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Discussion (60 Comments)Read Original on HackerNews
Meta are laying their own sub-sea cables globally at present:
https://www.bbc.co.uk/news/articles/ckgrgz8271go
Google Cloud recently told Meta they couldn't supply all the ai compute they want so Meta has no choice but to secure their supply?
https://memeburn.com/google-limits-metas-gemini-ai-access-as...
Google, Microsoft and others have separate cash cows. For Amazon, AWS is the cash cow. They can’t afford a blip here.
Oh yeah, this is gonna end well.
It just means demand is consolidating to winners. There's no denying openai and anthropic and maybe Google have a ton of demand. The fact that xai and meta do not does not mean no demand exists.
And the point is not that “no” demand exists but the likes of AWS are building to the moon citing massive future need but that simply doesn’t jive with all this unused capacity from others coming to the market.
And building out massive capacity to sell a product that’s likely to trend to a low margin market commodity isn’t a great business.
Firms are currently experimenting and figuring out the correct way to use these tools in the production function.
Facebook and Twitter are both now signaling that the resources they funded with vast amounts of capital would be worth more to shareholders if they were leased to the highest bidder.
This is either a realization that their internally developed product/service roadmap is not panning out, or that the lease demand is so high that they’d be fools not to take advantage.
Hope so. It also would put hardware prices down.
Though it's probably a bad sign generally that you can't capitalize on all the GPUs you've acquired.
The demand is likely short term till the renter can ramp up their own centres/find better deals.
How do you know this? Have they released any numbers?
SpaceX's numbers show xAI increasing its losses over time. In 2025, xAI lost $6.4 billion on $3.2 billion. In 2026, xAI posted a $2.47 billion operating loss in the first quarter alone.
Come back when you have actual numbers on dollars spent, interest rates and the time spent.
For another, this seems like a move that happens when the bubble pops.
The dotcom bubble went from having tons of business raising fortunes on the promise of business models the internet unlocks to having few internet businesses left at that scale and a bunch of unused fiber.
Now we're starting to see all the companies claiming AI products will make fortunes to them trying to sell unused hardware capacity.
Could also be a self-image thing. Facebook isn't exactly young and fashionable anymore, it's more akin to a weird mid-90s idea of a close walled Internet in some sense. Instagram users I'd guess is mostly younger women. None of these really align with Zuckerbergs macho persona.
Are we talkinga bout loosing 50% of the hardware as it fails? Or far less?
He could invest in paying back society but he cares more about continuing his ignorance.
Just imagine how his ego got stroked when he was agreeing with trump like a bootlicker but still sitting at a table at the Whitehouse.
Even with this clown this has to count for something in his books.
Zuck got spooked by apple ads change a few years ago, which crashed the meta's stock to double digit. So Zuck is trying to own a platform. They want to be a version of openai selling ads
Zuck sees a real problem: not owning the platform.
Hence the VR and other attempts. He sees what he has today as a dead end. The fear grips him.
In theory Google and Apple could ban Meta’s apps and it would be game over.
The real problem for Zuck is he thinks he’s some grand master who can play 5-d chess, except he can’t
The problem is that only works if aggregate demand is higher than supply. At some point, all these new data centres are going to come on line, and the frothy "throw AI at everything with no regard to costs" is going to drawn down across the industry. And this supply will be much larger - because everyone thought the down side was limited.
At that point you're going to have all of these companies trying to dump their excess capacity on the market and it suddenly won't be true that you can just sell capacity to your competitors.
Obviously this won't bankrupt Meta - it'll just eat into their profits from their ads business. But it likely will drive a bunch of neo-clouds out of business very quickly, and the technology providers like Nvidia etc will suddenly come back to reasonable P/Es.
Do you have proof that the deal is profitable (and for how long?) for SpaceX ?
In retrospect, this seems pretty easy for Meta to have done as heretofore they were a single captive customer AI shop.
Like they have much lower cost of capital than OpenAI or Anthropic for example and far more direct to consumer muscle, if they could've gotten their models into a better position it's very possible they could've beaten out OpenAI on consumer AI. Probably a smaller prize to win than B2B AI but still huge.
And then if the case where AI is panning out but they are failing to execute (where we appear to be now) they have the option of becoming a SpaceX style NeoCloud that is pretty solid, even though most of their moves were pretty bad along the way.