In the article, it states that the two deals will cover the entire cost of SpaceX's AI buildout in 18 months. OpenAI and Anthropic would kill for that kind of cashflow.
xAI is a failure of an AI company from a consumer perspective. They invested a large amount of money into owning their own infrastructure, while driving away consumers with their right-wing or "alt right"-ish branding and having a reputation of X users abusing the AI services.
Turns out there was another company with a much better reputation for which the compute is a better fit. Now that the data centers are being put to use, they actually make them a little bit of money instead of losing money.
That story roughly tracks the one I hold. One piece that's missing is that grok's / X's image also made it radioactive to the best researchers. 'Aligned AGI' is an easier sell to the best engineers than 'abusive neo-Nazi chatbot with a porn problem'.
If I remember correctly, reporting at the time just after DC was selected was suggesting that it was always going to be DC to be in close proximity to government and that the whole fiasco was a way to extract as many concessions as possible from the city in its efforts to "compete" for the new offices. What even is an "HQ" if the actual headquarters that disproportionately houses more office workers than anywhere else is still in Seattle?
Hell, after the 'competition' was announced, many commentators observed that it was pretty much written with Arlington, VA in mind, and the competition was less a serious competition and more a ploy to try to get a lot of subsidies for what their plans already were. It's also worth noting that the bids that were accepted (Arlington and New York) were some of the most miserly bids.
> - Significantly increased my productivity as a software engineer.
This is exactly the point that keeps coming up that folks are struggling to grasp, myself included. How are you measuring this? It certainly makes me feel productive, but I'm not sure I can confidently say it has actually made me more productive. It's made the easy stuff a no-brainer (e.g. boilerplate, simple logic) and the moderate stuff really hard. Never mind the hard stuff. Vetting the code has become a whole other job on its own. The only folks I've found who confidently claim it increases productivity appear to be online (and without evidence), because no one in person is willing to claim that and show it.
I've never been a developer. Dabbled in frontend web for a bit (HTML/CSS/JS, no large frameworks) and felt like if I really dedicated some time to learning how to code, I'd be pretty decent at it. It's always intrigued me, and I've always had an itch to build things, but just never found the time. I'm in marketing now - I own an agency.
Over the last 6 months since the coding models really began to step up and get good, I've built several dedicated apps to support my business:
-Profitability optimizer and forecaster based on unit economics and current ad efficiency.
-Creative strategy tool that ingests brand and product data and helps explore primary and secondary personas and emotional motivators.
-Reporting tool that processes natural language queries and connects to multiple data sources to fetch results. Can schedule reports to post directly to Slack or email.
All robust and hosted on Railway. Team members can use them. Clients can use them. OAuth via Google.
Would any of this have been possible for me before the rise of frontier LLMs? Absolutely not. Learning the frameworks alone would have taken me longer than it's taken to just... build. Rapidly build and deploy. Total game changer for me.
Oh - and I'm building a game on the side. LLMs know Godot.
I can agree with the skeptics that LLM generated code is usually crap. I rarely accept its output without significant edits unless it's truly boilerplate, and I want to avoid the need for that kind of code in the first place.
For me, the killer use case is debugging. I hate wasting time debugging something that should work except for mistakes, and now I do that probably 75% less than I used to because AI does it for me.
I don't know if it makes me that much more productive, but I certainly enjoy my work more not having to do as much tedious debugging, and it feels like I waste a lot less time doing it.
I have about a dozen programs that are now close to ten years old, all running quietly in the background on my computer doing various tasks. I originally wrote all of them as JavaScript/Node programs. That was fine at the time, but the memory usage really adds up, since each one needs its own V8 runtime (anywhere from 50 to 100 MB per process).
I have basically zero familiarity with Golang, but I was able to use an agentic harness to run in the background and convert every single one of those scripts into Go equivalents. Because I've accumulated lots of before-and-after data, it was easy to confirm that the new versions matched the behavior and accuracy of the originals.
End Result: memory usage dropped from tens of megabytes per program to just a couple of megabytes each.
I've been able to build things that I otherwise would not have been able to build, in the free time that I have:
- a VST audio plugin
- a wedding website with RSVP functionality
- a relaxing game for my wife
At work, I've been able to build much more than I would have been capable of in the past. I'm a backend eng, and it allows me to build much much nicer frontends than I've ever been able to do in the past.
And before you tell me that the code is crap - it doesn't matter! It may or may not be good code, but it works and serves it's purpose very well. Anyways, I'm I'm not launching a rocket, or putting software into cars.
I linked to an example in the comment. In that particular case, I'd say probably 10-20x faster. I do embedded, backend, web and mobile app development.
I also notice these things. Otoh i spend definitely less than 50% of my time typing in code so it is impossible that it gives more than 2x speedup. And sometimes i lose time babysitting and rewriting stuff so all in all it is kinda no productivity gain.
> It's made the easy stuff a no-brainer (e.g. boilerplate, simple logic) and the moderate stuff really hard. Never mind the hard stuff. Vetting the code has become a whole other job on its own.
Not everyone has the same requirements, skills, usage patterns, and outcomes. It's that simple.
Granted, I only skimmed some high-line numbers, but isn't their only profitable project Starlink? SpaceX is functionally a satellite internet company that happens to make rockets.
I buy 50 billion of hardware. Make 45 billion back in year 1. My losses are 5 billion. I Pay of all my creditors by year two. Then spend another 55 billion on hardware in the second half of year two. My profit is at this point zero.
In year three your competitors invest in making a better model and crush your business because you have no moat at all.
The entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get.
The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
It's not basic math when the numbers are this big. There's not going to be $50 billion coming in Year 3 if there's a market correction and lenders scale back financing. Borrowed money is how companies are paying for AI, and that's the first thing that disappears in a recession.
You're not wrong, but also how "ready" is "ready enough"? What about things the US doesn't generally have access to? Rare earth minerals? Helium? Cobalt? Coffee?
It also costs money to build the infra for storage and more money to maintain. There's always a trade-off. I think governments have done an acceptable job of being ready, but they are predicated on the assumption that the global order that the developed world has largely enjoyed for several decades remains largely intact.
It's a bad assumption in hindsight because some folks chose to go over a cliff over fixing deep-seated problems. You can't really control for chaos.
Moving to green and nuclear energy, pressing hard to upgrade the national grid would be the obvious things to reduce our short-term dependence on fossil fuels.
Energy independence is not a pipe dream, and it isn't ever going to be 100%. We should be working toward it.
We may be somewhat dependent on China or other sources for solar panels, for example, but once we have the product, it has a multi-decade lifetime compared to an instantly-consumed fuel.
Even if you're a fossil fuel fanatic, one should be advocating for more of our refineries to be tooled for processing our own crude oil. But that isn't as profitable in the short term, so we don't do it.
P.S. politically, we've seen our system does not have the capacity to deal with a malicious executive taking total control of the government. We need a complete rebuild of our legislative and executive branches.
As a Russian emigrant, I feel this whole war is a severe case of déjà vu. It's as if the US government is going through a stolen Russian playbook, appropriating everything.
"Special operation"? Check. "$EnemyCapital in 3 days"? Check. "We haven't even started yet"? Check. "Goodwill gestures"? Check.
(It's actually a common joke on the Russian Internet. So common, in fact, that it has already stopped being funny.)
All the time? This morning when I dreaded getting up so early for work. Last night when I showered. The day before after playing some board games with friends. Normal people do introspect, despite the current fad among a few oddball elites in Silicon Valley [0].
Wait, where is there a 'beta' tag to something that they are charging real money for? Why is this software any different than any other software and we should completely give away our rights as a consumer to ensure what we pay for is delivered?
I think the parent is saying that one should be aware that the whole LLM industry is still in an experimental stage and far from mature. What you want isn’t what’s being offered. I agree that there should be higher standards, but what we currently have is an arms race. The consequence is to factor that into the value proposition and maybe not rely too much on it.
SLAs should be standard for any paid service, especially on the enterprise side, but also on the consumer side. Being immature as a company does not excuse a lack of service delivery.
Not every customer, even a paying customer, demands reliability at a particular level. Market segmentation tends to address those situations: pay more, get more.
Users on $200 plan complaining, already at max level of subscription, I don't think a $200 subscription should make you feel like you are getting unfair advantage. Like restricting claude -p to API ... after I paid so much? Moderate use should not do that. I am not running it batch mode on a million inputs.
They can be held to account when they fail to deliver what they promise! But what is promised for delivery is what's in the Terms of Service (i.e. the agreement). Nothing more. If it's not in there, you can't hold them to account for it.
> It's too easy for companies to fail to provide their service as long as they never promise to provide their service.
I don't even know what this means. You can't make anyone work for free, nor dictate the terms of what kind of work someone will do without their consent. I assume you are not pro-slavery.
You didn't merely call out their failure. You said it was "too easy," implying something more, like they owe you something. It's a pretty entitled point of view.
"[W]ant[ing] companies to put some effort into avoiding ... failures" is not the same as "hold[ing] them to account". The former is "this sucks and I don't like it." The latter is "punish them or force them to do what I want!"--i.e., some sort of legal remedy.
What right as a consumer do you have that is pertinent here, other than to have the vendor adhere to the terms of the agreement you have with them?
Anthropic has many customers despite the fact that they have occasional problems. They’re not suing Anthropic because Anthropic isn’t promising in its agreement something they can’t deliver.
I think you’re reading into the agreement something that isn’t there, and that’s the cause of your confusion.
I am not reading into an agreement, I am saying there is no agreement to be found to ensure service delivery and the associated liability that would come for any SLA. Also, where is the Anthorpic SLA for Enterprise?
Does it exist?
Just because people pay for things doesn't mean they know or understand what they are paying for. Nor is there the legal precedence to actually understand where the rub lies or how that impacts business.
> Just because people pay for things doesn't mean they know or understand what they are paying for.
I believe, respectfully, that’s precisely what is happening in this thread because you keep complaining about the absence of an SLA that was never in the agreement, as though it is—or is supposed to be—there, and therefore the existence of some “rights” that would flow from that.
I'm pretty sure this is an attempt by both companies to shape a reasonable finance story for their eventual IPO. They need to make this look a lot better than a pump and dump (raising on wild valuations then offloading onto public investors).
What's your evidence for this? Because from the S-1, SpaceX is largely an internet service provider that happens to launch rockets and own xAI.
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