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One theory is that Elon Musk ends up being able to build AI datacenters faster and more cost effectively than anyone else, which seems plausible given the succe

by qq66 3mo ago

One theory is that Elon Musk ends up being able to build AI datacenters faster and more cost effectively than anyone else, which seems plausible given the success of Tesla Gigafactories.

tpm 3mo ago
A few Chinese companies build both batteries and cars faster and more cost effectively than anyone else including Tesla though.
- zulux 3mo ago
  something is going on with those Chinese companies if the equivalent Toyota costs twice as much to produce. It could be close-to-free labor, subsidies, or a myriad other things... but it's something.
  - tpm 3mo ago
    Lower pay (but relatively more employees), integrated development and manufacture (they don't subcontract parts like many western and possibly japanese mfgs do), support by regional govs etc., they also don't pay licenses to licensing orgs and bit by bit all of this accumulates. Also huge competition leading to relentless cost cutting. Some links: https://x.com/maxiaoalex/status/2062910018840854722 https://x.com/maxiaoalex/status/2062910018840854722 But mostly this one: https://rhg.com/research/why-are-chinese-evs-so-cheap/ https://rhg.com/research/why-are-chinese-evs-so-cheap/
dgellow 3mo ago
That doesn’t justify the valuation in any way
roryirvine 3mo ago
Datacentres are close to being a commodity, though. There's some stuff you can do with Combined Cooling & Power or other cogeneration schemes, and potential for cost-cutting: removing fire protection, doing without redundant power, reducing security, that sort of thing. But that's all fairly marginal in the grand scheme of things. The more experimental stuff like running with extreme temperature gradients, extensive liquid cooling, or maybe using CO2 or He instead of air is certainly worth trying out, but unlikely to make much of a difference either. SpaceX are claiming that they're making a big profit on their deals with Anthropic and OpenAI but that seems to assume that the cost of the compute is zero. I'm not a forensic accountant, so maybe it's okay to have written the value of that down already, but it's not a trick they'll be able to pull off more than once. Really, the best thing you can say about them is that they've got a big pile of money so can finance capital expenditure cheaply. That gives them an edge of a few percentage points over the likes of Equinix (worth $14.2bn), but not much more than that.

by qq66 3mo ago

One theory is that Elon Musk ends up being able to build AI datacenters faster and more cost effectively than anyone else, which seems plausible given the success of Tesla Gigafactories.

tpm 3mo ago

A few Chinese companies build both batteries and cars faster and more cost effectively than anyone else including Tesla though.

zulux 3mo ago
something is going on with those Chinese companies if the equivalent Toyota costs twice as much to produce. It could be close-to-free labor, subsidies, or a myriad other things... but it's something.
- tpm 3mo ago
  Lower pay (but relatively more employees), integrated development and manufacture (they don't subcontract parts like many western and possibly japanese mfgs do), support by regional govs etc., they also don't pay licenses to licensing orgs and bit by bit all of this accumulates. Also huge competition leading to relentless cost cutting. Some links: https://x.com/maxiaoalex/status/2062910018840854722 https://x.com/maxiaoalex/status/2062910018840854722 But mostly this one: https://rhg.com/research/why-are-chinese-evs-so-cheap/ https://rhg.com/research/why-are-chinese-evs-so-cheap/

dgellow 3mo ago

That doesn’t justify the valuation in any way

roryirvine 3mo ago

Datacentres are close to being a commodity, though. There's some stuff you can do with Combined Cooling & Power or other cogeneration schemes, and potential for cost-cutting: removing fire protection, doing without redundant power, reducing security, that sort of thing. But that's all fairly marginal in the grand scheme of things. The more experimental stuff like running with extreme temperature gradients, extensive liquid cooling, or maybe using CO2 or He instead of air is certainly worth trying out, but unlikely to make much of a difference either. SpaceX are claiming that they're making a big profit on their deals with Anthropic and OpenAI but that seems to assume that the cost of the compute is zero. I'm not a forensic accountant, so maybe it's okay to have written the value of that down already, but it's not a trick they'll be able to pull off more than once. Really, the best thing you can say about them is that they've got a big pile of money so can finance capital expenditure cheaply. That gives them an edge of a few percentage points over the likes of Equinix (worth $14.2bn), but not much more than that.