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I have a theory that xAI has one of the largest clusters but with far less traffic + tokens to process bc its less popular than its competition, and xAI can pas
by game_the0ry 2mo ago
I have a theory that xAI has one of the largest clusters but with far less traffic + tokens to process bc its less popular than its competition, and xAI can pass the savings on to the end user.
- inferniac 2mo agothey are renting parts to google for like 1b a month really dont think they have a lot of idle power
- bch 2mo agoIf they've got billions to rent out, they're not using it...
- prng2021 2mo agoxAI had $2.5B in operating losses in the past quarter. What savings are being passed on?
- ChrisGreenHeur 2mo agoThey make up for the losses through lower profits
- goos 2mo agoWhy would having more costs and less income allow them to pass savings on to the end user?
- rjh29 2mo agoThey already invested in the massive datacentres of GPUs sitting idle. They have fewer users so they can deliver more inference per user - more thinking, larger models.
- mvdtnz 2mo agoSo where are these mythical savings coming from? You're saying they have spent more per user therefore can charge each user less or something? I'm not following.
- spacebanana7 2mo agoThe (optimistic?) take is that xAI is genuinely better at building datacenters at scale than anyone else, and the freedom to use Nat Gas as the primary energy source allows them to have lower marginal costs. The (pessimistic?) take is that they have loads of idle GPUs and want to get some revenue out of them rather than none. Compare this to OpenAI/Anthropic where every token used by a consumer has to compete with enterprise spenders, and there’s not enough to go around for everyone.
- rjh29 2mo agoIt's also sensible for them to provide a cheap, intelligent model to users if they have capacity, then once they built a user base, tighten the screws. All the other AI providers have done that.
- collinmcnulty 2mo agoIt’s basically a clearance sale, is the theory.
- loeg 2mo agoDon't they just rent them out to the frontier AI shops? They're not sitting idle.
- stavros 2mo agoThey do, yes.
- londons_explore 2mo agoThere are various difficulties with renting GPUs, especially if your setup is very custom. The competitor would have to port their training systems to your specific network architecture, system design, rdma Vs ethernet vs infiniband Vs nvlink etc. Getting it running might not be too hard, but getting it running efficiently and making good use of all those flops will require considerable human effort and wall time. Add that to the fact most frontier labs seem to have a single huge training run - and to my knowledge nobody has figured out how to distribute that training run between data centers effectively.
- re-thc 2mo agoMore like they have a less focus on margins and more on cost recovery.
- gabriel-uribe 2mo agoDefinitely. They had insanely low rates on TTS up until a month or two ago ($4.20/1M) for example, which they only recently started increasing. As their models get more competitive I'm sure prices will catch up.
- parsimo2010 2mo ago“We lose money on every rack, but we make up for it in volume!” - Elon Musk, probably
- WarmWash 2mo agoSpaceX, like Tesla, seems to have the same "portrayals over profits" mindset investors. So it doesn't even really matter whether or not xAI is making any money.
- sidibe 2mo agoProfitability is never a constraint for Elon companies. He has always been able to be able to extract money from the middle east, government, banks, retail investors (or these same parties through his other companies) whenever they need more. His net worth is orders of magnitude bigger than the cumulative profits his companies have ever produced (even if you only count the profitable quarters)
- declan_roberts 2mo agoIt's really easy to do this actually. You just create cars that drive themselves and rockets that land themselves and people start throwing money at you.
- jeremyjh 2mo agoWhen can I get a Tesla that drives itself? About six months?
- trollbridge 2mo agoFrom your local Tesla dealer. Technically, you do still have to "supervise" it, which basically means making sure the little camera that watches your eyes doesn't catch you with your eyes off the road too much. My sister-in-law's mother drove one from Florida to the northeast without touching the steering wheel or pedal/brake, right down to the parking at each end. I've been a humongous fsd sceptic for a while, but had to lay that aside after I went for a test drive (test ride?) in one of these things.
- jceykvdth 2mo ago[dead]
- deleted 2mo ago[deleted]
- jeremyjh 2mo agoWhat that technicality means is that you are liable when the car kills someone, not Tesla. Level 3 self-driving is a completely broken idea. People cannot closely supervise a process that never requires their input - when you suddenly are needed you will not be prepared to respond quickly enough. Either you are driving the car, or you aren't. If you are liable, you are driving it.
- TiredOfLife 2mo agoNo need for theorizing. xai is selling their excess capacity to Anthropic and Google with large markup