15